The annual shareholders meeting, eagerly watched by Tesla (fans and investors), was held Thursday afternoon, Aug. 4, at Tesla's superfactory in Austin, Texas.
TOPCARS has learned that at the company's annual meeting on Thursday, shareholders voted on the board's recommendations on most issues, re-elected directors, approved a stock split and rejected a number of proposals focused on the environment and governance. Tesla CEO Elon Musk spoke about his plans for production expansion and self-driving, among other things.
Stock split approved as top priority at shareholder meeting
Tesla's shareholder meeting approved a 1-for-3 stock split deal, with shareholders voting to approve the proposed 1-for-3 stock split.
In June, Tesla's annual proxy statement filed with the U.S. Securities and Exchange Commission (SEC) revealed that the company plans to conduct a 3-for-1 stock split, turning 1 share into 3 shares and tripling the number of shares (4 billion) to 6 billion. Tesla said the stock split plan would provide greater flexibility for employees to manage their equity and would also make the stock more accessible to retail investors.
"Everyday investors can more easily afford to buy a piece of the company when the stock is trading in what's called the comfort zone," said Lindsey Bell, chief currency and market strategist at Ally. "The stock split drives (people) to have more interest in the company's stock, and more more interest means more people trading the stock."
TOPCARS notes that this stock split is Tesla's second, back in 2020, when Tesla did a 1:5 ratio stock split. At that time, Tesla's share price was about $1,300 per share, but the announcement of the 1-for-5 stock split pushed its share price to an all-time high of $2,000 per share, soaring 60 percent from the date of the announcement to the execution date.
Despite falling about 20 percent this year, Tesla's stock has soared more than 200 percent since its last stock split in August 2020.
The key background factor for Tesla's stock split was the company's mixed second-quarter earnings reported last month, according to a report on Forbes.com. Tesla's quarterly revenue was $16.9 billion, down from $18.7 billion in the previous quarter, which also ended the company's record profit.
New plants "on the horizon" as capacity ramp-up continues
Elon Musk spoke after the official portion of the meeting, outlining his expansion plans. Elon Musk said that Tesla currently has four superfactories located in California, Texas, Shanghai, China and Berlin, Germany. "We may be able to announce another factory location later this year," Elon Musk said.
Elon Musk said the Model S/Model X plant in California will produce 100,000 units per year and the Model 3/Model Y will produce 550,000 units per year; the Model 3/Model Y in the Shanghai superfactory will produce more than 750,000 units per year; the Model Y in the Berlin plant will produce more than 250,000 units per year; the Texas The Austin plant will produce more than 250,000 Model Ys per year.
After a "full upgrade" of the plant, it may be able to produce 2.1 million cars per year, and eventually production could expand to about 2.4 million units. Wall Street expects Tesla to deliver about 2.1 million cars in 2023. The company hopes to increase production at an average rate of 50 percent per year for the foreseeable future.
"Inflation has peaked" and Tesla may start cutting prices
On the price front, Elon Musk said, "Commodity prices are falling, and my guess is that the peak of inflation has now been survived." Barron's reports that this could signal that Tesla's prices are peaking or even starting to drop.
Elon Musk also talked about the current economic situation, saying the U.S. could suffer a "mild recession" and "I think the U.S. will suffer a 'mild recession' for up to 18 months."
But in disappointing news for investors and car buyers on the price front, Elon Musk noted that the original price proposed for Tesla's electric pickup truck, the Cybertruck, will not be sustainable. The product is first released in 2019, and since then, raw material costs have risen fast.
"Vows to launch fully autonomous driving this year
Elon Musk also mocked himself at the shareholder meeting for missing the timeline for real self-driving cars and "vowed" to launch a non-test version of its fully automated driving software (FSD) in 2022: "I vow that Tesla will launch a non-test version of its fully automated driving software in 2022. FSD Beta's performance in 'complex left steering' is impressive."
That means the driver won't have to pay attention to the driving in certain situations and the car will do all the work safely. Elon Musk says reaching this level of self-driving is harder than he expected. But he remains very optimistic about the potential of self-driving cars.
"Solving the full automation problem will magnify the free cash flow (problem)," Elon Musk added.
Elon Musk: 'Tricked' into signing Twitter buyout deal
It is also worth noting that Wedbush Securities analyst Daniel Ives said before the meeting began that no one doubts the historic achievements of Tesla and Musk, but investors are concerned about Tesla's production problems in the face of increased competition in the electric car market, as well as Elon Musk's failed bid for Twitter.
Elon Musk's speech at Tesla's annual shareholder meeting came on the same day that documents related to his takeover case with Twitter were made public on Thursday, with the documents focusing on the countersuit Elon Musk launched against Twitter in a U.S. court in Delaware last Friday. The documents show that Elon Musk claimed he signed the deal to buy Twitter because he was duped, a claim that Twitter refuted.
The documents show that according to Elon Musk, he was duped by Twitter and signed a $44 billion takeover deal on the advice of Wall Street bankers and lawyers. And Twitter refuted, "The story sounds implausible and contrary to the facts."
Delaware Chancellor Kathaleen McCormick has scheduled the trial of the lawsuit for Oct. 17. The showdown in court will last five days and conclude on Oct. 21.