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The biggest news from Elon Musk’s Tesla shareholder meeting

Horses were a somewhat unexpected theme at Tesla’s annual shareholder meeting. After CEO Elon Musk suggested that owning a gas car would be the equivalent of using a horse to get around, a Tesla shareholder asked Musk if the company’s announced pickup would have enough go power to haul her horse. “I didn’t mean to insult horses earlier,” Musk replied. “I love horses.” (Yes, the planned pickup could haul her horse.)

The shareholder meeting had some ups and downs — from a member of animal rights group PETA asking about vegan steering wheels to a discussion about Model 3 demand. The meeting comes at a time when Tesla’s stock price is at two-year low after falling almost continuously throughout 2019. The company suffered one of its worst quarterly losses ever to start the year, has faced new scrutiny about the safety of its Autopilot driver assistance feature, and endured questions about recent battery fires.

Musk spent nearly an hour and a half updating shareholders on the company, and taking questions as well. Here are some of the highlights (besides, obviously, the horse chat):

Demand

“I want to be clear: there is not a demand problem,” Musk said at the top of his presentation Tuesday. “Absolutely not.”

Wall Street analysts and industry experts have questioned the demand for Tesla’s cars in 2019. This is largely because Tesla’s cars are still fairly expensive. They’re no longer eligible for the federal EV tax credit, and the cheapest $35,000-version of the car basically never materialized, meaning every one of Tesla’s vehicles are sold above the average transaction price in the US.

Even Musk said in January that “the inhibitor” to buying a Tesla is “affordability” because “people literally don’t have the money to buy the car.”

But Musk argued at the meeting that there is no demand problem, and that Tesla is still finding new customers. He said 90 percent of orders coming in are from customers who aren’t holding a reservation for the Model 3, without giving specifics.

“Sales have far exceeded production, and production has been pretty good,” Musk said. “So, we’re actually doing well, and we have a decent shot at a record quarter on every level,” he added, echoing a point he made in a recently-leaked all-staff email. “If not, it’s going to be very close.”

Tesla started shipping Model 3s to China and Europe at the beginning of the year. Both markets represent huge opportunities for the company, but issues with each rollout had some analysts worried. Tesla has also cut back production of the Model S and Model X, though it did just announce upgraded versions of those cars that might be more attractive to buyers.

Maxwell Technologies acquisition

Tesla recently completed a months-long process of buying up battery tech company Maxwell Technologies. There’s been a ton of speculation as to what, exactly, Tesla believes Maxwell has to offer, but the company had been tight-lipped while the deal was still closing.

In response to a question at Tuesday’s shareholder meeting, though, Musk finally gave the beginnings of an answer, calling the acquisition “quite strategic.” He’s saving full details for when Tesla holds a “battery and powertrain investor day” (a follow-on event to the recent “autonomy investor day”), but Musk said Maxwell had developed some “very important technologies” that he believes will make it cheaper and easier to quickly scale up production of lithium-ion battery cell production.

That could be a huge boon for Tesla, as Musk also said at the meeting that the biggest thing standing in the way of the company’s growth is battery production.

Tesla pickup truck

Musk has expressed his love for the forthcoming Tesla pickup truck again and again, and so it’s no surprise he repeated that sentiment at the shareholder meeting. “I think it’s the coolest car I’ve ever seen, to be frank,” he said. Musk echoed previous claims about how the truck will look “cyberpunk” and like it’s come from a “sci-fi movie.”

Tesla didn’t reveal any images of the truck Tuesday, save for a very indistinguishable teaser. But the pickup truck will be revealed sometime later this summer, “hopefully,” Musk said, which clarified previous comments about Tesla’s plan to unveil the vehicle. Musk reiterated that the Tesla pickup will be more functional than a Ford F-150 but also a better sports car than a basic Porsche 911. (He’s also said he wants it to start at less than $50,000.) Also, it’s tough enough to haul a horse.

“We’re trying to create something new and it’s, it’s not just basically a copy of the form factor of everything else,” he said. “But you still want it to be great. It’s very hard. This is a very hard thing.”

Tesla… mining company?

The pickup truck, as well as the other products in Tesla’s pipeline, like the second-generation Roadster and the Tesla Semi, aren’t going to come to fruition unless Tesla can find a way to build more batteries, Musk said. Part of the plan to make that happen is to keep opening Gigafactories around the world. But even that will only go so far to help meet the company’s hunger for batteries, and so Musk said he’s considering moving Tesla further into the lithium-ion battery supply chain.

“We might get into the mining business, I don’t know, maybe a little bit at least,” he said. “We’ll do whatever we have to to ensure that we can scale at the fastest rate possible.”

