Elon Musk CEO of Tesla and SpaceX, said on Monday that he wants about 25% of voting control over his electric vehicle business. As per Elon Musk, he would be uncomfortable growing AI/robotics at Tesla without at least a 25% voting control of the company. Musk already owns around 13% of Tesla, or approximately 411 million shares of the company’s 3.19 billion shares in common stock outstanding.
This was as reported in the company’s last financial filing for the third quarter of 2023, this making him Tesla largest shareholder. That’s a large stake, especially considering that Musk sold tens of billions of dollars worth of his shares in Tesla in 2022, largely to finance a $44 billion leveraged buyout of Twitter.
Tesla voting control for AI and robot
Now, Musk is angling for even more voting control over Tesla.
Specifically, Musk wrote on Monday, “I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned.”
“Unless that is the case, I would prefer to build products outside of Tesla,” the billionaire executive said on X.
“You don’t seem to understand that Tesla is not one startup, but a dozen.
In a separate post, he said he would be fine with a dual class voting structure to achieve his goal of getting 25% voting control for Tesla, but was told it was impossible after the initial public offering in Delaware.
Tesla did not immediately respond to a request for comment.
Tesla AI and robotics company
Musk’s post stood at odds with remarks he previously made suggesting Tesla is already an important AI and robotics company, and its value hinges on its prowess in these domains.
In April 2022, Musk predicted during Tesla’s first-quarter earnings call that the company’s humanoid robot, Optimus, “ultimately will be worth more than the car business and worth more than full self-driving.”
Tesla unveiled an early Optimus prototype at Tesla AI Day in September that year.
Importance of automotive segment
While Tesla’s last annual or 10-K filing showed that around 95% of its revenue came from its “automotive” segment in 2022, in its third-quarter 2023 financial filing, the company described its business as “increasingly focused on products and services based on artificial intelligence, robotics and automation.”
Even on Monday morning, Musk posted a video clip on X showing the Tesla Optimus robot in development folding laundry at a table, although the robot was remote-operated and not autonomous.
Musk’s wish to control even more of Tesla will undoubtedly add to the pressure on Tesla’s board of directors in 2024.
The reason for his call for 25% voting control in Tesla, he said: “If I have 25%, it means I am influential, but can be overridden if twice as many shareholders vote against me vs for me. At 15% or lower, the for/against ratio to override me makes a takeover by dubious interests too easy.”
Delaware trial
Musk who is in the midst of a trial in Delaware over his earlier $56 billion pay package from Tesla. The unparalleled 2018 CEO compensation plan made Musk into one of the richest people on the planet.
Shareholders previously sued Musk and Tesla in Delaware alleging that Musk’s earlier, 2018 pay package was excessive, and the board authorizing it amounted to a breach of fiduciary duty.
In an earlier trial in Delaware, several Tesla board members agreed last year to pay back $735 million to the company in a settlement agreement over their own director compensation.
Hertz selling Tesla
Another blow to Tesla earlier this week when Hertz the rental car company came out with the plan of selling Teslas for as little as $21,000.
Tesla price cut has made it increasingly affordable, putting pressure on the used car segment.
