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article imageElon Musk wins vote of confidence from Tesla shareholders

By Karen Graham     Jun 6, 2018 in Business
Tesla stocks rose more than 4 percent in premarket trading after the company revealed it is nearing its Model 3 weekly production rate and shareholders at Tesla's annual meeting backed Elon Musk as chairman and CEO.
Tesla's profitability and Elon Musk's credibility are on the line after the Tesla CEO and Chairman of the Board made his case for the future of the Model 3 sedan at the Tuesday evening shareholders meeting in California.
Shareholders struck down a proposal that would have forced the company to split up its chairman and chief executive roles, both of which are currently held by Elon Musk. The meeting also struck down the proposal to remove three Tesla board members up for re-election this year.
Norway's $1 trillion wealth fund said on Wednesday it had backed an initiative to wrest the role of chairman away from Tesla CEO Musk. Norges Bank Investment Management (NBIM) had also voted against Musk's proposed pay package in March, which was valued by Tesla at $2.6 billion, even though the package was approved by shareholders.
Musk talks about the Model 3
Musk told shareholders the company was now churning out 500 of its Model 3 sedans a day and it is "extremely likely" Tesla will hit a production rate of 5,000 cars by the end of June.
Tesla's head of worldwide sales Robin Ren revealed that the company plans to build its first factory outside of the U.S. in Shanghai. The Chinese government recently announced that it will allow foreign electric vehicle makers to fully own auto-factories there.
And showing some of his trademark bravado, Musk said the electric car company will soon "produce more batteries at its massive Nevada Gigafactory than all other electric vehicle companies combined, including those in China." In short, Musk did everything he could to assure shareholders Tesla was going to be fine.
However, as The Street points out, "Tesla has to release numbers to back up Musk's latest claims." This means releasing updated second-quarter trends that would signal to the stock market that yes, Tesla does not need to raise capital to keep the company going by the end of the year. So basically, the ball is back in Musk's court.
As of 11:05 a.m. EDT, Tesla stocks had risen 5.37 percent to $307.12.
More about Tesla, shareholders meeting, Model 3, Production, Stocks
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