Tesla hosted its annual shareholder meeting today. Here are our takeaways:

1. Musk was calm, confident, and articulate in a way that we haven’t seen in his last several public appearances. He was less combative and more measured in his remarks about Tesla’s roadmap, even admitting, “I’m often too optimistic about time frames.” We heard fewer hyperboles and more transparent answers to shareholder questions than we have come to expect. At the risk of overanalyzing the event, we see this as a positive sign for the company’s performance. In the past, when Tesla has been struggling, Musk has been visibly troubled himself, and we didn’t see that today.
2. Elon reiterated that “there is not a demand problem,” and predicted that deliveries for Jun-19 will be near a record. This implies ~91k deliveries, which is above investor expectations of 75-80k vehicles. We believe Tesla will reiterate their target of 360-400k deliveries in 2019 on the next earnings call.
3. While demand commentary will likely be upbeat, investors will continue their wait and see posture. This is due in part to the history of missing guidance, but also because much of the optimism around demand is based on historical sales numbers. While Model 3 continues its impressive sales track, it is unclear how much of the demand is from pent up early adopters and what true baseline demand will be long-term.
4. Shanghai is on track to produce vehicles late this year or early next year. This will eliminate tariffs that Chinese consumers are currently bearing on Tesla vehicles, which Musk said have ranged from 15% to 40%. As a reminder, China is the world’s largest EV market, and Tesla vehicles, as they do in the US, still stand head and shoulders above competitors.
5. Musk is taking a more realistic stance on the timing of full autonomy. Previously, he had suggested full self-driving would be available within a year pending regulatory approval. At today’s shareholder meeting, he adopted more conservative language, saying that drivers would still need to “supervise” autopilot and was altogether less emphatic about the usual narrative that you will be able to fall asleep in your Tesla in the coming years.

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