Tesla’s whole thing is vertical integration — the Gigafactory in Nevada is designed to ultimately be able to take raw materials in one end and and roll cars out the other, though it’s still a ways away from that goal. Getting into mining could certainly help complete that vision, while also securing materials in what is turning out to be a pretty volatile market as more electric vehicles get built every year.

Tesla insurance

Musk announced on a conference call in April that Tesla is going to start offering insurance to its customers, and said it “will be more compelling than anything else” on the market, since the company has more direct access to its cars’ (and therefore its drivers’) data. But in response to a question about what is holding up the offering, Musk said Tesla has “a small acquisition that we need to complete, and bit of software to write.”

He didn’t specify what company Tesla might be buying, but reassured shareholders that “it won’t be long before” Tesla starts offering insurance.

Solar roof

Tesla unveiled its solar roof tiles all the way back in 2016, right around the time that the company was buying Solar City. They still aren’t much of a commercial product. They’re being deployed in eight states, Musk said Tuesday, but he added that making them is “quite a hard problem.”

Tesla is working on a third iteration of the tiles, which Musk said he’s “really excited about,” and that the company has “a shot” at bringing the cost of a full solar roof down to that of a normal, shingled version plus the cost of utilities.

Drew Baglino, Tesla’s vice president of technology, said his team “is super motivated by that goal, and we think we can achieve it,” before clarifying that they are “laser focused” on matching that cost.

“I’ve had a number of meetings with with Drew, where I’m like banging the table, [saying] ‘Damn it, we’ve got to achieve this,’” Musk added, to laughs from the room.

Advanced Summon

Tesla has been nearing the rollout of a feature called “Advanced Summon” for a while now, where owners will be able to tap a button in the company’s app and summon their car to them. The car will navigate parking lots and pedestrians all by itself.

Musk offered an update on the rollout of the feature Tuesday. “We’re making steady improvements to it. It’s close to being amazing. It’s not quite there but it’s close,” he said. “There’s a lot of complexity in parking lots.”

Musk said he wants to make sure Advanced Summon is safe before rolling it out widely. “We don’t want to like, run someone over,” he said. “The threshold is, is it more convenient to summon your car, or walk your car, and if it’s more convenient to walk, summon is not that useful. So it has to move reasonably fast.”

Advanced Summon was supposed to be available by now, according to Musk himself. But the Tesla CEO shied from putting a time frame on a full rollout. “I’m sometimes a little optimistic about timeframes,” he said. “It’s time you knew.”

Musk versus the Media

Musk is known for hectoring the media’s coverage of Tesla, and by the end of this year’s shareholder meeting it had become a persistent topic that threaded through multiple questions.

When asked how Tesla can make sure its status as a “true Great American success story gets told,” Musk responded that “it’s very distressing, it makes me sad. I’m not sure what to do about it.”

Musk said Tesla does provide “rebuttals” to stories it perceives to be negative, but that the responses get “buried.”

“It’s the most crazy disinformation campaign I’ve ever seen,” Musk said.

One shareholder proposed Musk turn to media moguls like Michael Bloomberg and Arianna Huffington to find a better way to get the company’s message out, which Musk said was a “good idea.”

But, Musk added that be believes there’s been “quite a few negative articles in Bloomberg.”

Another shareholder asked Musk why he doesn’t spend money on marketing or advertising, something the company famously avoids.

“Currently, we are selling more cars than we can make,” Musk said. “Spending money on advertising would make things worse financially.” Musk also added that he believes there’s “just too much trickery in advertising.”

Welcome, Robyn Denholm

Robyn Denholm was appointed late last year to replace Musk as chair of Tesla’s board of directors, and she has given statements about the company in the time since. But this was the first time she’s stood up in front of a crowd and represented the company so fully, and so this was the public’s first good chance to see how she handles herself at Tesla. (She recently completed the process of stepping down from her other company, Telstra.)

Her first address to the company’s shareholders was a mix of humor and reinforcement. She joked about having to run through the “boring” part of the night (taking votes on shareholder proposals) before getting to Musk’s presentation and the Q&A session, which she said was “always a highlight of the stockholders meeting.”

But Denholm was sincere, too, about the support the company’s gotten despite myriad struggles. “I would like to start today’s meeting by thanking you, our investors, our shareholders, for the tremendous support that you’ve given Tesla not just over the last 12 months, but also over the last many years,” she said. “When you’re changing the world, and many industries in the process, you need to have a certain amount of intestinal fortitude as an investor. And when I speak to many of you, as shareholders, you have that in spades.”

“I am incredibly honored to be your chair,” she said.


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