Commentary

As Tesla Trims Board, Elon Musk Banks On Autonomous Vehicles

Tesla announced Friday that it intended to trim its board of directors from 11 to seven members over the next couple of years so that it can “operate more nimbly and efficiently.” Meanwhile, Elon Musk is reportedly going to show off driverless technology to investors today that, if hype were reality, would see Tesla vehicles tooling around autonomously on freeways and boulevards by the end of next year.

Tesla said two directors plan to leave its board in June and two more intend to depart next year as part of a move to improve corporate governance of the electric car company. Brad Buss, a member of the board since 2009, and Linda Johnson Rice, who joined two years ago, have asked not to be re-elected when shareholders convene on June 11 for Tesla’s annual general meeting, the company said in a preliminary proxy statement,” Neal E. Boudette reports for the New York Times.

“Steve Jurvetson, who just returned from an extended leave of absence, will not seek re-election at the 2020 shareholders’ meeting, the proxy said; Antonio Gracias, a close associate of the chief executive, Elon Musk, intends to leave at the same time, a year before his term ends,” Boudette continues.

“Cautious Tesla investors have also been pleading for the company to tighten oversight of CEO Elon Musk. The disclosure comes just four months after Tesla added two new board members as part of a settlement deal that Musk and Tesla reached with the federal Securities and Exchange Commission,” Jackie Wattles writes  for CNN Business.

“The agency wanted Tesla to put stricter checks on Musk’s power after accusing him of misleading investors with his tweets about taking Tesla private. But their dispute is far from over: The SEC has since accused Musk of flouting other settlement terms and is looking to hold him in contempt.”

Meanwhile, “Musk, known for his swagger as well as his smarts, is so certain that Tesla will win the race toward full autonomy that he indicated in an interview earlier this month that his company’s cars should be able to navigate congested highways and city streets without a human behind the wheel by no later than next year,” the AP’s Michael Liedtke and Tom Krisher report in a story published on SFGate.

“‘I could be wrong, but it appears to be the case that Tesla is vastly ahead of everyone,’ Musk told Lex Fridman, a Massachusetts Institute of Technology research scientist specializing in autonomous vehicles. But experts say they're skeptical whether Tesla’s technology has advanced anywhere close to the point where its cars will be capable of being driven solely by a robot, without a human in position to take control if something goes awry.”

“It's all hype,” Steven E. Shladover, a retired research engineer at the University of California, Berkeley who has been involved in efforts to create autonomous driving for 45 years, tells Liedtke and Krisher. “The technology does not exist to do what he is claiming. He doesn't have it and neither does anybody else.”

A webcast of Tesla’s Autonomy Day will be live on YouTube starting at 11 a.m., Pacific. It’s scheduled two days before Tesla’s Q1 earnings will be announced. That news is not expected to be good. 

“The big question is how big is the quarterly loss,” is the headline above a MarketWatch preview published Saturday.

“The week’s twin billing encapsulates the polarizing nature of Tesla, which has sharply divided investors between skeptics and believers. Monday’s event will likely showcase Mr. Musk as the exuberant salesman pitching his futuristic vision for Tesla. First-quarter results, on the other hand, are backward looking by definition and could prompt a defense of operational struggles,” writes Tim Higgins for the Wall Street Journal.

“Some investors praised Tesla’s decision to highlight its driverless-car technology because they think it is a reason to value Tesla more highly than other auto makers. Those betting against the company said the investor day is a marketing stunt ahead of anticipated bad news.”

“I’ve seen this movie before,” David Kudla, CEO of Mainstay Capital Management, a short seller of Tesla stock, tells Higgins. “Whether it’s launching the Tesla into space, whether it’s some sort of product reveal or some grand announcement that comes a day or two before earnings.”

Speaking of Tesla, on Friday it obtained a restraining order against a short seller it claims “has been stalking its Fremont factory and harassing its employees,” Peter Blumberg writes for the Los Angeles Times.

Oh, and a video “time-stamped Sunday evening and widely shared on China’s Twitter-like Weibo,” shows a parked Tesla 3 “emit smoke and burst into flames seconds later,” Reuters’ Brenda Goh and Yilei Sun report.

Stay tuned. The work week hasn’t even dawned at Tesla’s Palo Alto headquarters.

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