>Of more concern to Tesla investors: What if he knows something they don’t know about the company’s financial future — and is hoping to hang any failure on the nasty, overreaching regulators rather than his own dubious management skills?
That seems very possible.
I think the reality of scaling up Tesla to live up to its valuation might be too daunting for Elon to handle. It might even be impossible. EV sales as a % of total vehicle sales is surprisingly low. If EV's do take off, it's likely to be the established car manufacturers who are good at making cars at scale who eventually capitalize on the opportunity. And the most likely to drive the S-curve adoption.
Being taken out by the SEC would be a way to keep confidence in Elon Musk Inc going which would obviously be beneficial to his other companies. He could even team up with Mark Cuban to rail against them on Twitter.
> If EV's do take off, it's likely to be the established car manufacturers who are good at making cars at scale who eventually capitalize on the opportunity.
This is what I used to think, but every year the "Tesla killers" fail to kill, or even wound. I never even hear about the other EV's by themselves, only as the competition to Tesla. Anybody who watches the news would have known that the Model 3 was a colossal failure. But it wasn't. It was just 6 months late, which is not bad given the scale of the project. The narrative is just not reality here. Tesla has a head start on the industry. That doesn't guarantee anything, but I think that it's a bigger advantage to Tesla than it would be to any other car company because one of Elon Musk's strengths (Spacex too) is iteration speed.
Last I heard they got the price down to $45K, so they are in striking distance of the $35K target and won't stop there. EV's are mechanically simpler than gas powered cars. Once the technology and economies of scale are there, they will be cheaper. And I don't see any other company in a better position to get there first.
Edit:
Predicting that the established players being the ones to take the lead in a new technology sounds like common sense, but it isn't:
> It's likely to be the established electronics companies who are good at making electronics that take the lead in semi-conductor manufacturing.
> It's likely to be the established mail order companies who are good at delivery logistics that take the lead in online retail.
> It's likely to be the established taxi companies who are good at running taxi fleets (and have a legal monopoly) that take the lead in ride sharing apps.
If the pattern holds (which is not by any means guaranteed), Tesla has more to fear from a yet to be founded startup than it does from the legacy car manufacturers.
Though if it's all too much and he'd rather focus on rockets, I don't see why he wouldn't just step down as Tesla CEO. If things go south he could just blame the new CEO.
This begs the question: does Elon Musk seem like the kind of person who isn't willing to fail in public?
Whether it's for personality reasons or for the sake of keeping his other companies well respected, is he unwilling to let the public lose confidence in him and/or his projects?
My guess is he doesn't care that much about our opinions of him, personally and professionally.
He might be picking a fight with the SEC simply because he can.
There's something to be said for having "FU money" and using it, in the near-literal sense.
I have always thought that the real potential in Tesla is a fully-realised gigafactory. When you can near totally automate complex manufacturing at scale, you can basically whitelabel the factory as a product in and of itself (or put it in orbit and build Mars habitats :)
> If EV's do take off, it's likely to be the established car manufacturers
But Elon Musk has said that that's what he wants. He doesn't want Tesla to win, he wants EVs to win. That's one of the things I admire about him.
But be acting flaky and irresponsible, and picking stupid fights, he's undermining people's confidence in Elon Musk, which reflects on his companies, and possibly on his product: EVs. I think it would be much better for his companies and for EVs in general if he ran his companies in a responsible and reliable manner, and he didn't pick stupid fights.
Or Musk thinks picking fights with regulatory authorities is a war he can win.
Or Musk just doesn’t give a damn about the SEC considering they take his tweets more seriously than the deliberate market manipulation practised daily by various publications in concert with big investors.
Maybe Musk feels that spaceflight to Mars is so close that he can afford to thumb his nose at US regulators because he will just move to Mars where they have no reach.
I agree, that Musk is hiding something, one that would seriously hamper his reputation. I think it might have to do something with the Solar City acquisition.
He doesn't want to admit he fucked up and failed because it would cast doubt on all his other half-baked ideas.
Tesla will definitely feel the pressure from other car manufacturers, but so far it has nothing much to worry about as the only really viable game changer as of now is the Hyundai Kona Electric. The new Audi e-tron was promising but ruined it with using electric mirrors which require your eyes to focus on far objects and near objects unlike a normal mirror, and heavy steel frame, which pretty much negates any excellent regen (due to heavy weight).
The Jaguar i-Pace is also a good alternative, but I feel like Hyundai's Kona E is an unbeatable value. Forget Chevy Bolt & Nissan Leaf....garbage.
The model 3 is seriously bad....did you see the interior? it's empty....its completely void apart from the giant tablet thing....the price is it's killing point.....now that there are are viable alternatives.
