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Elon Musk says in court that he doesn’t want to be CEO of any company and tries to walk back SEC insults

Source image: https://www.cnbc.com/2022/11/16/elon-musk-says-he-doesnt-want-to-be-a-ceo-walks-back-sec-insults.html

Tesla Inc CEO Elon Musk attends the World Artificial Intelligence Conference (WAIC) in Shanghai, China August 29, 2019.

Aly Song | Reuters

Elon Musk said in court Wednesday that he does not want to be the CEO of any company.

He recently acquired social media giant Twitter and appointed himself as the CEO, adding to his responsibilities as the CEO and “technoking” of electric vehicle maker Tesla, and CEO and CTO of the U.S. defense contractor SpaceX.

Musk also confirmed that the arrangement at Twitter is temporary. “I expect to reduce my time at Twitter and find somebody else to run Twitter over time,” he said. 

Musk and Tesla are in the midst of a trial in Delaware over the 2018 CEO pay package the company granted him, an unparalleled compensation plan that has made Musk a centi-billionaire and the richest person on the planet.

Shareholder Richard J. Tornetta has sued Musk and Tesla alleging that the CEO compensation was excessive and that its authorization by the Tesla board amounted to a breach of its fiduciary duty.

Elon Musk says Twitter Blue to relaunch on Nov. 29

Musk explained during the testimony that CEO is not necessarily an apt description for the work he says he does at his companies.

“At SpaceX it’s really that I’m responsible for the engineering of the rockets and Tesla for the technology in the car that makes it successful,” Musk said. “So, CEO is often viewed as somewhat of a business-focused role but in reality, my role is much more that of an engineer developing technology and making sure that we develop breakthrough technologies and that we have a team of incredible engineers who can achieve those goals.”

He also said, “It’s my experience that great engineers will only work for a great engineer. That is my first duty, not that of CEO.”

Attorneys for Tornetta asked Musk about a CNBC report that he had authorized at least 50 Tesla employees, mostly Autopilot engineers, to help with his work at Twitter, now that he owns the social media company.

Musk said he only called on Tesla employees to assist him at Twitter on a “voluntary basis” and to work “after hours” at Twitter. He said that no Tesla board member had called him to say it is not a good idea to use Tesla resources for one of his other, privately held companies.

“This was an after hours — just if you’re interested in evaluating, helping me evaluate Twitter engineering … that’d be nice. I think it lasted for a few days and it was over.”

When a lawyer asked if he thought it was a good idea to be using Tesla assets at Twitter, Musk responded, “I didn’t think of this as using Tesla assets.” He added, “There’s 120,000 people at the company. This is de minimis.”

With all his business commitments, Tesla has taken more of his time than anything in recent years, Musk said during the testimony.

Attorneys for the plaintiffs asked whether it was a good idea for Musk to strike a combative attitude towards regulators and specifically asked him about prior insults he lobbed at the Securities and Exchange Commission.

“In general, I think the mission of the SEC is good but the question is whether that mission is being executed well,” he replied.

“In some cases I think it is not. The SEC fails to investigate things that they should and places far too much attention on things that are not relevant. The recent FTX thing I think is an example of that. Why was there no attention given to FTX? Investors lost billions. Yet the SEC continues to hound me despite shareholders being greatly rewarded. This makes no sense.”

In fact, the SEC and several other regulators have reportedly launched investigations into collapsed crypto firm FTX, but it’s not clear if those investigations started prior to the firm’s sudden bankruptcy last week.

What ‘SEC’ stands for

The SEC had charged Tesla and Musk for making “false and misleading” statements to shareholders when Musk said in tweets on Aug. 7, 2018, that he was thinking of taking the automaker private at $420 a share and had “funding secured.”

The price of Tesla shares jumped by over 6% after Musk’s tweets, and trading was halted the same day. Tesla shares remained volatile for weeks after the incident.

As part of a settlement agreement, Tesla and Musk agreed to pay a $20 million fine, Musk had to give up his role as chairman at Tesla for three years and agreed not to claim innocence or deny the SEC’s allegations. Musk and Tesla also committed to have the CEO’s tweets vetted by a securities lawyer before posting them if they contained material business information that could effect Tesla’s share price.

Tornetta’s lawyers asked Musk if he had a securities lawyer review all his tweets about Tesla and why he had been claiming innocence including in press interviews. Musk seemed to acknowledge that he doesn’t run all of his Tesla-related tweets by a lawyer first.

And he said, “The consent decree was made under duress. An agreement made under duress is not valid, as a foundation of law.”

At a time when Tesla shares were on a massive upswing, Musk had written in a tweet on July 2, 2020: “SEC, three letter acronym, middle word is Elon’s.” The message was widely read as having a vulgar meaning and comprising a major insult to the agency.

