Proposal to appoint an independent director to replace Elon as Chairman of Tesla was rejected
A Chinese American shareholder named Mr. Jing Zhao, who holds up to 12 shares of Tesla stock and declined to reveal his Chinese name, proposed appointing an independent chairman to Tesla, which has been held by Elon since 2004. Meanwhile, he also holds positions like CEO and Chief Product Architect. In order to minimize potential conflicts of interest such as Tesla’s acquisition of SolarCity, Mr. Zhao suggested that Tesla appoint an independent chairman.
CtW Investment Group, another investment institution, suggested that most of Tesla’s existing board members are associated with Elon, and lack experts with in-depth knowledge of the automotive industry. Therefore, they suggested a vote to re-elect three board members, including Antonip Gracias, founder of Volar Equity Partners, Elon’s brother Kimball Musk, and James R. Murdoch, CEO of 21st Century Fox.
Tesla issued a statement refuting these comments, stating that Gracias was an “expert in supply chain optimization”, Kimball had “rich experience in retail and consumer markets”, and Murdoch had “international market knowledge.”
The only purpose of this statement, to me, is to let the public realize CtW is right that Tesla’s board of directors does lack experts with in-depth knowledge of the automotive industry.
Of course, both proposals were ultimately rejected by the majority of shareholders, and Tesla’s general counsel Todd Maron stated that the opponents of the proposal accounted for “the vast majority.”
If you are a long-term Tesla observer, I’m sure you’ve already got a smile on your face that says “this happens every year”:)
At the 2017 annual shareholder meeting, the California State Teachers’ Retirement System, which also holds a small amount of Tesla shares, proposed adding an independent director to the board of directors of Tesla and increase the frequency of board elections from once every three years to once a year.
Like this year, this proposal was rejected by the majority of shareholders as soon as it was raised.
Tesla has indeed added two independent directors (Elon also made a strong statement that it had nothing to do with the proposal). But don’t be naive to think that anyone can actually balance Elon on the Board of Directors. Even with the addition of new directors, there are still 5 directors from the Elon faction, and only 4 truly independent directors. Considering that he is still the largest shareholder and chairman of Tesla, the effect of adding new directors to improve the independence of the board is minimal…
To sum up in the words of Morningstar analyst David Whiston, it is difficult to imagine shareholders opposing Elon: “If you don’t believe in Elon, why hold Tesla’s stock until now?”
Tesla Model 3
This is the real topic worth discussing, and the amount of information released is also very large.
Firstly, an unquestionable fact is announced: with the increase of production capacity and delivery volume, Model 3 has become the best-selling intermediate luxury car model in the United States. In fact, by April, only Mercedes-Benz C-Class was barely supporting the traditional faction. However, when faced with a player whose sales volume is entirely determined by production capacity like Model 3, it was expected that the traditional faction would be defeated.
Then there is production capacity. The second quarter is about to end, and currently the production capacity of Model 3 is stable at 500 vehicles per week. Elon reiterated that by the end of this month, it is “very likely” to reach 5,000 vehicles per week. A new production line set up two weeks ago has also been put into operation. If there were various uncertainties at the Q1 earnings conference, today’s statement should be stable.
Tesla currently has three Model 3 production lines, and the efficiency of the third line built two weeks ago has improved significantly compared to the first two lines. With only the first two lines, there is a chance to reach a production capacity of 5,000 vehicles per week by the end of this month. With the addition of the third line, Tesla officially stated that it is “very confident” in achieving its production capacity target.
In addition, while delivery has grown rapidly, the quality and reliability of Model 3 have also increased by 4 to 5 times.
Last month, Tesla opened up options for the Model 3 with dual electric motors and high-performance Performance versions. According to Elon, small-scale trial production of these two versions has been launched this month, and mass production is expected to be achieved in September. The standard battery version with a starting price of $35,000 is expected to be mass-produced by the end of the year.Translate the following Chinese Markdown text to English Markdown text in a professional manner, keeping the HTML tags inside Markdown and only output the result.
Recently, media reports revealed that about 20% of Model 3 reservation holders cannot bear the long delivery period and choose to cancel their deposit. To address this issue, Tesla will launch Model 3 test drive services in its stores starting this month, aiming to cover all stores across North America by the end of next month. If you still cancel your deposit after the test drive, there is nothing anyone can do.
Finally, Tesla is collaborating with insurance companies to try to introduce lower-cost Model 3 insurance, about 30% lower than BMW 3 Series.
