CEO Elon Musk says Tesla will need more factories

By Marco dell Cava, USA Today

With four electric vehicle models either on sale or in development, Tesla CEO Elon Musk said Tuesday that the growing brand may be required to build at least three and "possibly as many as 10 or 20" new factories to keep up with expected demand.

Tesla's first mid-priced car, the Model 3, is due to start deliveries later this year. At Tuesday's shareholders' meeting, Musk talked about the next vehicle in development, the Model Y, crossover, and predicted that it will see the highest demand of any Tesla when it arrives in 2019.

It's a bold prediction given the more than 400,000 reservations that Tesla has already taken for the Model 3. In addition, Tesla offers two current luxury vehicles, the Model S sedan and Model X crossover. Complicating production issues, the Model Y won't be built on the same chassis as the Model 3, he said.

The new Model 3 sedan is on schedule to start production later this summer. Consumers should expect a very basic ordering form. "It'll be simple," he said. "We offered too much with the Model X," which he called a "Faberge egg of cars, that likely could not, and should not, be built again."

Musk says the electric automaker's venture into electric trucks is on track, with a beta version expected to be revealed in September.

Musk said demand is strong, and the truck is being designed with customers' specific order parameters in mind. He hinted at more details to come: "Maybe there's a little more than we're saying here. Could be."

Musk took the time to tout his company's electric triple threat -- solar panels shaped like roof shingles, battery storage units and electric cars.

"It's a fully contained energy solution that could scale for the whole world," he said. "There's an island in American Samoa that is totally off the grid. And continents are really just very big islands. So you can do this with a continent."

Tesla's annual shareholder meeting Tuesday offered a touch of proxy drama that was largely overshadowed by CEO  Musk's presentation and Twitter question session.

As the meeting kicked off at the Computer History Museum not far from its Palo Alto headquarters, a representative for a variety of institutional investors, including California and Connecticut pension funds, urged shareholders to vote to elect Tesla board members annually, rather than in staggered three-year terms.

Proponents argue that such a move would boost accountability. Tesla counters that short terms discouraged board members from thinking about the big picture, something the company's CEO famously favors over short-term gains.

General Counsel Todd Maron said that shareholders voted to support Tesla's recommendations on the various proposals, including keeping the board seat terms as is. Musk told the assembled shareholders that he plans to announce two or three new members of the board "from a broad range of industries" in the coming months.

Musk was, as always, the focal point of the meeting. After being greeted by hoots and applause — "I love seeing you guys," he enthused — the rocket/solar/electric car pioneer went through a slideshow presentation that touched on the coming Model 3, the forthcoming Model Y and the mushrooming plans for future battery "Gigafactories," to use Tesla parlance.

A question did come up about accidents that have been reported out of Tesla's Fremont, Calif., manufacturing facility. Musk countered that the factory had a far better safety record than most U.S. automakers, and that having three shifts has made a difference on injuries, as has redesigning equipment to deal with repetitive stress injuries.

Musk was not asked about a lawsuit from a female Fremont plant worker who sued Tesla alleging incidents of workplace discrimination. Tesla countered that it had investigated the accusations made by A.J. Vandermeyden, 33, and found them to be without substance.

On Tuesday, Vandermeyden was fired, according to a report in Britain's The Guardian, which had originally reported her lawsuit. Vandermeyden's attorney, Therese Lawless, told the outlet that "they’ve just proven our case. It’s clear retaliation. Somebody is trying to instill in employees that when they speak out about matters they are legally allowed to speak out about, they too will be fired.”

Lawless did not immediately respond to a request for comment.

Tesla said in a statement to USA TODAY that the firing was justified, and suggested that Vandermeyden actually benefited from promotions during her four year career at Tesla for which she may not have been qualified.

"Despite having no engineering degree, (Vandermeyden) sought and was given successive engineering roles over more qualified candidates, beginning with her work in Tesla’s paint shop and eventually another role in General Assembly," Tesla said. "Ironically, even after she made complaints of alleged discrimination, she sought and was advanced into yet another role in the Purchasing department (her fifth opportunity at Tesla), again over other more qualified candidates.

"Nonetheless (she) chose to pursue a miscarriage of justice by suing Tesla and falsely attacking our company in the press. After we carefully considered the facts on multiple occasions and were absolutely convinced that Ms. Vandermeyden's claims were illegitimate, we had no choice but to end her employment at Tesla."