May 16 (Reuters) – Tesla Inc (TSLA.O) chief executive Elon Musk warned on Tuesday that the electric vehicle maker is not immune to the global economy, which he says will be difficult over the next 12 months.
At the company’s annual shareholder meeting in Austin, Texas, Musk spoke about auto demand making more money than its peers in a down economy, and also said he will conduct a third-party audit at cobalt mines that Tesla is providing with a key ingredient for manufacturing supply batteries.
Given the difficult times even for Tesla, the leader in electric cars, Musk said the company will try to advertise its vehicles, which it hasn’t done so far.
“Tesla is not immune to the global economic environment. I expect it will be tough on a macro level at least for the next 12 months,” said the billionaire, dressed casually in a black T-shirt and pants.
At the meeting, shareholders voted to appoint the company’s co-founder and former chief technology officer, JB Straubel, to the board. Proxy advisory firm Glass Lewis had urged investors to vote against Straubel’s appointment, citing concerns about his independence.
They also rejected a proposal to release a report aimed at determining succession plans for CEO Elon Musk.
Musk has been under pressure to allay investor concerns about the lack of a clear successor, slowing demand and delays for some new models, and his exposure to social media platform Twitter, which he bought in October.
“There was a short-term distraction because I had to undergo major open-heart surgery on Twitter to ensure the company’s survival,” Musk said Tuesday. Last week, he announced that former NBCUniversal advertising director Linda Yaccarino would succeed him as CEO of Twitter and that he would focus on products and technology at the company.
In April, Musk said Tesla would prioritize sales growth over profit after the company missed its margin target due to aggressive price cuts.
Musk emailed workers Monday that the company is not allowed to take on new hires unless he personally approves them, including contractors, and urged executives to “think carefully” before submitting hiring requests.
Tesla shareholders quickly approved the board’s recommendations on almost all of the proposals on Tuesday. The meeting was attended by shareholders who had won invitations by lottery and the meeting was also broadcast live.
Tesla shares closed unchanged at $166.52 on Tuesday, up 0.6% in after-hours trading. The stock has fallen about 60% since its record high in November 2021, weighed down by Musk’s distraction from Twitter and worries about slowing demand for electric cars.
NOMINATE FOR BOARD OF DIRECTORS
Straubel, CEO of Redwood Materials, a battery recycling and materials company, is considered Musk’s potential successor, according to Gene Munster, managing partner at Deepwater Asset Management.
Shareholders also voted to re-elect Musk and Chairwoman Robyn Denholm to the board.
Voting rights advisory firm ISS has recommended a vote against Denholm, citing concerns about a lack of control over Musk and his brother Kimbal’s use of Tesla stock as collateral for loans.
SUCCESSION
Investors voted against the release of a report on key person risk. The proposal aimed to identify key individuals and establish succession plans.
Musk said at last year’s shareholder meeting that he would stay with the automaker for as long as he was useful. In November, Tesla CEO James Murdoch testified in court that Musk had identified someone as a potential successor.
Tesla board members have discussed CFO Zach Kirkhorn as a possible successor as CEO, the Wall Street Journal reported last week, citing a person familiar with the matter.
Reporting by Tanya Jain
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Akash Sriram
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