NEW YORK (TheStreet) -- Tesla Motors (TSLA - Get Report) held its annual shareholder meeting on Tuesdayy, and one of the major takeaways was CEO Elon Musk talking about doing something "controversial" as it relates to Tesla's patents. There was much more to talk about though, including where the company's Gigafactory, the engine of Tesla's economic future, will be located.
Musk, who kicked off the meeting with a presentation, noted 2013 was a great year. "We've produced and sold a lot of cars," Musk said at the meeting, held in Mountain View, Calif. He noted there had been 344 million miles driven with Tesla cars, as the company expands it retail locations to 126 around the world, with 77 service centers and 114 Superchargers. Musk stated the company is "trying to accelerate the rollout of the Supercharger" network, and hopes to get to double that amount by the end of the year.
Aside from announcing that more software updates would be coming later this year, including buyers being able to name their cars, and more customization (where the car learns a driver's behavior), Musk stated the company is working hard to improve its mapping. It will use traffic-based directions, with the cars being able to anticipate the route a driver is taking as well as suggesting alternative routes using similar crowd-sourced intelligence that has been seen in Waze, a company that Google (GOOG) acquired late last year for $1 billion.
Dressed in a black suit with a white dress shirt, Musk continued to state that the company is supply-constrained, noting Tesla expects to deliver 35,000 Model S units this year. More could be done as the company works to get lithium-ion cell supply in line with demand.
"Sales have been pretty good, but there's room for improvement," Musk stated. Aside from the lithium-ion constraint, which the company hopes will resolve starting in the third quarter, the biggest constraints are opening up service centers and Superchargers, noting one particular problem in Norway, which has a unique electricity grid that took several months to get a working comfortable solution.
Though much of the hype surrounding Tesla is centered on the third-generation car, that car won't be possible without the Gigafactory, a place where Tesla and partners can produce lithium-ion cells and other parts to get economies of scale needed to reach the $35,000 price point Musk has been talking about for the past few years. He noted that Tesla may wind up breaking ground in three states for the Gigafactory, noting that he doesn't expect to know the final location for it by the end of the year. "It might actually be three states that we do it in," he said. "I would expect that we do a down-select for Gigafactory 1 before the end of the year."
Musk also pointed out that the company jokingly has trademarked Model E for the Gen III car, but with the Model S and Model X already out there, the marketing team may have trouble selling that. He also pointed out that Ford (F) was going to sue Tesla for using the Model E name, and Musk jokingly said that Ford was "killing sex."
Tesla has previously said that Arizona, Nevada, New Mexico, Texas and California are in the running for the Gigafactory, but recently stated in an investor call that due to regulatory issues California seemed less likely than the other states.
Panasonic, which works with Tesla on lithium-ion cell production, has signed a letter of intent with Tesla to partner on the Gigafactory, but Musk stated that Panasonic "wasn't sure at first whether the cost reductions could be achieved via the Gigafactory. Now they are."
Aside from the Gen III car, which will have a run of around 200 miles per charge, Musk touched on the upcoming sports-utility-vehicle, the Model X, noting that it looks different than the prototype seen. "It looks better," Musk said.
Despite the improvements made to the prototype, Tesla has come under some scrutiny for delaying the Model X, which is now expected to reach volume production in the second quarter of 2015. Musk noted that getting the falcon door correct is difficult, and the second row seats are quite a challenge. "When you open the falcon wing doors, the second row seats should be framed, like a work of art. We want the seat to feel like it should be in a museum. It's bloody hard."
He also touched on the agreement Tesla had with Toyota (TM) to provide battery packs and power trains for the Toyota Rav4. Musk said Toyota was interested in doing a high-volume deal for both components, but Palo Alto, Calif.-based Tesla was not in a position to help Toyota until the lithium-ion supply was better for Tesla. He noted the companies could circle back in a year or two on the agreement.
Though Musk has been lauded for all the work he's done with PayPal (which is a unit of eBay (EBAY)), Tesla and SpaceX, these gigs may be taking a toll on him, as Musk hinted he may eventually step down from Tesla.
"It was never my intention to be CEO," Musk said when asked about his future at Tesla. "I tried very hard to NOT be CEO, or the company wasn't going to make it." He stated that he's committed to being the CEO through the production of the third-generation car, so he would be CEO at least for the next four or five years. "Then see how things are going at that point."
Despite Musk intending to double the amount of Superchargers available for Model S drivers, he noted that he would not have a problem with other auto manufacturers, like Ford or GM using them, but they would have to create cars that can handle that level of power, noting there's 135 kWh production that comes from the Superchargers.
The Model S has received the far majority of attention from investors, drivers and the press, but Tesla got its start with the Roadster, a high-priced sports car. The company stopped making them a few years, but Musk said there would be a "fairly exciting upgrade" coming to the Roadster. "We'll get it done this year, it'll be a cool thing," Musk stated. He did caution that the next version of the Roadster was at least five years away.
-- Written by Chris Ciaccia in New York
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