Tesla
‘s annual shareholder meeting has wrapped up and the biggest surprises weren’t about succession planning—something top of mind for investors lately. Or even about products. The bombshell was about advertising.
Tesla CEO Elon Musk said Tesla would try some running some ads. The crowd in Austin went wild. Shareholders love the idea.
The bigger that Tesla gets, the more it begins behaving like a traditional auto maker. Running ads is the latest example.
Coming into the meeting, investors were interested in hearing about how Musk plans to spend his time, especially after recently naming a new Twitter CEO. He said Twitter was a short-term distraction and that it was in a stable place, adding he doesn’t need to devote a lot of “incremental time” to his social media platform.
Product development came up too. There are also a few new products Musk is excited about. The humanoid robot Optimus was one he highlighted. Investors are familiar with Optimus, but Tesla showed off new videos of the robot moving around. Musk added he believes the majority of Tesla’s value in the future would be derived from the robot.
Another product is likely a smaller car, but details were thin. A new Tesla model has come up at meetings a few times recently. Details, to this point, about have new model have always been thin. The next model to ship with be Cybertruck which is due to be delivered later this year.
Tesla stock is up 0.6% in after-hours trading. Shares closed up 0.1% Tuesday at $166.52 a share. The
S&P 500
and
Nasdaq Composite
closed down 0.6% and 0.2%, respectively.
A ’22 Review
Musk dropped some important nuggets at the 2022 annual meeting of shareholders. He said that the company was likely at peak inflation. That was a good call. Growth in U.S. consumer prices has decelerated for 10 consecutive months. Tesla also started cutting prices for it vehicles at the end of 2022.
The price cuts unnerved investors, raising questions about demand and profit margins. Still, 2022 was a pretty good year. The company added almost 30,000 workers and reported operating income of $13.7 billion, a record.
Succession, Not the TV Show
There are a few reasons investors are thinking more about succession. Twitter has a new CEO, Tesla board chair Robyn Denholm put out a video stressing the strength of Tesla’s management and board and Musk is appearing on CNBC at 6 p.m. Eastern time.
The Board
Annual meetings always have some board-level business to conduct. Japanese businessman and investment professional Hiro Mizuno didn’t stand for reelection to Tesla’s board when his term ends. Tesla co-founder J.B. Straubel was nominated to replace him. He served as Tesla’s chief technology officer from 2005 to 2019. Today, Straubel is running his EV battery materials company Redwood Materials.
He was elected to the board. The outcome of the vote wasn’t a surprise.
Other Product Notes
Musk said Tesla would move to 48-volt electrical architecture. That’s an “inside-baseball” reference for car wonks. Essentially, car electrical systems have been based on 12-volt architecture. Going to 48-volts can make things more efficient and save on copper usage.
The Stock
Tesla shares dropped 6.6% after the 2022 annual meeting of shareholders, held in August. Nothing really big happened at that event. Sometimes investors start to expect things and get disappointed when nothing happens. It took seven days for Tesla stock to recover that loss. Tesla stock was above $300 a share back then.
Through Tuesday trading, Tesla stock is up roughly 35% year to date.
Write to Al Root at [email protected]
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