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Billionaire Elon Musk wants more control over his car company Tesla. The company is investing in side projects, but Musk is threatening to stop running them under Tesla. Meanwhile, other investors are losing track of the direction the automaker is taking.

In related news, Musk would like to get his hands on 25 percent of Tesla shares before investing.

  • With 12 percent of the shares, Musk is now the main shareholder, but the businessman does not think that is comfortable enough. In a post on X, he revealed that he is "not comfortable growing Tesla into a leader in AI and robotics without having about 25 percent control of the votes."
  • Indeed, Musk is facing opposition. A $55 billion investment package is being blocked by a shareholder. So according to Musk, that's a simple fix: "If I have 25 percent, it means I am influential, but can be dominated if twice as many shareholders vote against me than for me."
    • "At 15 percent or lower, the ratio of for and against to nullify me makes a takeover by questionable interests too easy," the top executive said.
  • In his post, he also threatened not to pursue projects within Tesla until he owns 25 percent.
    • Under Elon Musk, the car company is investing heavily in artificial intelligence (AI) and robotics: these include the Optimus robot, a human figure; and the Dojo project in which computers are trained to drive autonomously. In the latter project, Tesla is investing more than a billion dollars.
    • After all, Tesla is not one startup around cars, but several, Musk believes. So he called Tesla in 2021 "perhaps the leader in AI in the real world."

Problems for Tesla pile up

The problem: Shareholders no longer know exactly what Tesla is.

  • Tesla shareholders are dissatisfied with Musk's leadership. Complaints vary widely:
    • No clear succession plan.
    • Musk allegedly distracted from his work because he is too concerned with X.
    • The fact that Musk sold Tesla shares to finance his purchase of Twitter/X.
    • Various controversies surrounding drug use.
    • The question of whether all sorts of side projects are distracting from producing cars.
  • Daniel Kollar, head of the automotive division of consulting firm Intralink, put it this way, "What is Tesla? An auto, energy or AI company? If it's not an AI company, then I see no problem in creating a new company."
  • But, he added to Bloomberg finely added: "That said, I don't see how Musk's behavior or language benefits any of his companies."

The Bigger Picture: Two additional problems.

  • Car rental company Hertz will swap electric vehicles, including many Tesla's, back to gasoline cars.
  • Tesla must largely shut down vehicle production at its Berlin plant due to the Red Sea conflict.

(evb)

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