Horses were a somewhat unexpected theme at Tesla‚Äôs 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‚Äôs announced pickup would have enough go power to haul her horse. ‚ÄúI didn‚Äôt mean to insult horses earlier,‚ÄĚ Musk replied. ‚ÄúI love horses.‚ÄĚ (Yes, the planned pickup could haul her horse.)
The shareholder meeting had some ups and downs ‚ÄĒ 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‚Äôs stock price is at a 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):
‚ÄúI want to be clear: there is not a demand problem,‚ÄĚ Musk said at the top of his presentation Tuesday. ‚ÄúAbsolutely not.‚ÄĚ
Wall Street analysts and industry experts have questioned the demand for Tesla‚Äôs cars in 2019. This is largely because Tesla‚Äôs cars are still fairly expensive. They‚Äôre no longer eligible for the full federal EV tax credit, and the cheapest $35,000-version of the car basically never materialized, meaning every one of Tesla‚Äôs vehicles is sold above the average transaction price in the US.
Even Musk said in January that ‚Äúthe inhibitor‚ÄĚ to buying a Tesla is ‚Äúaffordability‚ÄĚ because ‚Äúpeople literally don‚Äôt have the money to buy the car.‚ÄĚ
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‚Äôt holding a reservation for the Model 3, without giving specifics.
‚ÄúSales have far exceeded production, and production has been pretty good,‚ÄĚ Musk said. ‚ÄúSo, we‚Äôre actually doing well, and we have a decent shot at a record quarter on every level,‚ÄĚ he added, echoing a point he made in a recently-leaked all-staff email. ‚ÄúIf not, it‚Äôs going to be very close.‚ÄĚ
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‚Äôs 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‚Äôs shareholder meeting, though, Musk finally gave the beginnings of an answer, calling the acquisition ‚Äúquite strategic.‚ÄĚ He‚Äôs saving full details for when Tesla holds a ‚Äúbattery and powertrain investor day‚ÄĚ (a follow-on event to the recent ‚Äúautonomy investor day‚ÄĚ), but Musk said Maxwell had developed some ‚Äúvery important technologies‚ÄĚ 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‚Äôs growth is battery production.
Tesla pickup truck
Musk has expressed his love for the forthcoming Tesla pickup truck again and again, and so it‚Äôs no surprise he repeated that sentiment at the shareholder meeting. ‚ÄúI think it‚Äôs the coolest car I‚Äôve ever seen, to be frank,‚ÄĚ he said. Musk echoed previous claims about how the truck will look ‚Äúcyberpunk‚ÄĚ and like it‚Äôs come from a ‚Äúsci-fi movie.‚ÄĚ
Tesla didn‚Äôt reveal any images of the truck Tuesday, save for a very indistinguishable teaser. But the pickup truck will be revealed sometime later this summer, ‚Äúhopefully,‚ÄĚ Musk said, which clarified previous comments about Tesla‚Äôs 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‚Äôs also said he wants it to start at less than $50,000.) Also, it‚Äôs tough enough to haul a horse.
‚ÄúWe‚Äôre trying to create something new and it‚Äôs, it‚Äôs not just basically a copy of the form factor of everything else,‚ÄĚ he said. ‚ÄúBut you still want it to be great. It‚Äôs very hard. This is a very hard thing.‚ÄĚ
Tesla… mining company?
The pickup truck, as well as the other products in Tesla‚Äôs pipeline, like the second-generation Roadster and the Tesla Semi, aren‚Äôt 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‚Äôs hunger for batteries, and so Musk said he‚Äôs considering moving Tesla further into the lithium-ion battery supply chain.
‚ÄúWe might get into the mining business, I don‚Äôt know, maybe a little bit at least,‚ÄĚ he said. ‚ÄúWe‚Äôll do whatever we have to to ensure that we can scale at the fastest rate possible.‚ÄĚ
Tesla‚Äôs whole thing is vertical integration ‚ÄĒ 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‚Äôs 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.
Musk announced on a conference call in April that Tesla is going to start offering insurance to its customers, and said it ‚Äúwill be more compelling than anything else‚ÄĚ on the market, since the company has more direct access to its cars‚Äô (and therefore its drivers‚Äô) data. But in response to a question about what is holding up the offering, Musk said Tesla has ‚Äúa small acquisition that we need to complete, and a bit of software to write.‚ÄĚ
He didn‚Äôt specify what company Tesla might be buying, but reassured shareholders that ‚Äúit won‚Äôt be long before‚ÄĚ Tesla starts offering insurance.
