Tesla CEO Elon Musk gestures while visiting the Tesla Gigafactory construction site in Grünheide near Berlin, Germany, August 13, 2021.
Patrick Plus | Reuters
At Tesla’s 2022 AGM on Thursday, investors asked CEO Elon Musk how the company plans to spend its money in the coming years and what its global economic outlook is.
Musk joked that “macro forecasting is a recipe for disaster,” but nevertheless believes that “we are past the peak of inflation” and are likely to see a “relatively mild recession” lasting about 18 months.
The CEO based his economic analysis on the prices of goods Tesla must pay for the materials and goods needed to make electric vehicles.
“We have a good idea of how the prices of things change over time because when you make millions of cars, you have to buy food months before you need it,” he said.
In the second quarter of 2022, Russia’s war with Ukraine and the ongoing Covid pandemic in China hampered Tesla’s Shanghai plant and exacerbated supply chain problems, parts shortages and labor problems in the auto industry.
Musk was also asked how Tesla plans to use its capital in the coming years. The CEO said that Tesla will first increase capital spending as well as R&D spending “as quickly as possible without wasting it.” He added that “some share repurchases are possible,” depending on what Tesla’s future cash flow looks like.
Musk, who is also the CEO of SpaceX, said he “would not like to be involved” in a Tesla share buyback “yet” and that a force majeure event somewhere could change the equation. However, he reiterated that if Tesla’s future cash flow looks strong and the world is “relatively stable,” then “stock buybacks are on the table.”
20 million vehicles per year at 12 plants by 2030
Overall, Tesla aims to produce 20 million vehicles a year by 2030, which is an ambitious target, and Musk said he believes it would require about a dozen factories, each producing 1.5 million to 2 million vehicles. in year.
Tesla currently operates car assembly plants in Shanghai; Fremont, California; Austin, Texas; and outside of Berlin in Germany. He also manufactures batteries at a plant in Sparks, Nevada, which he co-operates with Panasonic.
Tesla recently produced its 3 millionth vehicle, Musk said Thursday, and hopes to announce a new factory later this year.
Meanwhile, the company only recycles 50 car batteries in Nevada a week, Musk said on Thursday, explaining that the number is so low because most Tesla car batteries are still used in vehicles.
At the shareholder meeting, the famed CEO also reiterated promises he had made in the past, including that Tesla is getting closer to the goal of “solving the problem of autonomy” and building an autonomous vehicle that can operate as a robotic taxi without a driver behind the wheel.
He delighted shareholders by asking for their advice on where to build the next Tesla plant (many shouted “Canada”), and telling a room full of seemingly retail investors that they understood the company better than financial professionals, including Wall Street analysts. straight.
But he also delivered some disappointing news to shareholders, reiterating that Tesla intends to release the Cybertruck in mid-2023 but won’t be able to sell it with the same specs and price as it originally announced when the company unveiled the pickup. .-up experimental in 2019.
Of the Cybertruck’s projected higher price, Musk said, “I don’t think there was any way we could have foreseen all the inflation that we’ve seen.” Tesla will “install production equipment, tools and everything starting in the next few months” at its Austin, Texas plant, which held a shareholder meeting on Thursday.
Musk bragged at the meeting that Tesla and his reusable 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 said, “We allow people to switch between companies if they want to,” referring to his two companies. “It’s cool, we support it.”
Members of the public who attended the face-to-face meeting were selected by lottery, while other shareholders listened to live online broadcasts. The live streamers began raucous taunts at shareholders who put forward proposals that Tesla’s board of directors did not agree to accept.
The shareholder took the microphone during the Q&A, waived his right to question Elon Musk and instead criticized the media for their treatment of Musk and thanked the CEO for “making the world a better place.” The shareholder also greeted his 6-year-old son, who he said was watching a business event at home. He received a standing ovation.
Tesla bull and The Future Fund managing partner Gary Black asked Musk if he could ever step down as Tesla CEO. Musk said that because of all the great people in his organization, he thought Tesla would succeed even if he was “abducted by aliens.”
He then emphasized, “I’m not leaving to make things clear.”