On Wednesday in the Delaware court, attorneys asked him about this tweet and Musk claimed it had been widely misunderstood. The Tesla CEO said in court that he meant the initials to stand for “Save Elon’s Company” but the tweet was “interpreted differently.”

Source: https://www.cnbc.com/2022/11/16/elon-musk-says-he-doesnt-want-to-be-a-ceo-walks-back-sec-insults.html

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Two children and two adults survive after Tesla plunges 250 feet off California cliff

View from the helicopter during a rescue operation after a vehicle carrying two adults and two children went over a cliff in Devil’s Slide, San Mateo county, California, U.S., January 2, 2023, plunging hundreds of feet, according to the Department of Forestry and Fire Protection, in this still image obtained from social media video.

CHP – Golden Gate Division | Reuters

Two adults and two children were rescued from a Tesla that plunged 250 feet off a cliff Monday morning in San Mateo County, California, officials said. 

The car was traveling southbound on the Pacific Coast Highway when it went over the cliff at Devil’s Slide, south of the Tom Lantos tunnel, and landed near the water’s edge below, the Cal Fire San Mateo-Santa Cruz Unit said. 

The car flipped and landed on its wheels in the fall, CAL FIRE/Coastside Fire Incident Commander Brian Pottenger said. Witnesses saw the accident and called 911. 

As crews were lowered down, they were able to see movement in the front seat, through their binoculars, meaning someone was alive.

“We were actually very shocked when we found survivable victims in the vehicle. So, that actually was a really hopeful moment for us,” Pottenger said. 

Fire officials called for helicopters to help hoist the survivors to safety. As they waited, firefighters rappelled to the scene and rescued the two children.

Rescue teams are seen at the scene as a Tesla with four occupants plunged over a cliff on Pacific Coast Highway 1 at Devils Slide on January 2, 2022 in San Mateo County, California, United States.

Tayfun Coskun | Anadolu Agency | Getty Images

The California Highway Patrol shared video on social media showing helicopters lower first responders to the scene to extricate and rescue two adults inside. 

All four were hospitalized. The San Mateo Sheriff’s Office said the two adults suffered non-life-threatening injuries and the two children were unharmed.

It’s not clear what caused the car to go over the cliff. CHP is handling the investigation. 

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Tesla shares tumble more than 10% following deliveries report

Tesla vehicles are shown at a sales and service center in Vista, California, June 3, 2022.

Mike Blake | Reuters

Shares of Tesla dropped 13% on Tuesday morning, a day after the electric auto maker reported fourth-quarter vehicle production and delivery numbers for 2022.

Deliveries are the closest approximation of sales disclosed by Tesla. The company reported 405,278 total deliveries for the quarter and 1.31 million total deliveries for the year. These numbers represented a record for the Elon Musk-led automaker and growth of 40% in deliveries year over year, but they fell shy of analysts’ expectations.

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Some analysts see a buying opportunity in Tesla for 2023 despite persistent demand pressures

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According to a consensus of analysts’ estimates compiled by FactSet, as of Dec. 31, 2022, Wall Street was expecting Tesla to report around 427,000 deliveries for the final quarter of the year. Estimates updated in December, and included in the FactSet consensus, ranged from 409,000 to 433,000.

Those more recent estimates were in line with a company-compiled consensus distributed by Tesla investor relations Vice President Martin Viecha. 

Some Wall Street analysts think Tesla’s deliveries miss spells trouble for the electric vehicle maker, but others see a buying opportunity for the company in 2023.

Baird analyst Ben Kallo, who recently named Tesla a top pick for 2023, maintained an outperform rating and said he would remain a buyer of the stock ahead of the company’s earnings report, which is scheduled for Jan. 25.

“Q4 deliveries missed consensus but beat our estimates,” he said in a Tuesday note. “Importantly, production increased ~20% q/q which we expect to continue into 2023 as gigafactories in Berlin and Austin continue to ramp.”

Analysts at Goldman Sachs said they consider the delivery report to be an “incremental negative,” and view Tesla as a company that is “well positioned for long-term growth.” Goldman reiterated its buy rating on the stock in a Monday note and said that making vehicles more affordable in a challenging macroeconomic environment will be a “key driver of growth.”

“We believe key debates from here will be on whether vehicle deliveries can reaccelerate, margins and Tesla’s brand,” the analysts said.

Shares of Tesla suffered an extreme yearlong sell-off in 2022, prompting CEO Musk to tell employees in late December not to be “too bothered by stock market craziness.”

Musk has blamed Tesla’s declining share price in part on rising interest rates. But critics point to his rocky $44 billion Twitter takeover as a bigger culprit for the slide.