Maybe I'm naïve, but I'm actually buying the obliviousness of his behavior. I don't really believe in Tesla and would gladly buy the whole "suicide by SEC" thing, but reading what actually happened, this doesn't really sound like a big deal. Musk has been having emotional moments for a long time now, at this point it's really easy for me to just shrug off this as "he's always been like this". The last ten years of Musk carrier are just non-stop publicity-stunt drama, it's really easy to believe for me now that he honestly doesn't see the boundary that seems obvious to all lawyery SEC folks and other properly corporate people.
Would also explain his energy level. Manics can sometimes "use" their episodes to achieve hyperfocus, but as with synthetically induced mania (amphetamine) there are side effects.
I haven't thought about it in his case, but it is very plausible. I remember seeing it in Kanye when he was acting out before he talked about his bipolar.
Musk is another tortured CEO prodigy, as was Jobs. You can get rid of him, he can inadvertently get rid of himself, but at the end of the day he is Tesla. Take him out of Tesla, and you get for electric vehicles what happened to the iPhone / Apple after Jobs died.
Yeah they may pump out a few more Model X's, S's, 3's with some minor mods, keep milking the cow (if it even is a cow, maybe a potential cow, and also if they can even get to a point where they can scale) and eventually... who knows? The scale problem hasn't even been solved yet. You're not going to find another leader with that much raw energy, intellect, drive, and passion who's going to have a chance at bringing us to that reality even close to as quick as Musk can.
My only concern with the whole show is, can anyone (particularly seasoned auto veterans) stand to work with him long enough for the scale and production problems be addressed. As well as iron out all the wrinkles with the designs (some notoriously faulty parts which take quite a long time to fix sometimes..)
I don't see how he can reasonably defend himself in this situation. His tweet was both material and inaccurate. Tweeting material information without clearance is obviously against his settlement.
What confuses me is that TSLA's price hasn't suffered. I have a hunch this isn't as serious of a matter as is being reported, but I'm not sure why.
It's easy of you consider he's just promoting facts as any normal CEO would.
He's not yet used to the idea he has to be hyper specific with some data.
He's a showman, a salesperson, he's always going to err on the positive.
Constantly pitching, selling.
It's the SEC etc. that care about very specific details that could affect the company.
So while you're right - as a CEO has has 'no excuse' - the fact he would do it makes perfect sense.
I don't think he's trolling anyone, he's the same as he ever was, probably under a lot of stress, a little manic, and avoiding what he probably thinks is the narrow confines of corporate culture and language.
> What confuses me is that TSLA's price hasn't suffered.
If I'm to speculate, it's because last time Tesla tangoed with the SEC, it got a slap on the wrist. Perhaps the market is expecting more of the same.
Tangentally - I don't know how common this belief is, but Matt Levine in his newsletter argued that the best way the SEC could protect Tesla's shareholders is to not get rid of Elon Musk regardless of his behaviour. I'm not saying that is Levine's belief - it might have been a thought experiment - and I disagree wholeheartedly with it because it doesn't consider 2nd order effects on CEO behaviour against a powerless SEC and how this would impact other non-Tesla shareholders.
The problem is that he engaged in pretty blatant stock manipulation before (Funding secured!) which did change the stock price and part of his settlement was getting his tweets cleared.
He flagrantly violated that condition of his settlement. That's what makes it a big deal.
I'm honestly unsure what he has to gain by doing this. I can't imagine that the departure of the counsel isn't related. Maybe the GC announced he was leaving and that rattled Musk somehow? Very strange.
Personally I'd rather see the people in charge of transit tell him to fuck off with his stupid tunnels, unless he comes up with a proposal actually worth listening to.
It's pretty simple. Musk was hounded by short sellers who bet billions against Tesla and then spread patently false information about the company's activities and prospects[1]. Musk has one of those asymmetric senses of fairness (like the one that drove Gates to tears during Microsoft's anti-trust trials) that lost all faith in the SEC as it stood by and did nothing about what he felt was clearly illegal behavior.
In his mind, he was treated 'super unfairly' by bullies while the guardians stood by and did nothing. He really dislikes them for that.
Is his open disrespect a mature response? No. It's idealistic if not naive and he could be about to find out that the SEC does have teeth.
"The SEC similarly should be leading the charge against purveyors of short-and-distort schemes. Unfortunately, the commission inexplicably has been reluctant to do so.Just like a pump-and-dump, a short-and-distort scheme violates the Securities Exchange Act antifraud provisions, as well as SEC Rule 10b-5. In fact, it has brought hardly any enforcement actions targeting this conduct."
Just as a heads-up: Your 2nd link doesn't work for anybody but you (references a file on your local machine), and leaks your user name on that machine.
