Text size
Sean Gallup/Getty Images
Electric-vehicle pioneer Tesla is moving its headquarters to Austin, Texas, from Silicon Valley, saying that land prices in California limited its growth there.
The car maker hosted its annual meeting Thursday in Austin, at its new car-making facility. Shareholders soon learned it wants to do more in Austin than just make cars.
Annual meetings can be boring. That isn’t a word typically associated with Tesla (ticker: TSLA), though. This meeting didn’t disappoint. Besides the big news on the move, it held some interesting tidbits for Tesla bulls and bears.
Here are six things Barron’s noted.
Tesla’s board of directors will remain a family affair.
The first potential drama from the meeting dealt with CEO Elon Musk’s brother Kimbal. Shareholder services firm ISS recommended Tesla investors vote against Kimbal Musk’s re-election to the board of directors. The proxy advisor had an issue with how Tesla arrived at his board compensation. Shareholders, however, didn’t listen, and Kimbal Musk will continue serving as a director.
Another notable outcome from regular business dealt with employee relations. Several shareholder proposals dealing with employee representation and arbitration were voted down. Shareholder proposals getting voted down isn’t a surprise. But employee relations has become a watch item for Tesla investors after a judge awarded a former worker $137 million for facing racial abuse that he says Tesla ignored. Tesla said it was responsive to the employee’s complaints.
Tesla knows competition is coming.
“You’ll see all manufacturers will make electric vehicles,” said Musk early in his prepared remarks. “Eventually, all manufacturers will make autonomous vehicles.”
Musk plans to compete by being better at manufacturing and at software needed for more advanced driving features. What’s more, Tesla is open to licensing its autonomous driving technology to other car makers. Musk doesn’t believe Tesla should be the only one with autonomous-driving features.
Many other auto makers, of course, have their own autonomous-driving platforms.
General Motors
(GM) introduced its most advanced system, called Ultra Cruise, on Wednesday.
More batteries are needed.
Musk had an upbeat message for battery suppliers: “As many cells you want to make and supply to us at an affordable price, we will buy,” he said. “Want to increase 100%, sounds good to me.”
It isn’t all about cars. Tesla also need batteries for stationary power products such as power wall and utility scale “mega packs.” Musk believes battery demand for stationary power will eventually be as high as demand for car batteries.
Tesla is good at math.
Tesla calculates 200 square miles of solar panels and one square mile of batteries is enough to power the entire U.S. That math, frankly, is an odd way to express the needs. It’s hard for investors to digest. Still, it illustrates the opportunity Musk is building his company on.
Tesla HQ is moving to Texas.
After the regular business was concluded, Musk took the stage and unveiled the shocker about the move to Austin.
Musk was careful to point out that Tesla isn’t leaving California, but he added that there is a limit to how large his organization can grow there because of land prices.
Don’t count on the stock rising Friday.
Tesla annual meetings frequently spark big price movements—in both directions. The stock dropped 10% after the 2020 annual meeting. Shares fell 3.6% after the June 2019 annual meeting. Tesla stock rose 9.7% after the June 2018 annual meeting. The safest bet might be a volatile day of trading Friday for Tesla shares.
Tesla stock has been strong lately. Shares are up about 5.4% over the past month. The stock rose 1.4% in Thursday trading. The
S&P 500
and
Dow Jones Industrial Average
added 0.8% and 1%, respectively.
Tesla stock is down 1.2% in midday trading Friday. The S&P 500 is flat.
Write to Al Root at allen.root@dowjones.com