Musk keeps firm grip on Tesla as shareholders get behind boss

Tesla CEO Elon Musk unveils the Roadster 2 during a presentation in Hawthorne California

The production lines have demonstrated the ability to make 3,500 Model 3 vehicles per week, Musk told investors in an annual shareholder meeting on Tuesday.

Shares fell as much as 7 per cent after Musk's snub, evaporating US$2 billion from Tesla's stock market value.

Tesla's board had recommended that shareholders re-elect all three board members, as well as reject a shareholder proposal that would have required the board chairman be an independent director.

The meeting also determined whether or not Kimbal Musk - Elon's brother - would remain with the company's board, alongside investor Antonio Gracias and Twenty-First Century Fox executive James Murdoch.

This was in spite of some stakeholders raising concern that a board with these directors lacked independence. One of the biggest things that came out of yesterday was Elon Musk said that for battery cells, they could be at below $100 per kilowatt-hour by the end of this year. He says the electric auto company will solve its Model 3 production problems.

The Model 3 has faced scrutiny from the auto industry, Wall Street and consumers practically since the first cars began shipping earlier this year. Investors have been skeptical that the company can turn a profit anytime soon, although Musk said the company would be profitable by the second half of 2018.

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Contrary to recent press reports asking if Tesla might be abandoning the mass market and what happened to the $35,000 Model 3, Musk assured investors Tesla has not given up on plans to manufacture the base-level version of the vehicle. He reiterated that the company will not need to raise money this year.

The shareholders he represents want Tesla to succeed, he said, "but the current board is an obstacle, not an aid, to these goals". Presumably, any independent chairman would significantly limit Musk's control over the company going forward.

"Model Y, for example, will not have any leather in it, including in the steering wheel - even if it does have a steering wheel", he said.

During a presentation, and more than an hour of questions, Musk seemed buoyant, at times overcome with emotions, as he ticked off the company's achievements: the Model 3's ranking as a top-selling premium sedan in the United States, installation of one gigawatt-hour of energy storage, the 2020 production plans for the Model Y and revamped Roadster. They also wanted CEO and chairman Musk's authority to be softened by taking away one of his titles. "I do have an issue with time", Musk said, according to Detroit News.

A battery factory in China, in addition to expanding production, could allow Tesla to avoid import tariffs there.

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