Tesla: The Improvisation Debt
Jean-Louis Gassée

I just finished his biography, the guy certainly is intense and ambitious, if nothing else. He demonstrates that genius is 80% sweat and 20% brilliant decision-making.

He has some 400,000 pre-orders for the Tesla 3, people who have put down $1000 to reserve their car. One can assume these are not the current deep-pocketed Tesla owners who can throw out a grand without blinking, rather these are people hoping and praying Musk can deliver.

The delivery of the Tesla 3 will, as everyone assumes, be delayed, but for how long? And how long are these pre-orders willing to wait? This is the key moment, the critical dynamic, in Musk’s Improvisation Debt. If Musk can confidently announce a, say, six-month or so delay, then most pre-orders will be willing to wait. If Musk pushes the delivery date back a year or more, then he will begin to lose large numbers of those pre-orders. If he loses a substantial number of those pre-orders, then things could get very tense with Tesla’s financial future. Investors would need to step in and bet on the strength of Musk’s character in giving him a lifeline to get the Tesla 3 out the door.

If I could walk into a dealership today and drive away with a Tesla 3, Musk would be able to fully upend the auto industry, he could easily sell a million of them in a matter of months. But as Jean-Louis notes, there’s a lot that still does not exist in making this a reality, there’s a long way to go for Tesla to be able to deliver on this. And the competition will not sit still while Tesla does all this R&D while simultaneously ramping up production: BMW, for example, is in the process of spinning off its electric car production into a separate company to give it more entrepreneurial independence to innovate. The i3 is the product of an incredible amount of research, and the product of this R&D can fold into a wide variety of innovative vehicles.

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