Increased competition from companies like BYD has intensified pressure on Tesla to innovate and sustain its market position amid declining sales and profits.

A group of 27 major Tesla shareholders has urged the company's board to set a date for the overdue annual shareholder meeting, citing legal obligations and governance concerns, as Tesla missed its July 13 deadline.

Tesla's stock has declined nearly 40% from its December 2024 peak, with sales decreasing in early 2025 amid investor worries about Elon Musk's political activities distracting from company performance.

The upcoming shareholder meeting is expected to be contentious, with shareholders questioning Musk's focus on politics and side projects, and the company has yet to announce a specific date or provide detailed agenda items.

Tesla is shifting its focus from vehicle sales to full self-driving technology and robotics, despite both being in early development stages, which complicates its narrative to investors.

Speculation suggests Tesla may need more time to finalize proposals, including a potential new CEO compensation package for Musk or a merger involving xAI, as delays continue.

Tesla faces operational challenges such as disappointing second-quarter deliveries, which declined by 13.5%, and lagging energy storage deployments, raising questions about its ability to maintain EV market leadership.

Elon Musk announced that the Grok chatbot, developed by his AI company xAI, will soon be integrated into Tesla vehicles, with updates expected next week, despite previous controversies over inappropriate content.

Grok, designed as an unfiltered AI alternative, has faced backlash due to inappropriate remarks, including antisemitic comments, which has raised concerns about its rollout.

Major pension funds, international investors, and state treasurers have signed a letter emphasizing the importance of strong governance at Tesla, especially given Musk's political activities and close board ties.

Tesla did not provide an explanation for the delay in scheduling the shareholder meeting or for missing its initial proxy filing deadline in April, raising governance concerns.

A failed vote on Musk's pay could lead to lawsuits or proxy battles, while a successful reform might temporarily boost Tesla's stock, depending on Musk's strategic execution.

Investors are advised to monitor short-term volatility, demand clarity on governance, or wait for the meeting outcome before making investment decisions.