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lluminated, visionary, genius, controversial, egocentric... These are just some of the adjectives used to describe Tesla's founder, Elon Musk. He probably has a bit of all of them, because, after all, someone who wants to change the world cannot leave anyone indifferent. Each of the projects initiated by this physicist born in South Africa in 1971 has emerged with the idea of revolutionizing life as we know it. Whether it's proposing civil transport to Mars, expanding solar energy, or solving traffic problems with ultra-fast tunnels and platforms. That's why it was no coincidence that in 2003, when he founded the automotive company, he chose to name it after the inventor of the alternating current motor, Nikola Tesla. It was a way of reclaiming the figure of the inventor, but also a declaration of intent. Tesla came into the world to lead the shift of the four-wheel industry towards electrification, and with the medium-term goal of democratizing a technology that today is still expensive for a mass audience.
The truth is that betting on Musk's failure is a sport that gains followers. Just a few days ago, the short fund Vila Capital speculated about the dark future of the company and its founder, assuring that Tesla would go bankrupt before 2019, and that Musk would end up serving prison sentences for lying and giving false expectations to his investors.In just a few years on the market, Tesla has become a benchmark in the sector, not so much for its sales volume, still low, as for the expectations it generates. But Musk, like other revolutionary entrepreneurs such as the late Steve Jobs (Apple) or Mark Zuckerberg (Facebook), has made a place for himself in headlines around the world thanks also to his particular character –they say his employees prefer to send him emails than to confront him in person– and to his already famous communications via Twitter. On the social network, he has 22.4 million followers, and it was there a few weeks ago that he unleashed a real financial storm by speculating with the idea of delisting Tesla from the New York stock exchange. Months earlier, during the Anglo-Saxon equivalent of April Fool's Day, Musk had already generated astonishment in the press and markets with a tweet in which he 'acknowledged' the company's insolvency. He was thus ironically responding to all those who question his future plans.
The truth is that betting on Musk's failure is a sport that gains followers. Without going any further, a few days ago the short fund Vila Capital speculated about the dark future of the company and its founder, assuring that Tesla would go bankrupt before 2019, and that Musk would end up serving prison sentences for lying and giving false expectations to his investors. However, is the automaker's situation really that delicate? Since the commercialization of its first models (the S and the X), in short series and at prices almost like a collector's car, Musk's aspiration has been to democratize electric technology with a vehicle at more affordable prices, and with higher production. Deeply perfectionist and demanding, Musk has even become involved in the work of his engineers, designing and improving parts while leading the company.
The brand's great hope was the commercial launch of its Model 3, the first in a more permissive price range for the middle class. Although the initial $35,000 that the entrepreneur promised ended up being a few more, the Model 3 has positioned itself as the leader in electric vehicle sales in the North American market, with shares close to 50% in July. In a recent interview with renowned tech YouTuber Marques Brownlee, Musk expressed hope of being able to offer this model at a price of $22,000 in three or four years.
But the pressure is high because Tesla is not meeting production targets, and time seems to be working against Musk. The Freemont (California) factory not only has problems increasing its capacity, but the brand's after-sales service has also begun to fray customers' nerves due to its slowness and lack of spare parts. Musk himself acknowledged in an interview in The New York Times that 2018 is being the "worst" year since he founded the company and, even, accepted that the worst might still be to come. He speaks with reason. The list of investors calling for his head grows every day and many on Wall Street see Musk as the biggest uncertainty in Tesla's future due to his erratic and unstable behavior. His confidences explaining that many days he sleeps in the factory and doesn't even go out have not helped generate confidence. And the latest video of Musk smoking Marijuana -this drug is legal in California- during an interview for an online media outlet is much more than many at Tesla are willing to tolerate. For this reason, no one seems surprised that the exodus of senior executives at the automaker is constant -more than two dozen executives have abandoned ship in the last two years-, nor that financial circles speculate about the option that Musk might end up suffering what Steve Jobs already experienced at the time, when in 1985 he was 'invited' to leave the board of Apple, the company he himself had created, for being considered a risk to the future of the brand.
Rumors of all kinds grow while the US stock market supervisor investigates the entrepreneur for his tweet on August 7 where he stated that he intended to delist the company and that he had the necessary financing to do so. If this investigation prospers and it is proven that he lied, Musk could face serious legal consequences. In parallel, the manufacturer's board of directors would have opened a process to hire a new executive to become Musk's right-hand man and be able to take over automatically if things go wrong. But, at the same time, other shareholders warn of the impact that removing Musk could have on the company's value, which is worth about 54,000 million dollars on the stock market, ahead of big players in the four-wheel sector with much higher sales such as General Motors or Ford.
Pending the opening of its new plant in China (scheduled for 2023) and also pending finding a location for the European factory, Tesla's future depends on its ability to increase production, reduce costs, and finally achieve profitability. It's not an easy path, and some believe it will be even less so with Musk at the helm of the firm, but the South African is the soul of Tesla. And that is also a weighty argument. After all, Apple did nothing without Jobs, and it was when he returned that it became the sector leader with the iPhone.