At Tesla’s (NASDAQ:TSLA) annual shareholder meeting held on Tuesday in Austin, Texas, CEO Elon Musk discussed various matters, including the possibility of the company trying advertising for its electric vehicles (EV).
“We’ll try a little advertising and see how it goes,” said Musk in response to a shareholder’s question. The leading EV maker has avoided traditional advertising all these years and has relied on word of mouth and non-conventional marketing. He said it was “ironic” that he now owns Twitter, the social media platform that is extensively dependent on ads.
In an interview with CNBC’s David Faber following Tesla’s annual meeting, Musk stated that he believes that ads should be informative, aesthetically pleasing, and beautiful, with some “artistic element.” Musk added that he just agreed to the idea of advertising and does not have a fully formed strategy yet.
Musk has long opposed the idea of advertising and tweeted in 2019 that he hated advertising. The change in his stance comes as the EV space has become more competitive. At the annual meeting, Musk said that many people are not aware of the affordability of Tesla cars, their “amazing” features, and their functionality.
Other Key Remarks
On the product front, Musk reaffirmed that Tesla will start deliveries of its much-delayed Cybertruck this year. The company expects to deliver 250,000 to 500,000 units per year once production commences.
He also spoke about two new products, claiming, “Both the design of the products and the manufacturing techniques are head and shoulders above anything else that is present in the industry.” Musk didn’t provide further details, saying it wasn’t the place to make a product announcement and that there would be a proper, dedicated launch. The Tesla CEO added that he expected to make over 5 million units of these two models combined.
At the meeting, the automaker also announced that co-founder and former chief technology officer JB Straubel would return to its board as an independent director. Straubel is the CEO of battery recycling and materials company Redwood Materials. It is worth noting that last month, proxy advisory firm Glass Lewis recommended Tesla shareholders vote against Straubel due to concerns about his independence.
Speaking about the macro situation, Musk cautioned about difficult conditions for the next 12 months and that Tesla is not immune to the global economic backdrop.
Musk also touched on investors’ frustration about his distraction due to the Twitter acquisition. He explained, “There was a short-term distraction because I had to do major open-heart surgery on Twitter to ensure the company’s survival.” Last week, he announced the appointment of NBCUniversal’s former advertising head, Linda Yaccarino, as Twitter’s new CEO. Musk intends to focus on products and technology at Twitter.
He said that Twitter is now in a “stable place” and assured that the amount of time that Twitter will take in the days ahead will be “relatively small” compared to the last six months.
Musk also dismissed rumors about him stepping down as the CEO of Tesla. “It ain’t so,” he replied when questioned by a shareholder.
Is Tesla a Good Stock to Buy?
Tesla’s first-quarter earnings declined due to its aggressive price cuts. Shares have fallen 10% over the past month but are still up 35% so far this year.
Wall Street’s Moderate Buy consensus rating on Tesla stock is based on 15 Buys, 11 Holds, and four Sells. The average price target of $202.84 suggests nearly 22% upside.
