Elon Musk warns Tesla is not immune to tough global economic situation

'I expect things to be just at a macroeconomic level difficult for at least the next 12 months,' chief executive says

New Tesla cars are displayed on the sales lot at a dealership in Colma, California. AFP

Tesla chief executive Elon Musk on Tuesday warned that the electric vehicle maker was not immune to global economic headwinds, with a difficult road ahead over the next 12 months.

At the company's annual shareholder meeting in Austin, Texas, Mr Musk spoke about car demand, beating out competitors in a slow economy and his decision to conduct a third-party audit of cobalt mines that supply Tesla with a key ingredient to make batteries.

In a sign of tough times for Tesla, the market leader in electric cars, Mr Musk said the company would try to advertise its vehicles, something it has never done before.

“Tesla is not immune to the global economic environment. I expect things to be just at a macroeconomic level difficult for at least the next 12 months,” he said.

At the meeting, shareholders voted to appoint the company's co-founder and former chief technology officer, JB Straubel, to the board.

Proxy advisory firm Glass Lewis had urged investors to vote against Mr Straubel's appointment, citing worries about his independence.

Mr Straubel is reportedly seen as a successor to Mr Musk but shareholders also rejected a proposal to publish a report that sought to establish succession plans.

The Tesla chief has been under pressure to address investor concerns about the lack of a clear successor, softening demand and delays of some new models, as well as his involvement in social media platform Twitter, which he bought in October.

“There was a short-term distraction because I had to do major open-heart surgery on Twitter to ensure the company's survival,” Mr Musk said on Tuesday.

Last week he announced that NBCUniversal's former advertising head, Linda Yaccarino, would succeed him as Twitter's chief executive and that he will focus on products and technology at the company.

In April, Mr Musk had said Tesla would prioritise sales growth over profit after it missed its margin target due to aggressive price cuts.

Mr Musk sent an email to staff on Monday in which he said the company could make no new hires unless he personally approves them, including contractors, and asked executives to “think carefully” before submitting hiring requests.

Tesla shareholders on Tuesday swiftly voted with the board's recommendations on nearly all proposals. The meeting was attended by shareholders who won invitations via lottery and was also live-streamed.

Tesla shares closed flat at $166.52 on Tuesday and rose 0.6 per cent in after-hours trading.

The stock has dropped about 60 per cent from its record high in November 2021, hurt by Mr Musk's distraction with Twitter and worries about softening demand for electric cars.

Reuters contributed to this report