Investors in Tesla asked CEO Elon Musk how the company plans to spend its money in the coming years, and about the company’s global economic prospects. This was asked at the Tesla 2022 shareholder meeting which was held on Thursday (5/8).
Elon Musk jokes that making macroeconomic forecasts is a recipe for disaster. But he still estimates that Tesla has passed the peak of inflation and is likely to see a relatively mild recession, which lasts for about 18 months.
This analysis is based on predictions of the raw materials needed to make electric vehicles.
“We’re getting a bit of a view of where the price of goods is going to move over time because when you make millions of cars, you have to buy commodities months in advance when they’re needed,” Musk said.
In the second quarter of 2022, Russia’s war on Ukraine and the ongoing Covid-19 pandemic in China hampered Tesla’s Shanghai factory, and exacerbated supply chain, parts shortages, and labor problems across the auto industry.
Musk was also asked how Tesla plans to use its capital in the coming years. He said Tesla would increase capital expenditures and research and development spending as soon as possible. He added that share buybacks are possible, depending on what Tesla’s future cash flows are like.
Musk, who is also CEO of SpaceX, said he was not yet willing to commit to a Tesla share buyback. However, he reiterated that if Tesla’s future cash flows look solid, and the world is “relatively stable”, then “share buybacks are on the table.”
Overall, Tesla aims to produce 20 million vehicles annually by 2030, a lofty goal, and Musk says he thinks this will require about a dozen factories, with each plant producing 1.5 million to 2 million units a year.
Tesla currently operates a vehicle assembly plant in Shanghai; Fremont, California; Austin, Texas; and outside Berlin in Germany. It also manufactures batteries at a factory in Sparks, Nevada, which is operated jointly with Panasonic.
Tesla recently produced its 3 millionth car and hopes to announce a new factory location later this year.