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Explosive changes are afoot at Tesla, according to those who excel at reading the proverbial tea leaves, and Elon Musk is situated in the midst of this melee. Tesla’s board of directors is finally asserting its sizable influence, and it remains to be seen how Musk is able to navigate the churn ahead.

Later on Tuesday, Tesla will hold its much-anticipated annual shareholders’ meeting. A number of interesting developments have taken place just ahead of this seminal event, leading many to conclude that fireworks are in store for the upcoming meeting.

Last week, the Wall Street Journal published a post on Tesla’s CFO, Zack Kirkhorn. Billed as the “executive who keeps Tesla rolling,” Zach Kirkhorn was unabashedly promoted in the WSJ post as the most likely candidate to take over Tesla’s reigns should Elon Musk decide to step out of the limelight.

.@WSJ incase you missed it❗️

Elon isn’t stepping down from being the CEO of Tesla.

He will be devoting more time to @Tesla from now on.

Let that sink in❗️ pic.twitter.com/gwm8q5RdEO

— Eva McMillan ♥️ (@EvasTeslaSPlaid) May 12, 2023

Next, after announcing a new CEO of Twitter, Elon Musk confirmed that he would devote a greater proportion of his time to Tesla but sidestepped the question on the prospects of his continuing as the CEO at Tesla, as can be seen in the tweet snippet above.

Finally, Elon Musk has agreed to go live on CNBC after the meeting. This has led some to conclude that the CNBC interview could serve as a conduit to smooth out ruffled feathers, so to say.

Some Tesla Shareholders are not Happy

Tesla cut the prices of its EVs by an average of between 12 and 15 percent during the first quarter of 2023. These price cuts, however, provided only diminishing returns, with Tesla’s sequential deliveries managing to grow by only 6 percent and sequential automotive revenue falling by around 7 percent.

Source: Bloomberg

Recently, Tesla started to marginally increase the prices of its cars in a bid to combat the incentivization of delaying purchasing decisions on the part of the company’s customers. The snippet above recaps the changes to Tesla’s base EV models since the start of the year.

At a more granular level, the proxy advisor Glass Lewis has recommended that shareholders vote against inducting Tesla’s ex-CTO, JB Straubel, onto the company’s board of directors.

Moreover, a group of investors who collectively hold over $1.5 billion in Tesla shares have openly called on the board to ensure that “Tesla has a CEO that dedicates adequate time and attention to the company.” This is seen as a vote of non-confidence against Elon Musk’s leadership style.

What Happens at the Meeting?

What does this all mean?

1/ Maybe nothing - Perhaps $TSLA Board members trying to create paper trail in case they get sued for not protecting TSLA SH interests post Twitter.

2/ Board forced Elon’s hand - Potential deal where Elon continues to run product at Twitter and agrees…

— Gary Black (@garyblack00) May 16, 2023

As identified by Future Fund’s Gary Black in his tweet above, there are only three possible outcomes at tonight’s annual meeting of Tesla’s shareholders:

The recent grumbling from the board is only meant to act as a coverElon Musk hands over Tesla’s reigns to Zach KirkhornElon Musk recommits to Tesla’s overarching vision and retains his position as the EV giant’s CEO

Do note that Elon Musk sent a company-wide email recently, asking VPs to send him a “list of their department hiring requests once a week.” This return to micromanaging indicates that Elon Musk is about to go for option number three, which in the greater scheme of things, bodes well for Tesla’s shareholders.

Elon Musk still needs a ‘Twitter sitter’ to comply with SEC deal, court says https://t.co/gy7lxhSRhv

— MarketWatch (@MarketWatch) May 15, 2023

However, the pendulum might swing toward option number two as well. Yesterday, the Second US Circuit Court of Appeals in Manhattan turned down Elon Musk’s appeal to terminate the requirement of a designated “Twitter sitter” who is tasked with pre-approving Musk’s Tesla-related tweets, as mandated under a settlement with the SEC in 2018.

Moreover, the CEO of Tesla is being subpoenaed by the US Virgin Islands in connection with the ongoing lawsuit against JP Morgan and the deceased sex offender Jeffrey Epstein. This situation has the potential to tarnish the EV giant's optics. Coupled with Elon Musk’s political moves, the board might feel that the price of retaining the world’s richest person at the apex of the company might just be too dear to pay at this stage. Whatever the case, we would likely know a lot more on this topic in the hours ahead.