Tesla Autopilot
With the recent moves from General Motors’ Cruise and Waymo, Autopilot is clearly a hot topic.
It is hard to imagine Autopilot, which has been constantly changing management, about to make significant updates. Elon has promised to release a new version with significant improvements this month, and additionally major updates will be pushed in the coming months. “The performance and reliability of AP will increase exponentially in the next 6-12 months, and our improvements are moving at a very rapid pace.”
Forgive me for saying so, but you can skip the latter sentence, as he also used “exponential growth” when outlining the production capacity for Model 3. We reached a production capacity of 10,000 vehicles per week by the end of 2017.
However, Tesla has disclosed for the first time that there are two versions of Autopilot. The “super complex” version is not running well, while the simplified version deployed on Tesla’s vehicles worldwide is running well.
As expected, Elon once again talked about the competition between autonomous driving technology routes and insisted that lidar is not replaceable. The reason remains the same as before, based on first principles: lidar is wrong in terms of wavelength and relying on it cannot solve the problem 100%; the most important thing is to solve the challenge in computer vision. Once this problem is solved, ultrasonic sensors and millimeter-wave radars assist cameras in extreme road conditions, and equipping lidar is meaningless.
Another heavyweight plan is that Tesla will launch a free trial of the AP program, which is expected to be released in the coming months. Making a dark guess, perhaps the series of accidents involving Tesla vehicles this year have made more and more new owners become scared birds, and the proportion of choosing to install AP has declined?
Tesla Model YAfter last year’s shareholder meeting, which featured a rendering of the Model Y, the annual shareholder meeting has come around again and Elon has provided another rendering – this one.
Looking like a combination of the Model X and Model 3, the transition between the front windshield and the hood is very linear, keeping with the company’s focus on low aerodynamic drag, but the proportions look a bit odd.
Relative to its exterior design, the Model Y’s comprehensive overhaul in terms of its design is what truly brings excitement. Elon has already stated for the Nth time that making the Model Y is something that really excites him, calling it a “Super Special” product. We can only wait and see.
The Model Y is expected to be unveiled in March of next year or Q2. The Model Y, the Semi Truck and the new Roadster all have a production time frame of two years.
Tesla Supercharger Stations
Tesla plans to continue building Supercharger stations around the world, with the number of charging stations worldwide already reaching 9969. Design work for the third-generation Supercharger stations, which will offer an output of 200 kW to 250 kW, is mostly completed and is set to be launched by the end of this year. The third-generation charging stations will be highly integrated with solar panels, eliminating the need to connect to the power grid. Elon has said this will “drive a profound change in the charging infrastructure,” significantly accelerating the expansion of the charging network.
Regarding charging time, Elon has said that the ratio of driving time to charging time must be at least 6:1, with the future goal of achieving 8:1 or even 10:1.
New Roadster
I remember not long after the new Roadster was released, a Japanese team set a new record for acceleration from zero to one hundred by piling on insane amounts of materials, without considering mass production. At the time, I wondered what kind of means Tesla (or any other electric supercar manufacturer) would have to establish a differentiated product advantage for this performance monster, which accelerates from zero to one hundred in just 2.1 seconds.
The currently announced performance specifications are for the base Roadster, Tesla plans to release a Space X package for it in the future. It’s quite poverty-limiting to directly name a package after a rocket-building company, I wonder if it’ll be capable of low-altitude flight? Elon wants to use the new Roadster to prove to the public that electric cars can excel in all aspects over combustion engine sports cars and completely shatter the strong aura that has been established in the public eye for combustion engine sports cars.
The Semi Truck may be the first product in Tesla’s history to have major improvements announced before even entering production. Elon says that there is a new version of the Semi Truck that you haven’t driven yet; give it three minutes and you’ll fall in love with the new version just like him. It is said that the Tesla team has a deeper understanding and can make the performance of the Semi Truck even better. The final release of the new version is expected to exceed the industry’s understanding of the performance of pure electric semis. Previously, Martin Daum, CEO of Daimler Truck North America, said that if Germany and California were in the same physical world, the parameters of the Tesla Semi Truck would already violate the laws of physics. Elon joked during the earnings call with Martin, “I know him, I actually learned physics for a year in college. In fact, our production version will have even longer range, and I’d be happy to chat with him about physics.”
In the future, the Semi Truck will be launched in China, the United States, Europe, and other global regions. Currently, a small-scale trial production has started in one factory and later this year, another factory will also carry out similar engineering work.
