Elon Musk’s commitment to Tesla third-party audits was a victory for proposal that received zero votes

During the 2023 annual shareholder meeting, Elon Musk directly addressed a proposal to have Tesla adopt third-party audits for its battery suppliers. The audits are designed to ensure that no child or forced labor is being used in the electric vehicle maker’s battery supply chain.

The proposal was brought forward by the Investor Advocates for Social Justice (IASJ), whose representative, Courtney Wicks, spoke of child labor in the Democratic Republic of the Congo (DRC) and forced labor among Uyghurs in China. Wicks argued that these issues must be addressed by Tesla, even though the company has already been fairly transparent about its battery supply chain in its Impact Reports.

Tesla Vice President of Investor Relations Martin Viecha later noted that the IASJ’s proposal had been rejected by Tesla shareholders. During his talk, however, Elon Musk noted that Tesla would be conducting a third-party audit on its battery supply chain anyway. The CEO also highlighted that the cobalt content of Tesla’s batteries is quite small, especially when compared to the chemistries of the batteries used in mobile phones today.

“I heard a question raised about cobalt mining. And you know what, we will conduct a third-party audit. In fact, we’ll put a webcam on the mine. If anybody sees any children, please let us know,” Musk said.

According to a Form 8-K from Tesla, the IASJ should count itself extremely fortunate. With Elon Musk pledging to conduct third-party audits on Tesla’s battery supply chain, the organization can be assured that the checks will likely be implemented. This is a victory for the organization, especially considering that the votes for the shareholder proposal, according to the Form 8-K, were quite surprising.

As can be seen in Tesla’s Form 8-K, the IASJ’s proposal to urge Tesla to report on child and forced labor received zero votes in support of the suggestion. A total of 2,420,047,519 votes were against the proposal. These results are interesting since the IASJ holds TSLA shares. Considering that there were zero votes supporting the proposal, it would appear that the IASJ itself may have also voted against it.

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