Tesla's Musk says 'quite likely' will meet Model 3 goal; directors re-elected

By Alexandria Sage and Noel Randewich

(Reuters) - Tesla Inc Chief Executive Elon Musk said on Tuesday that a goal of building 5,000 Model 3s per week by the end of June was "quite likely" as the company's production lines were now demonstrating the ability to build 3,500 vehicles per week.

"This is the most excruciating hellish several months I've ever had... but I think we're getting there," Musk said during Tesla's annual meeting of stockholders in Mountain View, California.

Musk's comments came after shareholders re-elected three directors and voted against a proposal to wrest the chairman role from Musk. That had represented the strongest challenge yet to Musk's grip on the Silicon Valley electric vehicle maker, which also faces production setbacks and expectations by many analysts that it will need to raise new cash.

 

One investor proposed splitting the chairman and chief executive jobs, both of which Musk holds, arguing the sprawling company has become difficult to oversee. Musk owns a 20 percent stake in the company.

Union-affiliated investment adviser CtW Investment Group had rallied shareholders to reject three Tesla directors it says lack qualifications or independence, including investor Antonio Gracias, Tesla's lead independent director; James Murdoch, the CEO of Twenty-First Century Fox Inc ; and sustainable food executive Kimbal Musk, Elon Musk's brother.

Proxy firms Glass Lewis and Institutional Shareholder Services (ISS) and activist investor CtW Investment Group had supported separating the chairman and CEO roles and mostly opposed the three directors, the only ones up for election this year.

Tesla had recommended shareholders leave Musk with both top jobs and argued the directors are qualified.

Tesla has been struggling to ramp up production of its new Model 3 sedan, which is crucial to the company's long-term profitability. Manufacturing bottlenecks have delayed the delivery of vehicles to customers and deferred much-needed revenue as the company continues to spend heavily on Model 3 production fixes, as well as projects in the pipeline.

Musk, who has insisted the company will not need to raise money this year, has also come under fire for his behaviour during an earnings conference call last month, in which he cut off analysts posing financial queries, rejecting them as "boring, bonehead questions." Shares fell as much as 7 percent after Musk's snub, evaporating $2 billion from Tesla's stock market value.

Shares of Tesla are down nearly 8 percent from the beginning of the year and down 25 percent from a year high of $389.61 in September.

(Reporting by Alexandria Sage and Noel Randewich in San Francisco; Editing by Lisa Shumaker)