Moderator Note: This thread started in the Investors Forum, discussing two shareholder resolutions up for vote at the annual meeting. Following the meeting, the thread continued on to debate the ethical and environmental impacts of Tesla's choice of interior materials. Given the shift in emphasis, the moderator team decided that the Energy, Environment, and Policy forum was a better location for this continuing discussion.
____________________________________________________
Dear Fellow Investors,
It is with some trepidation that we ask for your assistance in securing your "FOR" votes on 2015 TSLA Proposals Three and Four, but it must be done. In the past, forum "debate" on this subject has degraded to irrational, grade school-like ad hominem attacks; let's hope that's no longer the case.
Both proposals will be "presented" at the June 9th Annual Shareholder's Meeting, but Tesla has given us a full THREE minutes each; that's not much presentation. Frankly, it smacks of, "Our minds are made up, please don't bother us with the facts."
Furthermore, it's a mere formality at that point since the vast majority of the votes will have already been cast by June 9th, this despite the significant roadblocks to actually seeing the proposals. Thus, nearly all shareholders will see nothing more than the board recommendation to vote "AGAINST," and not see a single word from either proposal. (In our case, no hard copies of the Tesla Motors Annual Report were mailed, unless specifically requested. This was in direct contrast to previous years where the default option had hard copies of the annual reports mailed, unless specifically not asked for. We'll presume your experience this year was similar?)
Adding salt to the wound, Tesla's Board has stated what must be the Tesla equivalent of, "The dog ate my homework," as their reasoning for their "AGAINST" recommendation. Frankly, in light of the facts, that's remarkably "un-Tesla" as they are normally a fact- and logic-based organization.
Hence, our request: please review the proposals below and vote "FOR" both. The SEC limit of 500 words severely limits the number of facts that could be included in the proposals, but please see the hyperlinks below for more details.
At the end of the day, Tesla Motors exists to transition ground-based transportation from a high-GHG output problem that threatens all life on Earth to something that's sustainable. As Elon explained in March, the status quo is, "The dumbest experiment in history..." He's right.
Elon Musk: Burning Fossil Fuels Is the 'Dumbest Experiment in History, By Far' | Motherboard
In the past Elon has used the metaphor of a leaking lifeboat and a bucket. I'll use it again. If we're trying to bail water out of the lifeboat, why would anyone intentionally poke holes in the bailing bucket? Yet with arguably 80 or 90% of the Model S's sold today, that's exactly what Tesla is doing . . . .
And that is what's really insane.
Thanks for your support--we're going to need it!
Sincerely,
Mark and Elizabeth Peters
"The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man."
--George Bernard Shaw
p.s. For additional information, please see:
Livestock a major threat to environment
http://www.cowspiracy.com/facts
And, for those that think the status quo is "natural," please click through these links:
Watch Video at TEDxTalks
http://www.adaptt.org/Mills The Comparative Anatomy of Eating1.pdf
(BTW, Dr. Milton Mills is a Stanford Medical School graduate.)
NutritionFacts.org | The Latest in Nutrition Related Research
************************************
PROPOSAL THREE
STOCKHOLDER PROPOSAL BY MR. MARK PETERS
Stockholder Proposal and Supporting Statement
In accordance with SEC rules, we have set forth below a stockholder proposal from Mark Peters, along with a supporting statement of the proponent. Mr. Peters has notified us that he is the beneficial owner of 1,540 shares of the Company’s common stock and intends to present the following proposal at the 2015 Annual Meeting. The stockholder proposal will be required to be voted upon at the 2015 Annual Meeting only if properly presented.
Shareholder Proposal — Reduced Environmental Impact
Tesla Motors (TM) was created, in part, to address the significant environmental impact inherent in fossil-fuel powered transportation. While the Company seeks environmentally sustainable solutions, TM has made choices which conflict with these goals.
This proposal highlights the significant negative environmental impact of using animal-sourced products in TM’s products, and suggests TM minimize and then eliminate their use.
Negative Environmental Impact
In 2006 the UN Food and Agriculture Organization reported:
With rising temperatures, rising sea levels, melting icecaps and glaciers, shifting ocean currents and weather patterns, climate change is the most serious challenge facing the human race.
The livestock sector is a major player, responsible for 18 percent of greenhouse gas emissions measured in C02 equivalent. This is a higher share than transport.
