Investors questioned CEO Elon Musk about his predictions for the global economy and the company’s financial objectives at the Tesla 2022 shareholders meeting on Thursday.
Musk jokingly said that “making macroeconomic prognostications is a recipe for disaster” however, it was estimated that “we are past peak inflation” and probably witness a “relatively mild recession,” lasting roughly 18 months.
The CEO used commodities prices as the basis for his economic analysis. For the supplies and products it needs to produce electric automobiles, Tesla is being required to make payments.
“We do get a fair bit of insight into where prices of things are going over time because when you’re making millions of cars, you have to purchase commodities many months in advance of when they’re needed,” he said.
The continued Covid epidemic in China and Russia’s conflict with Ukraine in the second quarter of 2022 both hindered Tesla’s Shanghai factory and exacerbated supply chain snarls, part shortages, and labour issues across the car sector.
Additionally, Musk was questioned on Tesla’s future capital use. According to the CEO, Tesla will expand its capital expenditures and R&D spending “as fast as we can do it without wasting it.” Depending on Tesla’s projected future cash flow, he continued, “a sort of share buyback is possible.”
SpaceX CEO Elon Musk stated that he “wouldn’t want to commit” to Tesla share buybacks just yet and that the situation could alter due to a force majeure occurrence. He reaffirmed, though, that a “share buyback is on the table” if Tesla’s projected future cash flow is strong and the global economy is “relatively stable.”
By 2030, 12 production plants will produce 20 million vehicles annually.
Musk stated that he believes it will require about a dozen factories, with each factory manufacturing 1.5 million to 2 million vehicles yearly, to reach Tesla’s unrealistic target of producing 20 million vehicles annually by 2030.
Tesla now has car-assembling facilities in Shanghai, Austin, Texas, Fremont, California, and a region outside Berlin, Germany. Additionally, it manufactures batteries in a facility it jointly owns with Panasonic in Sparks, Nevada.
According to Musk, Tesla recently produced its 3 millionth car and plans to announce the location of a new factory later this year.
Musk stated on Thursday that the business recycles only 50 vehicle battery packs each week in Nevada, and he explained that this is because the majority of the battery packs from Tesla cars are still in use today.
The well-known CEO of Tesla also reaffirmed earlier commitments made during the shareholder meeting, including that the company is getting closer to “solving autonomy” and delivering a self-driving car that can function like a robotaxi without a driver at the wheel.
He pleased shareholders by asking for their opinions on where to locate Tesla’s next factory (several shouted “Canada”) and by claiming that the audience was filled with retail investors who knew more about the business than Wall Street analysts and other financial experts.
He also delivered some discouraging news to shareholders, stating that although Tesla plans to begin manufacturing the Cybertruck in the middle of 2023, it will not be able to sell it with the same features and costs that were initially promised when the company unveiled the prototype pickup in 2019.
Musk stated, “I think there’s no way to have anticipated quite the inflation that we’ve seen,” in reference to the anticipated increased cost of the Cybertruck. Tesla’s Austin, Texas factory, where the shareholder meeting was held on Thursday, will be “installing the production equipment, tooling and all, starting in the next couple of months”
A total of 3 million applications were received
The two companies that engineering students now most desire to work for are Tesla and SpaceX, according to Musk, who boasted about this at the conference. According to him, 3 million people applied for jobs at Tesla last year. Regarding his two enterprises, he added, “We do allow people to move from one company to the other if they would like.” He further said, “That’s cool we support that.”
Random drawings were used to choose attendees for the live event, while online viewers watched video livestreams. Audience members during the live event shouted obscenities at shareholders who made resolutions that the Tesla board did not think should be approved.
During a question-and-answer period, a shareholder who had the chance to ask Elon Musk a question instead attacked the media for how it had covered the CEO and praised him for “making the world a better place.” The shareholder introduced his 6-year-old, who he claimed was following the business event from home, and said hello to them both. There was a standing ovation for him.
Gary Black, a Tesla supporter and managing partner of The Future Fund, questioned Musk on the possibility of his eventual resignation as CEO of Tesla. Musk claimed that because of all the outstanding employees in his company, Tesla would succeed even if he were “kidnapped by aliens.”
He then clarified, “I’m not leaving to be clear.”