Musk’s wild ambitions road-tested by reality
Tesla chief’s Twitter bombshell has focused the minds of supporters and critics, but the road ahead looks uncertain
Looking back, no other automotive company would have withstood the attacks Tesla has,” says Professor David Bailey, a car industry expert at Aston University. “To achieve what it has against such odds, it’s remarkable.”
But then Tesla is like no other company. Is it a tech business, or a carmaker — or a bit of both as the two sectors collide in the arena of autonomous electric vehicles?
And then there’s the strategy. Tesla boss Elon Musk set this out in 2006 with a blog titled The Secret Tesla Motors Master Plan (just between you and me). In it, he described his dream of “expediting the move from a mine-and-burn hydrocarbon economy towards a solar electric economy”. He surmised his essay thus: “Build a sports car, use that money to build an affordable car, use that money to build an even more affordable car, while doing that, also provide zero-emission electric power generation options.”
And he’s gone a long way down that road. First with the Roadster, then the Model S sedan, next the Model X SUV and currently the Model 3, a vehicle priced from $35,000 (Dh128,537) and intended to make electric cars affordable to the mass market. Tesla has almost become a byword for the electric vehicle, and the company is also developing sustainable solar power. In short, Musk wants to change the world. He’s also revealed plans for an electric truck, a new Roadster, a Model Y crossover and raised the prospect of a Tesla pickup.
“Tesla means we think differently about the whole issue of mobility,” adds Bailey. “But it’s open to question whether the company will survive.”
“What Elon has achieved is extraordinary,” says one longterm Tesla investor who knows Musk. “He’s changed the car market to an amazing degree.”
The trouble is, large parts of the financial world don’t like how Musk is going about it. He’s not playing by the rules of how a public company traditionally operates: missing targets he’s set, burning through cash — about $8bn so far — not making a profit and running up almost $10bn of debt. It’s on those measures the financial community judges him — and they hate what they are seeing.
Perhaps it was inevitable Musk should use Twitter to drop the bombshell last week that he was “considering taking Tesla private at $420. Funding secured” — a message suggesting he had tired of the scrutiny that being a listed business entailed. As Tesla shares surged in reaction, Musk explained his thinking, saying he was “trying to accomplish an outcome where Tesla can operate at its best, free from distraction and short-term thinking” and away from “distracting, wild swings” of the stock market.