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‚Äôt much of a commercial product. They‚Äôre being deployed in eight states, Musk said Tuesday, but he added that making them is ‚Äúquite a hard problem.‚ÄĚ
Tesla is working on a third iteration of the tiles, which Musk said he‚Äôs ‚Äúreally excited about,‚ÄĚ and that the company has ‚Äúa shot‚ÄĚ 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‚Äôs vice president of technology, said his team ‚Äúis super motivated by that goal, and we think we can achieve it,‚ÄĚ before clarifying that they are ‚Äúlaser focused‚ÄĚ on matching that cost.
‚ÄúI‚Äôve had a number of meetings with with Drew, where I‚Äôm like banging the table, [saying] ‚ÄėDamn it, we‚Äôve got to achieve this,‚Äô‚ÄĚ Musk added, to laughs from the room.
Tesla has been nearing the rollout of a feature called ‚ÄúAdvanced Summon‚ÄĚ for a while now, where owners will be able to tap a button in the company‚Äôs 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. ‚ÄúWe‚Äôre making steady improvements to it. It‚Äôs close to being amazing. It‚Äôs not quite there but it‚Äôs close,‚ÄĚ he said. ‚ÄúThere‚Äôs a lot of complexity in parking lots.‚ÄĚ
Musk said he wants to make sure Advanced Summon is safe before rolling it out widely. ‚ÄúWe don‚Äôt want to like, run someone over,‚ÄĚ he said. ‚ÄúThe threshold is, is it more convenient to summon your car, or walk your car, and if it‚Äôs more convenient to walk, summon is not that useful. So it has to move reasonably fast.‚ÄĚ
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. ‚ÄúI‚Äôm sometimes a little optimistic about timeframes,‚ÄĚ he said. ‚ÄúIt‚Äôs time you knew.‚ÄĚ
Musk versus the Media
Musk is known for hectoring the media‚Äôs coverage of Tesla, and by the end of this year‚Äôs shareholder meeting it had become a persistent topic that threaded through multiple questions.
When asked how Tesla can make sure its status as a ‚Äútrue Great American success story gets told,‚ÄĚ Musk responded that ‚Äúit‚Äôs very distressing, it makes me sad. I‚Äôm not sure what to do about it.‚ÄĚ
Musk said Tesla does provide ‚Äúrebuttals‚ÄĚ to stories it perceives to be negative, but that the responses get ‚Äúburied.‚ÄĚ
‚ÄúIt‚Äôs the most crazy disinformation campaign I‚Äôve ever seen,‚ÄĚ 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‚Äôs message out, which Musk said was a ‚Äúgood idea.‚ÄĚ
But, Musk added that be believes there‚Äôs been ‚Äúquite a few negative articles in Bloomberg.‚ÄĚ
Another shareholder asked Musk why he doesn‚Äôt spend money on marketing or advertising, something the company famously avoids.
‚ÄúCurrently, we are selling more cars than we can make,‚ÄĚ Musk said. ‚ÄúSpending money on advertising would make things worse financially.‚ÄĚ Musk also added that he believes there‚Äôs ‚Äújust too much trickery in advertising.‚ÄĚ
Welcome, Robyn Denholm
Robyn Denholm was appointed late last year to replace Musk as chair of Tesla‚Äôs board of directors, and she has given statements about the company in the time since. But this was the first time she‚Äôs stood up in front of a crowd and represented the company so fully, and so this was the public‚Äôs 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‚Äôs shareholders was a mix of humor and reinforcement. She joked about having to run through the ‚Äúboring‚ÄĚ part of the night (taking votes on shareholder proposals) before getting to Musk‚Äôs presentation and the Q&A session, which she said was ‚Äúalways a highlight of the stockholders meeting.‚ÄĚ
But Denholm was sincere, too, about the support the company‚Äôs gotten despite myriad struggles. ‚ÄúI would like to start today‚Äôs meeting by thanking you, our investors, our shareholders, for the tremendous support that you‚Äôve given Tesla not just over the last 12 months, but also over the last many years,‚ÄĚ she said. ‚ÄúWhen you‚Äôre 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.‚ÄĚ
‚ÄúI am incredibly honored to be your chair,‚ÄĚ she said.
Correction: This article mistakenly stated that Tesla‚Äôs cars aren‚Äôt eligible for the federal EV tax credit. They are no longer eligible for the full tax credit, but buyers can still receive half the $7,500 value until July 1st, and half again until the end of the year. The article has been updated.