Maybe this is the link you wanted to post (contains the quote you posted):
This is a partial transcript of the Q4 2018 earnings call. There is a strong case to be made that the information was not market moving.
Operator
Thank you. Our next question is from Colin Rusch with Oppenheimer.
Colin Rusch
Thanks so much. Can you talk a little bit about the geographic dispersion for the guidance for 2019, where you're expecting the Model 3s to sell through as well as the other models?
Elon Musk
Well, I think we did, actually. Yes, it's clear in our letter.
Deepak Ahuja
We indicated in Q1, we will start delivering Model 3s in Europe and China. And we also shared a chart showing the potential market size for midsized premium sedans in North America, Europe and Asia, suggesting those markets could be even bigger. So I think that gives a good sense of where we'll be. And we'll launch the right-hand drive version at some point to go to the other markets.
Elon Musk
Yes. Maybe in the order of 350,000 to 500,000 Model 3s, something like that this year.
> probably what will happen is that Musk will go to court and the judge will yell at him and he will say he’s sorry and then six minutes later he’ll tweet “my fingers were crossed and I am NOT sorry” and he’ll go on TV that night and be like “you know what I have contempt for? Court,” and everyone will just be like “ehhhhhhhhhh good enough.”
No, this doesn't seem right. Musk is clearly burning through the good will he'd built up. There's going to be a limit to how much his aura can shield him, and it seems like he's really pushing to find that limit.
I've been following Elon for a very long time, and one of the reason I like him is that he sticks to what he says. So if today Elon says that he respects the justice dept, its very like that he really means it, and he will stick to it.
Tesla can’t produce that car for $15k and make a profit.
Gigafactory Battery production is expected to continue ramping up, with higher throughput lines, but operating costs are still exorbitant, and battery production is barely breaking even at current production. In fact, from what I know they’re in the red.
I don’t see a $35k Model 3 until battery production costs cut in half, which I won’t expect for another 3-5 years.
I know Tesla is beginning to manufacture it’s own batteries, but to be honest, I don’t see them succeeding.
Musk is clearly not making it any easier and I wish he would be more careful (and continue to be on Twitter). It's not fun for investors. Please don't create these fires.
I also hope that SEC would maintains an objective view of the issue and not get offended at the lack of respect from Musk.
Finally, I would love for Tesla to continue to thrive under Musk's leadership, unless he continues to shoot himself in his foot.
Why this bizarre cultish paranoia? He's in this mess because he committed securities fraud. He got a slap-on-the wrist sweetheart deal and he can't even stick to that.
He's done all of this to himself, and he can't seem to stop.
If the SEC were not following through with any other company, I would question their competence and charter. I would be interested in why you think TSLA in particular is being picked on here. I'll prime the conversation by saying that I see the facts as being an agreement where Musk agreed to not do $THAT, and turned right around and did $THAT, where the definition of $THAT can be agreed upon by the vast majority of people.
Your comment is (currently) downvoted, but it's a perfectly reasonable suggestion considering plenty of evidence of entrenched interests doing everything they can to take down Musk, obviously including the massive short position against Tesla, and the oil industry writer for the NY Times intentionally driving in circles in a parking lot to cause the car to run out of battery:
He's got the military industrial complex against him with SpaceX, and the oil and car industries against him with Tesla. It doesn't get more imposing than that.
[+] [-] Despegar|7 years ago|reply
That seems very possible.
I think the reality of scaling up Tesla to live up to its valuation might be too daunting for Elon to handle. It might even be impossible. EV sales as a % of total vehicle sales is surprisingly low. If EV's do take off, it's likely to be the established car manufacturers who are good at making cars at scale who eventually capitalize on the opportunity. And the most likely to drive the S-curve adoption.
Being taken out by the SEC would be a way to keep confidence in Elon Musk Inc going which would obviously be beneficial to his other companies. He could even team up with Mark Cuban to rail against them on Twitter.
[+] [-] travisoneill1|7 years ago|reply
This is what I used to think, but every year the "Tesla killers" fail to kill, or even wound. I never even hear about the other EV's by themselves, only as the competition to Tesla. Anybody who watches the news would have known that the Model 3 was a colossal failure. But it wasn't. It was just 6 months late, which is not bad given the scale of the project. The narrative is just not reality here. Tesla has a head start on the industry. That doesn't guarantee anything, but I think that it's a bigger advantage to Tesla than it would be to any other car company because one of Elon Musk's strengths (Spacex too) is iteration speed.
Last I heard they got the price down to $45K, so they are in striking distance of the $35K target and won't stop there. EV's are mechanically simpler than gas powered cars. Once the technology and economies of scale are there, they will be cheaper. And I don't see any other company in a better position to get there first.