[ftp.fao.org/docrep/fao/010/a0701e/a0701eOO.pdf]
This has also been supported in other research and was highlighted in the 2014 documentary, Cowspiracy .
Consumer Acceptance of Alternatives
Daimler AG, an early TM investor, has demonstrated high customer acceptance of the comfort, appearance, and durability of non-animal sourced interiors. The non-profit Consumer Reports, which accepts no advertising and anonymously purchases their test vehicles, stated the following in reviewing the 2014 Mercedes-Benz E-Class:
Expectations are high for a Mercedes interior and this one doesn’t disappoint. Almost every dashboard and door panel surface is covered with soft-touch materials. Swaths of wood encircle the interior and run down the center console. Lots of chrome bits liven up the cabin as does a fancy analog clock in the center dashboard. The faux leather perforated MB-Tex seats are convincing.
[http://www.consumerreports.org/cro/mercedes-benz/e-class/sedan-e250-bluetec-4-cyl/road-test.htm]
Their review of the 2015 C-Class was similar:
Inside you’ll find the expected Mercedes upscale execution, with a high-quality feel to every surface, switch, and button, and nothing garish or flashy. The artificial-leather upholstery, called MB-Tex, is the most believable fake leather you’ll find anywhere, and honestly, it can pass for the real thing.
-15-
Audi, BMW, Lexus, Infiniti, among others, also offer non-animal interiors in many markets.
Tesla Motors Guidance
Given these facts, it is in both the shareholders’ and our planet’s best interests to eliminate the use of animal-sourced materials in TM’s products. This proposal encourages TM to consider establishing goals that:
1. Reduce the use of animal-sourced materials by 5% in 2016, 30% in 2017, and 60% in 2018, with complete elimination by EOY 2019 (baseline: 2014); and,
2. Cease the practice of penalizing customers who choose the most environmentally conscious, non-animal sourced interior choices, by EOY 2015. (Under current ordering protocols, if a leather interior is not ordered, Next-Generation seats, door panel, footwell and trunk lighting become unavailable or are downgraded.)
Conclusion
I ask for your support of this proposal because the evidence is overwhelming: GHG emissions from animal sources are a major threat. The elimination of animal-sourced materials from TM’s products will decrease the company’s environmental impact without penalty to our customers’ wants, needs or tastes. It is the right thing to do for TM, the planet, and all beings that live on it.
-16-
STOCKHOLDER PROPOSAL BY MS. ELIZABETH FARRELL PETERS
Stockholder Proposal and Supporting Statement
In accordance with SEC rules, we have set forth below a stockholder proposal from Elizabeth Farrell Peters, along with a supporting statement of the proponent. Ms. Peters has notified us that she is the beneficial owner of 250 shares of the Company’s common stock and intends to present the following proposal at the 2015 Annual Meeting. The stockholder proposal will be required to be voted upon at the 2015 Annual Meeting only if properly presented.
Proposal — Tesla Motors as a Cruelty-free Brand
The Model S is so far ahead of the industry that in Consumer Reports’ “Quick Take” video, with ~400k YouTube views, the evaluators at the non-profit stated:
We’ve been testing cars at Consumer Reports for a very long time, but we’ve never seen anything quite like the Tesla Model S. This car performs better than anything we’ve ever tested before. Let me repeat that, not just the best electric car, but the best car.
They concluded:
But overall, this is a terrific car. And what’s really amazing, it’s from a small company in California that has only begun building cars, and it performs better than the entries from any other car company, even companies that have been around for over 100 years.
TM should continue its ground-breaking, rule-shattering leadership by exploring the possibility of becoming the first cruelty-free, premium brand.
Ethical / Moral Implications
In the Forward of Why We Love Dogs, Eat Pigs, and Wear Cows: An Introduction to Carnism by Melanie Joy, PhD, John Robbins wrote:
The result is that we have a system of industrialized animal food production, a system of factory farming, that is under no legal compunction not to torture the animals in its “care.” The standard operating procedures in the industry are not designed to be cruel. That is not their goal or their intent. They are designed to be cost effective. But if it turns out that it is cost effective to confine animals in conditions that actually resemble Auschwitz or Dachau, then that’s what will happen.
And that’s what has happened.
