Tesla CEO Elon Musk gestures as he visits the construction site of Tesla’s Gigafactory in Gruenheide near Berlin, Germany, August 13, 2021.
Patrick Pleule | Reuters
At the Tesla 2022 shareholders’ meeting on Thursday, investors asked CEO Elon Musk how the company plans to spend its money in coming years, and about his global economic outlook.
Musk joked that “making macroeconomic prognostications is a recipe for disaster” but nonetheless estimated that “we are past peak inflation” and likely to see a “relatively mild recession,” lasting for about 18 months.
The CEO based his economic analysis on the commodity prices Tesla is being asked to pay for materials and goods it needs to make electric vehicles.
“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.
In the second quarter of 2022, Russia’s war on Ukraine and the ongoing Covid pandemic in China hampered Tesla’s Shanghai factory, and worsened supply chain snarls, parts shortages and labor problems throughout the auto industry.
Musk was also asked how Tesla plans to use its capital in coming years. The CEO said Tesla will primarily increase its capital expenditures and research and development spending “as fast as we can do so without wasting it.” I have added that “a sort of share buyback is possible,” depending on what Tesla’s future cash flow looks like,
Musk, who is also the CEO of SpaceX, said he “wouldn’t want to commit” to Tesla share buybacks just yet, and that a force majeure event somewhere could change the equation. However, he reiterated that if Tesla’s future cashflow is looking solid, and the world is “relatively stable,” then a “share buyback is on the table.”
20 million cars a year in about 12 factories by 2030
Overall, Tesla aims to produce 20 million vehicles annually by 2030, a lofty goal, and Musk said he thinks this will take approximately a dozen factories, with each factory producing 1.5 million to 2 million units per year.
Currently Tesla operates vehicle assembly plants in Shanghai; Fremont, Calif.; Austin, Texas; and outside of Berlin in Germany. It also produces batteries at a factory in Sparks, Nevada, that it jointly operates with Panasonic.
Tesla recently produced its 3 millionth car, Musk said on Thursday, and is hoping to announce a new factory location later this year.
At the same time, the company is recycling only 50 vehicle battery packs per week in Nevada, Musk revealed Thursday, explaining that the number is so low because most battery packs from Tesla cars are still in vehicles in use today.
During the shareholder meeting, the celebrity CEO also repeated promises he has made in the past including that Tesla is closing in on the goal of “solving autonomy,” and delivering a self-driving vehicle capable of operating as a robotaxi without any driver behind the wheel.
He delighted shareholders by seeking their input on where to set up Tesla’s next factory (many shouted “Canada”) and by telling the room seemingly full of retail investors that they understood the company better than finance professionals including Wall Street analysts.
But he also broke some disappointing news to shareholders, reiterating that Tesla is aiming to produce the Cybertruck in mid-2023 but will not be able to sell it with the same specifications and pricing that were originally given when the company unveiled the experimental pickup in 2019. .
Of the Cybertruck’s anticipated higher price, Musk said, “I think there’s no way to have anticipated quite the inflation that we’ve seen.” Tesla will be “installing the production equipment, tooling and all, starting in the next couple of months” at its Austin, Texas factory where the shareholder meeting took place on Thursday.
Musk boasted at the meeting that Tesla, and his re-usable rocket company SpaceX, are two of the places where engineering students most want to work today. Tesla received 3 million job applications last year, he said. He also revealed, “We do allow people to move from one company to the other if they would like,” referring to his two businesses from him. “That’s cool we support that.”
Audience members at the in-person meeting were selected through a random drawing, while other shareholders tuned in to video livestreams online. The live event attendees offered raucous jeers at shareholders who presented proposals that Tesla’s board did not agree they should pass.
One shareholder took the mic during a question-and-answer session, gave up his right to ask Elon Musk a question, and instead bashed the media for his treatment of Musk and thanked the CEO for “making the world a better place.” The shareholder also said hello to his 6-year-old at home who said he was watching the business event back home. I have received a standing ovation.
Tesla bull and managing partner of The Future Fund, Gary Black, asked Musk about whether he may ever leave his role as CEO at Tesla. Musk said due to all the great people in his organization, he thought Tesla would do well even if he was “kidnapped by aliens.”
He later emphasized, “I’m not leaving to be clear.”
George is Digismak’s reported cum editor with 13 years of experience in Journalism