Tesla not immune to economic troubles – Musk

Elon Musk, the CEO of Tesla, has cautioned that the electric vehicle manufacturer is not immune to the challenges of the global economic environment, which he believes will remain difficult for the next year. Speaking at the company’s annual shareholder meeting in Austin, Texas, Musk addressed topics such as car demand, profitability in a sluggish economy, and plans for a third-party audit of cobalt mines supplying Tesla’s battery production.

In a notable shift for Tesla, the market leader in electric cars, Musk announced the company’s intention to advertise its vehicles, a departure from its previous marketing strategy. Despite Tesla’s position in the industry, Musk acknowledged that the company will face challenges in the current macroeconomic climate over the next 12 months.

During the meeting, shareholders approved the appointment of JB Straubel, Tesla’s co-founder and former chief technology officer, to the board. Proxy advisory firm Glass Lewis had expressed concerns about Straubel’s independence and recommended voting against his appointment. Additionally, a proposal to publish a report establishing succession plans for Musk was rejected by shareholders.

Musk has faced pressure to address investor concerns about the lack of a clear successor, weakening demand, delays in new models, and his involvement in Twitter. Musk stated that Twitter had been a “short-term distraction” and announced the appointment of a new CEO for the platform. He emphasized that his focus will be on products and technology at Twitter.

Tesla’s recent strategy has prioritised sales growth over profitability, following missed margin targets due to aggressive price cuts. Musk’s email to staff reinforced a cautious approach to hiring, stating that no new hires can be made without his personal approval.

Despite some investor concerns, Tesla shareholders largely supported the board’s recommendations during the meeting. Tesla’s stock closed flat but experienced a 0.6 percent increase in after-hours trading. The stock has declined approximately 60 percent from its peak in November 2021 due to concerns about softening electric car demand and Musk’s involvement in Twitter.