Tesla’s board still needs more work

Financial Mirror (Cyprus) - - MARKETS - By Paul Au­sick

I re­main a be­liever in the Tesla story. The com­pany has the best prod­uct roadmap in tech and will ride mul­ti­ple waves in­clud­ing the growth of EVs, au­tonomous ve­hi­cles, ride shar­ing, so­lar cap­ture, and en­ergy stor­age.

While we’re op­ti­mistic about Tesla’s fu­ture, the com­pany’s board could still ben­e­fit from a ma­jor over­haul. The ap­point­ment of Robyn Den­holm to chair­woman fol­low­ing the SEC set­tle­ment pro­vides a po­ten­tial spark for change, as will the com­ing two new in­de­pen­dent di­rec­tors, but more changes need to be made. An­a­lysts pre­vi­ously wrote about how Tesla could ben­e­fit from more truly in­de­pen­dent di­rec­tors on the board, and this is still true.

The com­pany’s strong Septem­ber re­port demon­strated mean­ing­ful steps to­ward sus­tain­abil­ity but may be blind­ing us from the re­al­ity that this same board did not have the ear of Elon Musk while he was en­gag­ing in mul­ti­ple su­per­flu­ous ac­tiv­i­ties that were hurt­ing the com­pany. Many are strong be­liev­ers in Musk as the leader of Tesla, but also re­alise that he, from time to time, needs to be pro­tected from him­self in try­ing to win every bat­tle. It seems un­re­al­is­tic to be­lieve that this same board would be able to ex­ert mean­ing­ful in­flu­ence over Musk if he veers to­ward mean­ing­less bat­tles in the fu­ture de­spite the change in the chair and the two new voices.

Turn­ing over half of the cur­rent board plus adding the two new in­de­pen­dent di­rec­tors would be a mean­ing­ful pos­i­tive step in the right di­rec­tion. This would give the com­pany the op­por­tu­nity to add mul­ti­ple board mem­bers with man­u­fac­tur­ing ex­pe­ri­ence that may re­duce the need for Tesla to learn from its own mis­takes in the fu­ture. A stronger board would mean a stronger Tesla.

So, what’s next?

There are two key pieces of the Tesla story that will play out over the next few months. Most im­por­tant are De­cem­ber re­sults and the com­pany’s abil­ity to con­tinue to scale pro­duc­tion of Model 3 while in­creas­ing gross profit mar­gin. The Septem­ber quar­ter was a ma­te­rial step to­ward Tesla ac­com­plish­ing its De­cem­ber 2018 goal to scale pro­duc­tion and Model 3 prof­itabil­ity. (Source: 24/7 Wall St.com)

Newspapers in English

Newspapers from Cyprus

© PressReader. All rights reserved.