Morgan Stanley analysts said they think the company’s share price weakness is a “window of opportunity to buy.”

“Between a worsening macro backdrop, record high unaffordability, and increasing competition, there are hurdles for all auto companies to overcome in the year ahead,” they said in a note Tuesday. “However, within this backdrop we believe TSLA has the potential to widen its lead in the EV race, as it leverages its cost and scale advantages to further itself from the competition.”

CNBC’s Lora Kolodny and Michael Bloom contributed to this report.

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Tesla makes China boss Tom Zhu its highest-profile executive after Elon Musk

Tom Zhu Xiaotong, Tesla’s current executive in charge of China, speaks as a new Tesla experience store opens on Aug. 18, 2015 in Hangzhou, China.

Visual China Group | Getty Images

Tesla’s China chief Tom Zhu has been promoted to take direct oversight of the electric carmaker’s U.S. assembly plants as well as sales operations in North America and Europe, according to an internal posting of reporting lines reviewed by Reuters.

The Tesla posting showed that Zhu’s title of vice president for Greater China had not changed and that he also retained his responsibilities as Tesla’s most senior executive for sales in the rest of Asia as of Tuesday.

The move makes Zhu the highest-profile executive at Tesla after Chief Executive Elon Musk, with direct oversight for deliveries in all of its major markets and operations of its key production hubs.

The reporting lines for Zhu would keep Tesla’s vehicle design and development — both areas where Musk has been heavily involved — separate while creating an apparent deputy to Musk on the more near-term challenges of managing global sales and output.

Tesla did not immediately respond to a Reuters request for comment.

Reuters reviewed the organizational chart that had been posted internally by Tesla and confirmed the change with two people who had seen it. They asked not to be named because they were not authorized to discuss the matter.

Elon Musk needs to go back to Tesla and have others run Twitter, says Jim Cramer

Zhu and a team of his reports were brought in by Tesla late last year to troubleshoot production issues in the United States, driving an expectation among his colleagues then that he was being groomed for a bigger role.

Zhu’s appointment to a global role comes at a time when Musk has been distracted by his acquisition of Twitter and Tesla analysts and investors have urged action that would deepen the senior executive bench and allow him to focus on Tesla.

Under Zhu, Tesla’s Shanghai plant rebounded strongly from Covid lockdowns in China.

Tesla said on Monday that it had delivered 405,278 vehicles in the fourth quarter, short of Wall Street estimates, according to data compiled by Refinitiv.

The company had delivered 308,600 vehicles in the same period a year earlier.

The Tesla managers reporting to Zhu include: Jason Shawhan, director of manufacturing at the Gigafactory in Texas; Hrushikesh Sagar, senior director of manufacturing at Tesla’s Fremont factory; Joe Ward, vice president in charge of Europe, the Middle East and Africa; and Troy Jones, vice president of North America sales and service, according to the Tesla notice on reporting lines reviewed by Reuters.

Tesla country managers in China, Japan, Australia and New Zealand continued to report to Zhu, the notice showed.

Zhu does not have a direct report at Tesla’s still-ramping Berlin plant, but a person with knowledge of the matter said responsibility for that operation would come with the reporting line for Amsterdam-based Ward. Ward could not be immediately reached for comment.

Zhu, who was born in China but now holds a New Zealand passport, joined Tesla in 2014. Before that he was a project manager at a company established by his MBA classmates at Duke University, advising Chinese contractors working on infrastructure projects in Africa.

During Shanghai’s two-month Covid lockdown, Zhu was among the first batch of employees sleeping in the factory as they sought to keep it running, people who work with him have said.

Zhu, a no-fuss manager who sports a buzz cut, favors Tesla-branded fleece jackets and has lived in a government-subsidized apartment that is a 10-minute drive from the Shanghai Gigafactory. It was not immediately clear whether he would move after his promotion.

He takes charge of Tesla’s main production hubs at a time when the company is readying the launch of Cybertruck and a revamped version of its Model 3 sedan. Tesla has also said it is developing a cheaper electric vehicle but has not provided details on that plan.

When Tesla posted a picture on Twitter last month to celebrate its Austin, Texas, plant hitting a production milestone for its Model Y, Zhu was among hundreds of workers smiling on the factory floor.

Why China is beating the U.S. in electric vehicles

Allan Wang, who was promoted to vice president in charge of sales in China in July, was listed as the legal representative for the operation in registration papers filed with Chinese regulators in a change by the company last month.

Tesla board member James Murdoch said in November the company had recently identified a potential successor to Musk without naming the person. Murdoch did not respond to a request for comment.

Electrek previously reported that Zhu would take responsibility for U.S. sales, delivery and service.

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