Most of the millions of cows and other animals whose skins are turned into leather endure the horrors of factory farming — extreme crowding and confinement, deprivation of food and water, and disease. Branding, tail-docking, dehorning, and castration are all commonly performed without painkillers. Animals are transported hundreds of miles to feedlots and slaughterhouses-where improper stunning means many are skinned while still alive.
Alternatives
Cruelty-free materials are used by other brands: BMW’s SensaTec, Mercedes-Benz’s MB-Tex, Toyota’s SofTex, Lexus’ NuLuxe (and Infiniti’s equivalent), along with Alcantara and others.
The benefits of these products extend beyond the ethical and moral to the practical and environmental. Lexus’ website reports that NuLuxe’s manufacturing generates 65% fewer CO2 emissions than other
-17-
Toyota’s website states: “SofTex ® is a synthetic leather seat material designed for wear, easy cleaning and resisting spills. Soft to the touch, SofTex weighs about half as much as genuine leather. The way it’s made generates around 85% fewer CO2 emissions and 99% fewer Volatile Organic Compounds (VOCs) than conventional synthetic leather. It also does not include any animal-based material.”
Tesla Motors Guidance
To retain industry leadership, TM should consider becoming the first cruelty-free, premium brand.
-18-
The Board of Directors has considered these proposals, each of which relates to a similar subject matter, and has determined that neither is in the best interests of the Company or its stockholders.
Tesla’s mission when it was created more than a decade ago was the same as it is today: to accelerate the advent of sustainable transport by bringing compelling and increasingly affordable electric cars to market. This is why we are building the Gigafactory, expanding our production capacity at the Tesla Factory, and developing new electric vehicles.
Achieving this mission requires that we prioritize our efforts. In some cases, this means using existing materials to meet consumer expectations, where exploring alternatives would impede or delay us. Ultimately, by focusing on our mission, we believe we will create the most possible good.
T HE B OARD OF D IRECTORS R ECOMMENDS A V OTE AGAINST EACH OF P ROPOSAL T HREE AND
P ROPOSAL F OUR .
-19-
*****************************************************
____________________________________________________
Dear Fellow Investors,
It is with some trepidation that we ask for your assistance in securing your "FOR" votes on 2015 TSLA Proposals Three and Four, but it must be done. In the past, forum "debate" on this subject has degraded to irrational, grade school-like ad hominem attacks; let's hope that's no longer the case.
Both proposals will be "presented" at the June 9th Annual Shareholder's Meeting, but Tesla has given us a full THREE minutes each; that's not much presentation. Frankly, it smacks of, "Our minds are made up, please don't bother us with the facts."
Furthermore, it's a mere formality at that point since the vast majority of the votes will have already been cast by June 9th, this despite the significant roadblocks to actually seeing the proposals. Thus, nearly all shareholders will see nothing more than the board recommendation to vote "AGAINST," and not see a single word from either proposal. (In our case, no hard copies of the Tesla Motors Annual Report were mailed, unless specifically requested. This was in direct contrast to previous years where the default option had hard copies of the annual reports mailed, unless specifically not asked for. We'll presume your experience this year was similar?)
Adding salt to the wound, Tesla's Board has stated what must be the Tesla equivalent of, "The dog ate my homework," as their reasoning for their "AGAINST" recommendation. Frankly, in light of the facts, that's remarkably "un-Tesla" as they are normally a fact- and logic-based organization.
Hence, our request: please review the proposals below and vote "FOR" both. The SEC limit of 500 words severely limits the number of facts that could be included in the proposals, but please see the hyperlinks below for more details.
At the end of the day, Tesla Motors exists to transition ground-based transportation from a high-GHG output problem that threatens all life on Earth to something that's sustainable. As Elon explained in March, the status quo is, "The dumbest experiment in history..." He's right.
Elon Musk: Burning Fossil Fuels Is the 'Dumbest Experiment in History, By Far' | Motherboard
In the past Elon has used the metaphor of a leaking lifeboat and a bucket. I'll use it again. If we're trying to bail water out of the lifeboat, why would anyone intentionally poke holes in the bailing bucket? Yet with arguably 80 or 90% of the Model S's sold today, that's exactly what Tesla is doing . . . .
And that is what's really insane.
Thanks for your support--we're going to need it!
Sincerely,
Mark and Elizabeth Peters
"The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man."
