Wait, we don’t like Elon Musk now?
A quick rundown on why the world at large is treating Elon Musk with a little skepticism these days…
Amidst the excitement of the World Cup final on July 15, you might have been forgiven if you missed the fact that Elon Musk accused one of the cave divers involved in the Tham Luang cave rescue of being a pedophile…
Unsurprisingly, this has caused some confusion. Dismay, even! After all, the comments come in the middle of a very public flap that Mr. Musk is having with the world at large about the feasibility of the rigid submarine that he invented to save the trapped Thai children either: (1) fitting through the cave system (2) being adequately appreciated by the people who were squeezing through the bowels of the Earth to rescue a starving and stranded children's soccer team.
The weirdest part of all of this is that it’s not even the worst thing on Elon Musk’s mind right now. Despite having all of the internet currently debating if Elon Musk has deluded himself into thinking he’s Tony Stark, and having an even larger chunk assign his presumptions about technological capability into grand theories on the technological hubris of Silicon Valley (the article, linked below, is a must read), Mr. Musk’s main issues come from the slow and steady implosion of Tesla, one of his more famous entrepreneurial adventures.
“Wait what, isn’t Tesla changing the world?”
You’d be forgiven for thinking so. Tesla — Elon Musk’s wildly popular electric car company — has captured the hearts and minds of the world’s car enthusiasts, celebrities, and weirdly, all of Norway, where it’s the country’s most popular car.
A lot of what’s going wrong in Elon Musk’s life right now can be pinned on the major issues with Tesla — where missed earnings, a lack of money, and a grim ignorance of basic safety protocols and procedures is resulting in a whole lot of scrutiny, and not the good kind either.
There’s a lot going on — let’s take a look:
Earnings Misses and Cashflow Problems
A lot of eyes were on the Tesla Q2 production numbers earlier this month. Tesla has spent the past few months battling worries over its increasing losses and concern over its ability to meet production targets. So when it’s new earnings numbers came out, showing that they had posted another quarter of record losses, and had only managed to meet production targets by reassigning workers, offering free Red Bull to its employees, and building cars in a temporary tent outside, people started asking questions like this one:
Making cars is expensive, especially when you’re building the infrastructure for production, prototyping, and delivery independently. Traditional American manufacturers have the benefit of over a century of economies of scale, as well as an incredibly diverse product lineup that allows production and experimentation on loss leaders.
Tesla has none of that. Instead, it has a tent, a record number of short sellers, and a CEO who seems unable or unwilling to acknowledge that people are concerned about his company’s ability to produce the number of cars that he says it can in the time that he claims it takes.
It’s enough to make you want to short some Tesla stock…
Ignoring Safety Standards
Yeah so let’s go back to the fact that Tesla made its Q2 production goals. Because it turns out, it did so in a way that is maaaaaybe a little unsustainable.
Working conditions at Tesla’s factories are allegedly not the best. Per the above article, meeting those Q2 production goals required Red Bull on tap, walking through raw sewage, and apparently developing a form of PTSD that workers started calling the Tesla Stare.
Which is generally not a good look…(pun intended)
Earlier in 2018 as well, Musk and Tesla were hit with accusations of horrendously unsafe working conditions in Tesla factories. The report revealed that the Tesla factory underutilized safety zones painted in yellow and forklifts that made precautionary warnings because Elon Musk disliked both the color yellow and beeping forklifts.
The response from Tesla’s management to someone who brought up how dangerous not having basic yellow painted areas would be:
“ Elon does not like the color yellow.”
Tesla’s factories can be considered unsafe — they have higher average injury rates than other comparable auto manufacturers. However, this is all exacerbated by the fact that these accidents could quite possibly be preventable. Many online are raising the question if Musk and Tesla’s need to meet production targets is causing basic safety precautions to take a back seat to increased efficiency.
It is worth noting that all of this comes amidst an incredibly long battle between Musk, the United Auto Workers (UAW) union, and workers at his factory. Musk, long a union opponent, has resisted attempts by Tesla workers to unionize, and gone on long Twitter tirades against unions. The UAW, for its part, has accused Musk of engaging in illegal unionization suppression and for not caring enough about his workers.
Elon Himself
Of course, all of this merits a discussion of Elon himself. It’s clear that Elon Musk is not a traditional CEO. And, in all this, it is worth noting that Musk has built incredibly successful ventures in PayPal and Zip2, while innovating space-faring technology with SpaceX.
However, Elon Musk seems like the biggest danger to Elon Musk right now. Over the past few months, Musk has gone on long tirades on Twitter over the following matters:
Press fairness and accuracy
(this one ended with people accusing him of anti-semitism after this tweet)
Arguing with competing spaceflight CEOs
Calling transit experts who disagree with his autonomous car model “idiots”
So what do we do with all of this?
It’s tricky. Elon Musk is successful. Elon Musk has invented some fantastic things. And Elon Musk has started the Musk Foundation, an orgnization with a notably minimalist website but multi-million dollar grant-making capability and history.
Tesla has a long and rocky road ahead of it, by contrast. Its earnings are falling, it is being shorted in record fashion, and people are losing faith in the company largely due to the Twitter antics of its CEO. It’s worth noting that for all the business decisions that one makes, if Tesla starts getting painted with the same negative brush that Elon Musk is beginning to invite onto himself, then things at Tesla may just not get better again.
To that end, we like this solution:
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