Tesla Inc.’s eventful, nearly two-hour-long annual shareholder meeting late Tuesday seemingly had something for everyone, and Wall Street cheered it: Tesla’s stock was up nearly 4% on Wednesday. Here are the takeaways from the meeting:
Succession: ‘It ain’t so’
That was Chief Executive Elon Musk’s answer when he was asked about rumors he’d be stepping down from his post. Wedbush analyst Dan Ives said he believes Musk will stay on for another five years “as Tesla
TSLA,
navigates this next phase of its EV growth which we still view in the early innings.”
Cybertruck
Musk confirmed that the Cybertruck will be on sale this year, although he said the production rate would be slow at first. Musk conceded that the futuristic-looking all-electric pickup truck might not be to everyone’s taste but said “we will make as many as people want them.”
Advertising
Musk surprised shareholders by saying Tesla would advertise its products, which it has categorically refused to do for as long as it has been around.
It wasn’t exactly a firm commitment from the famously mercurial Musk, who said that “we will try advertising and see how it goes,” but Wall Street ran with it.
That’s a “major positive,” Wedbush’s Ives wrote, as “many parts of the Tesla product portfolio are undervalued by the Street.”
No advertising was the right strategy for Tesla in the past, but not as competition increases across the EV landscape, he said.
‘Special attention’ to JB Straubel’s election
Under some shareholder criticism, Tesla’s former chief technology officer, JB Straubel, was elected to the board, replacing Hiro Mizuno, who didn’t seek re-election. Pay special attention to that, Baird analyst Ben Kallo said.
Straubel departed Tesla in 2019 and went on to found a battery-recycling startup, the privately held Redwood Materials. Redwood is a “leader in materials recycling technology,” Kallo said.
“We view Straubel’s nomination to the [Tesla board] as a strategic addition that will further enhance [Tesla’s] technology leadership and speculate that it may be indicative of a future partnership in materials recycling,” the analyst said.
‘Leading the race’ in autonomous vehicles
Musk repeated some of his bullish comments about improvements in Tesla’s self-driving technology, reiterating that he believes Tesla will achieve full autonomy this year.
“While history has shown that Musk’s predictions should be taken with a grain of salt, we do think [Tesla] is leading the autonomous driving race and view the stock’s pullback since the end of [the first quarter] as a buying opportunity,” CFRA analyst Garrett Nelson said in a note.
Tesla shares are outperforming the broader equity index this year, up 40% , compared with the S&P 500’s
SPX,
gains of around 7%. In the past 12 months, however, Tesla has lost 32%, contrasting with gains of about 1% for the S&P 500.
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