The global cumulative installation capacity of Tesla’s energy storage battery has exceeded 1 GWh, and like the Model 3, the production capacity of the energy storage business is limited, making it entirely dependent on production capacity. It is expected to “grow exponentially”. More importantly, Elon predicts that the energy business will achieve a gross profit margin similar to the automotive business by the end of this year or early next year, approximately 20% to 30%. This is crucial for Tesla’s long-term pressured financial situation.
Gigafactory 1’s battery capacity will significantly increase next year and exceed the sum of the battery output of all other factories in the world. (Samsung SDI, LG Chem, CATL, and BYD send their curious looks.)Elon reiterated that Tesla batteries have the highest energy density and the lowest cost. Tesla has made breakthroughs in battery density and cost, and if material costs don’t fluctuate significantly, Tesla’s cell cost will be less than $100/kWh by the end of this year. Meanwhile, the pack cost will be reduced to $100/kWh within the next two years.
With the current technological reserves, Tesla has mastered the technology to improve battery performance by 30% – 40%, and it is expected to increase by 30% in the next 2 – 3 years. In the next 6 – 8 years, energy density will double through improvements to the lithium anode.
Gigafactory 1 has accelerated its progress in the past year and has completed about one-third of the planned building area. In addition to the Chinese super factory to be announced soon, the location of Tesla’s European super factory is expected to be announced by the end of this year.
Elon said that in the long run, Tesla plans to build 10-12 Gigafactories worldwide.
Chinese Factory
Ren Yuxiang, head of Tesla’s government negotiation for the Chinese super factory and global sales president, has appeared in various management meetings of Tesla, including today’s shareholder meeting. More and more information shows that Tesla’s plan to build a factory in China will be announced soon. Currently, Tesla is still negotiating with various levels of the Chinese government on the details of the factory construction, and the specific factory construction plan is expected to be announced as soon as next month.
It is known that the Chinese Gigafactory will have the function of manufacturing both batteries and cars. When Elon introduced it, he mentioned the word Dreadnought. Familiar? He previously named the Model Y’s fully automated production line Alien Dreadnought. If the Model 3 is not yet suitable for full automation, we can expect the revolutionary impact that the fully automated production line of the Model Y will have on the industry.The China Gigafactory could be Tesla’s and the entire automotive industry’s first factory with full automation capability for the four major car-making processes. Don’t forget Elon’s words: “Tesla’s long-term competitiveness is in factories and manufacturing capabilities, and many people haven’t realized this yet.”
As I said at the beginning, this is Elon’s home court and Tesla’s Spring Festival Gala. After last year’s shareholders’ meeting, Tesla’s market value surged to $60 billion. Both Wall Street and industry insiders are looking forward to Elon’s future blueprints, as a foreign media outlet said, “People expect to see how many more rabbits can be pulled out of the magician’s hat.”
Do you think that’s all the information from the shareholders’ meeting?
What surprised me was that this tough and straightforward steel-hard man who declared war on Tesla’s short-selling institutions several times even choked up when talking about Model 3’s production capacity…
“The past few months have been the most painful and difficult months I have ever experienced, but I believe we have finally done it.
At Tesla, we put our love into building cars.
In this industry, there are many companies that rely on marketing or finance departments to make cars, but they lack a soul.
We are not perfect, but we pour our hearts and souls into it. We care.”
“In recent months, there have been continuous outside queries about Tesla’s financial situation, production progress, and working environment. In order to achieve production targets, some employees have worked continuously for 60 days, and we had to force them to go home for a visit.”
The outside world only sees the Model 3’s increasing production capacity and its dominance in the same class car market. Who could have imagined the tremendous psychological pressure and abnormal workloads that Tesla has endured for the past few months, not only from top management but also from factory workers? The production capacity issue of Model 3 has even caused Elon, who has experienced the failure of Falcon rockets’ three launches in 2008 and Tesla’s verge of bankruptcy, to express his “most painful and difficult” feelings.
But if we broaden our perspective to the entire industry, traditional powerhouses with excellent performance and excellent workmanship in pure electric vehicles are already in sight. Too many people underestimate the high barriers in the automotive industry, which are not friendly to new forces.
Let us bless Tesla and the new Chinese car-making forces still in their infancy.
Finally, let’s settle down and take a look at the white Roadster with excellent appearance at the shareholders’ meeting.
None can resist it!
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.