--George Bernard Shaw
p.s. For additional information, please see:
Livestock a major threat to environment
http://www.cowspiracy.com/facts
And, for those that think the status quo is "natural," please click through these links:
Watch Video at TEDxTalks
http://www.adaptt.org/Mills The Comparative Anatomy of Eating1.pdf
(BTW, Dr. Milton Mills is a Stanford Medical School graduate.)
NutritionFacts.org | The Latest in Nutrition Related Research
************************************
PROPOSAL THREE
STOCKHOLDER PROPOSAL BY MR. MARK PETERS
Stockholder Proposal and Supporting Statement
In accordance with SEC rules, we have set forth below a stockholder proposal from Mark Peters, along with a supporting statement of the proponent. Mr. Peters has notified us that he is the beneficial owner of 1,540 shares of the Company’s common stock and intends to present the following proposal at the 2015 Annual Meeting. The stockholder proposal will be required to be voted upon at the 2015 Annual Meeting only if properly presented.
Shareholder Proposal — Reduced Environmental Impact
Tesla Motors (TM) was created, in part, to address the significant environmental impact inherent in fossil-fuel powered transportation. While the Company seeks environmentally sustainable solutions, TM has made choices which conflict with these goals.
This proposal highlights the significant negative environmental impact of using animal-sourced products in TM’s products, and suggests TM minimize and then eliminate their use.
Negative Environmental Impact
In 2006 the UN Food and Agriculture Organization reported:
With rising temperatures, rising sea levels, melting icecaps and glaciers, shifting ocean currents and weather patterns, climate change is the most serious challenge facing the human race.
The livestock sector is a major player, responsible for 18 percent of greenhouse gas emissions measured in C02 equivalent. This is a higher share than transport.
[ftp.fao.org/docrep/fao/010/a0701e/a0701eOO.pdf]
This has also been supported in other research and was highlighted in the 2014 documentary, Cowspiracy .
Consumer Acceptance of Alternatives
Daimler AG, an early TM investor, has demonstrated high customer acceptance of the comfort, appearance, and durability of non-animal sourced interiors. The non-profit Consumer Reports, which accepts no advertising and anonymously purchases their test vehicles, stated the following in reviewing the 2014 Mercedes-Benz E-Class:
Expectations are high for a Mercedes interior and this one doesn’t disappoint. Almost every dashboard and door panel surface is covered with soft-touch materials. Swaths of wood encircle the interior and run down the center console. Lots of chrome bits liven up the cabin as does a fancy analog clock in the center dashboard. The faux leather perforated MB-Tex seats are convincing.
[http://www.consumerreports.org/cro/mercedes-benz/e-class/sedan-e250-bluetec-4-cyl/road-test.htm]
Their review of the 2015 C-Class was similar:
Inside you’ll find the expected Mercedes upscale execution, with a high-quality feel to every surface, switch, and button, and nothing garish or flashy. The artificial-leather upholstery, called MB-Tex, is the most believable fake leather you’ll find anywhere, and honestly, it can pass for the real thing.
-15-
Table of Contents
[http://www.consumerreports.org/cro/...ercedes-benz-c-class-looks-to-be-a-luxurious- crowd-pleaser/index.htm]Audi, BMW, Lexus, Infiniti, among others, also offer non-animal interiors in many markets.
Tesla Motors Guidance
Given these facts, it is in both the shareholders’ and our planet’s best interests to eliminate the use of animal-sourced materials in TM’s products. This proposal encourages TM to consider establishing goals that:
1. Reduce the use of animal-sourced materials by 5% in 2016, 30% in 2017, and 60% in 2018, with complete elimination by EOY 2019 (baseline: 2014); and,
2. Cease the practice of penalizing customers who choose the most environmentally conscious, non-animal sourced interior choices, by EOY 2015. (Under current ordering protocols, if a leather interior is not ordered, Next-Generation seats, door panel, footwell and trunk lighting become unavailable or are downgraded.)
Conclusion
I ask for your support of this proposal because the evidence is overwhelming: GHG emissions from animal sources are a major threat. The elimination of animal-sourced materials from TM’s products will decrease the company’s environmental impact without penalty to our customers’ wants, needs or tastes. It is the right thing to do for TM, the planet, and all beings that live on it.
