Thu, Jun 07, 2018 - Page 10 News List

Musk to stay Tesla chair after supermajority vote

AP, SAN FRANCISCO

Tesla Inc chief executive officer Elon Musk has rebuffed a shareholder attempt to overhaul the electric car maker’s board and strip him of his role as chairman, despite worries about the company’s shaky finances and inability to meet its production goals for its first mass-market sedan.

All three directors seeking to remain on Tesla’s nine-member board were re-elected during the company’s annual meeting on Tuesday in Mountain View, California.

Directors Antonio Gracias, James Murdoch and Elon Musk’s brother, Kimbal Musk, won by “a wide margin,” Tesla said.

A “supermajority” of shareholders also rejected a proposal to force Elon Musk to step down as chairman, a position he has held since 2004 — four years before he also assumed the CEO job, the company said.

Elon Musk holds a 22 percent stake in Tesla, increasing the degree of difficulty for shareholders trying to challenge his authority.

PROFIT ASSURANCE

After the results were announced, he sought to reassure shareholders attending the meeting and others watching online.

After describing the past few months as among the most “hellish” in his life, Elon Musk said that he expects Tesla to post a quarterly profit during the July-to-September period.

That is something the company has rarely pulled off in a 15-year history marked by steady losses while investing heavily in its technology and manufacturing plants.

After conceding that “staying alive” is difficult in the auto industry, Elon Musk told shareholders that Tesla would be “cash flow positive” during the second half of this year.

If he is correct, the prediction would translate into Tesla bringing in more cash than it is spending in both the third and fourth quarters.

To do that, Tesla would probably have to meet Elon Musk’s manufacturing goals for its Model 3, a sedan with a starting price tag of US$35,000 that represents the company’s attempt to reach a mass market.

Tesla still needs to more than double its production rate to reach Elon Musk’s target of delivering 5,000 Model 3s per week.

Elon Musk reiterated previous predictions that it would happen during the second half of this year.

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