Tesla shareholders reject bid to strip Musk of chairman role

by Ben Pena June 7, 2018, 1:37
Tesla shareholders reject bid to strip Musk of chairman role

A vote to kick Tesla Chairman and Chief Executive Elon Musk out of his chairman's seat failed at Tesla's annual shareholder meeting Tuesday. Bullish-leaning firms such as Baird think that Tesla's valuation can remain elevated if enthusiasm over the long-term potential of the Model 3, Tesla Semi and Model Y keeps churning.

Elon Musk expressed confidence about Tesla achieving the next production goal for its crucial Model 3, predicting that manufacturing will become a strength for the electric vehicle maker over time.

The vote comes at the behest of an individual shareholder, Jing Zhao of Concord, California, who owned just 12 shares of Tesla stock - allowing him to attend the meeting and propose a vote on the issue of the chairman seat.

When it's available, the Tesla Model Y would take on challengers such as the Jaguar I-Pace, BMW iX3, and Mercedes-Benz EQC, which may beat it to market.

"So, we're not going to do motorcycles", Musk said. "But I think we're getting there".

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But the company added that "production bottlenecks" had left it behind on its planned ramp-up for the Model 3. The last several months, he said, were the most "hellish" in his life. What matters for now is that Tesla is close to hitting its target production numbers (finally!) for the Model 3 and it does begin to feel like the corner is being turned.

However, the proposal was defeated by what Tesla described as a "wide majority". Kallo also mentioned the re-election of three board members as a vote of confidence in Tesla's management, adding that the company's energy storage business is an "opportunity" that is now "underappreciated" by some investors.

"The Board believes that the Company's success to date would not have been possible if the Board was led by another director", the board said. The goal, said Musk, is to be able to go nearly anywhere on earth using the Tesla Supercharger system. "Next quarter, at the Gigafactory, we expect to make more battery capacity than all other EVs combined worldwide, including China". Tesla shares are down about 7% so far this year.

He repeated his assertion that the company was not planning on raising additional debt or equity, without providing a timeframe, and said he expected positive net income and cash flow in the third and fourth quarters.

The CEO noted that plans for the trial will be announced within the next few months.

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