-16-
Table of Contents
PROPOSAL FOURSTOCKHOLDER PROPOSAL BY MS. ELIZABETH FARRELL PETERS
Stockholder Proposal and Supporting Statement
In accordance with SEC rules, we have set forth below a stockholder proposal from Elizabeth Farrell Peters, along with a supporting statement of the proponent. Ms. Peters has notified us that she is the beneficial owner of 250 shares of the Company’s common stock and intends to present the following proposal at the 2015 Annual Meeting. The stockholder proposal will be required to be voted upon at the 2015 Annual Meeting only if properly presented.
Proposal — Tesla Motors as a Cruelty-free Brand
The Model S is so far ahead of the industry that in Consumer Reports’ “Quick Take” video, with ~400k YouTube views, the evaluators at the non-profit stated:
We’ve been testing cars at Consumer Reports for a very long time, but we’ve never seen anything quite like the Tesla Model S. This car performs better than anything we’ve ever tested before. Let me repeat that, not just the best electric car, but the best car.
They concluded:
But overall, this is a terrific car. And what’s really amazing, it’s from a small company in California that has only begun building cars, and it performs better than the entries from any other car company, even companies that have been around for over 100 years.
TM should continue its ground-breaking, rule-shattering leadership by exploring the possibility of becoming the first cruelty-free, premium brand.
Ethical / Moral Implications
In the Forward of Why We Love Dogs, Eat Pigs, and Wear Cows: An Introduction to Carnism by Melanie Joy, PhD, John Robbins wrote:
The result is that we have a system of industrialized animal food production, a system of factory farming, that is under no legal compunction not to torture the animals in its “care.” The standard operating procedures in the industry are not designed to be cruel. That is not their goal or their intent. They are designed to be cost effective. But if it turns out that it is cost effective to confine animals in conditions that actually resemble Auschwitz or Dachau, then that’s what will happen.
And that’s what has happened.
Most of the millions of cows and other animals whose skins are turned into leather endure the horrors of factory farming — extreme crowding and confinement, deprivation of food and water, and disease. Branding, tail-docking, dehorning, and castration are all commonly performed without painkillers. Animals are transported hundreds of miles to feedlots and slaughterhouses-where improper stunning means many are skinned while still alive.
Alternatives
Cruelty-free materials are used by other brands: BMW’s SensaTec, Mercedes-Benz’s MB-Tex, Toyota’s SofTex, Lexus’ NuLuxe (and Infiniti’s equivalent), along with Alcantara and others.
The benefits of these products extend beyond the ethical and moral to the practical and environmental. Lexus’ website reports that NuLuxe’s manufacturing generates 65% fewer CO2 emissions than other
-17-
Table of Contents
synthetic leathers and no VOCs. “NuLuxe seating material offers more than just good looks and a supple texture. It weighs half as much as leather. Offering the fit and finish you’d expect in a Lexus, it’s available in multiple unique colors.”Toyota’s website states: “SofTex ® is a synthetic leather seat material designed for wear, easy cleaning and resisting spills. Soft to the touch, SofTex weighs about half as much as genuine leather. The way it’s made generates around 85% fewer CO2 emissions and 99% fewer Volatile Organic Compounds (VOCs) than conventional synthetic leather. It also does not include any animal-based material.”
Tesla Motors Guidance
To retain industry leadership, TM should consider becoming the first cruelty-free, premium brand.
-18-
Table of Contents
OPPOSING STATEMENT OF THE BOARD TO PROPOSAL THREE AND PROPOSAL FOURThe Board of Directors has considered these proposals, each of which relates to a similar subject matter, and has determined that neither is in the best interests of the Company or its stockholders.
Tesla’s mission when it was created more than a decade ago was the same as it is today: to accelerate the advent of sustainable transport by bringing compelling and increasingly affordable electric cars to market. This is why we are building the Gigafactory, expanding our production capacity at the Tesla Factory, and developing new electric vehicles.
Achieving this mission requires that we prioritize our efforts. In some cases, this means using existing materials to meet consumer expectations, where exploring alternatives would impede or delay us. Ultimately, by focusing on our mission, we believe we will create the most possible good.
T HE B OARD OF D IRECTORS R ECOMMENDS A V OTE AGAINST EACH OF P ROPOSAL T HREE AND
P ROPOSAL F OUR .
-19-
*****************************************************
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