Edit: Predicting that the established players being the ones to take the lead in a new technology sounds like common sense, but it isn't:
> It's likely to be the established electronics companies who are good at making electronics that take the lead in semi-conductor manufacturing.
> It's likely to be the established mail order companies who are good at delivery logistics that take the lead in online retail.
> It's likely to be the established taxi companies who are good at running taxi fleets (and have a legal monopoly) that take the lead in ride sharing apps.
If the pattern holds (which is not by any means guaranteed), Tesla has more to fear from a yet to be founded startup than it does from the legacy car manufacturers.
[+] [-] DennisP|7 years ago|reply
Though if it's all too much and he'd rather focus on rockets, I don't see why he wouldn't just step down as Tesla CEO. If things go south he could just blame the new CEO.
[+] [-] newsbinator|7 years ago|reply
Whether it's for personality reasons or for the sake of keeping his other companies well respected, is he unwilling to let the public lose confidence in him and/or his projects?
My guess is he doesn't care that much about our opinions of him, personally and professionally.
He might be picking a fight with the SEC simply because he can.
There's something to be said for having "FU money" and using it, in the near-literal sense.
[+] [-] L_226|7 years ago|reply
[+] [-] kwhitefoot|7 years ago|reply
EV's have already taken off. It's only a matter of time before the fossil fuelled car business is just a niche product.
[+] [-] mcv|7 years ago|reply
But Elon Musk has said that that's what he wants. He doesn't want Tesla to win, he wants EVs to win. That's one of the things I admire about him.
But be acting flaky and irresponsible, and picking stupid fights, he's undermining people's confidence in Elon Musk, which reflects on his companies, and possibly on his product: EVs. I think it would be much better for his companies and for EVs in general if he ran his companies in a responsible and reliable manner, and he didn't pick stupid fights.
[+] [-] manicdee|7 years ago|reply
Or Musk just doesn’t give a damn about the SEC considering they take his tweets more seriously than the deliberate market manipulation practised daily by various publications in concert with big investors.
Maybe Musk feels that spaceflight to Mars is so close that he can afford to thumb his nose at US regulators because he will just move to Mars where they have no reach.
[+] [-] techslave|7 years ago|reply
What’s surprising about it?
[+] [-] appsonify|7 years ago|reply
He doesn't want to admit he fucked up and failed because it would cast doubt on all his other half-baked ideas.
Tesla will definitely feel the pressure from other car manufacturers, but so far it has nothing much to worry about as the only really viable game changer as of now is the Hyundai Kona Electric. The new Audi e-tron was promising but ruined it with using electric mirrors which require your eyes to focus on far objects and near objects unlike a normal mirror, and heavy steel frame, which pretty much negates any excellent regen (due to heavy weight).
The Jaguar i-Pace is also a good alternative, but I feel like Hyundai's Kona E is an unbeatable value. Forget Chevy Bolt & Nissan Leaf....garbage.
The model 3 is seriously bad....did you see the interior? it's empty....its completely void apart from the giant tablet thing....the price is it's killing point.....now that there are are viable alternatives.
[+] [-] krick|7 years ago|reply
[+] [-] Gibbon1|7 years ago|reply
[+] [-] api|7 years ago|reply
[+] [-] thanatropism|7 years ago|reply
[+] [-] unknown|7 years ago|reply
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[+] [-] valtism|7 years ago|reply
[+] [-] uptownfunk|7 years ago|reply
Yeah they may pump out a few more Model X's, S's, 3's with some minor mods, keep milking the cow (if it even is a cow, maybe a potential cow, and also if they can even get to a point where they can scale) and eventually... who knows? The scale problem hasn't even been solved yet. You're not going to find another leader with that much raw energy, intellect, drive, and passion who's going to have a chance at bringing us to that reality even close to as quick as Musk can.
My only concern with the whole show is, can anyone (particularly seasoned auto veterans) stand to work with him long enough for the scale and production problems be addressed. As well as iron out all the wrinkles with the designs (some notoriously faulty parts which take quite a long time to fix sometimes..)
[+] [-] smallgovt|7 years ago|reply
What confuses me is that TSLA's price hasn't suffered. I have a hunch this isn't as serious of a matter as is being reported, but I'm not sure why.
[+] [-] sonnyblarney|7 years ago|reply
He's not yet used to the idea he has to be hyper specific with some data.
He's a showman, a salesperson, he's always going to err on the positive.
Constantly pitching, selling.
It's the SEC etc. that care about very specific details that could affect the company.
So while you're right - as a CEO has has 'no excuse' - the fact he would do it makes perfect sense.
I don't think he's trolling anyone, he's the same as he ever was, probably under a lot of stress, a little manic, and avoiding what he probably thinks is the narrow confines of corporate culture and language.
[+] [-] sangnoir|7 years ago|reply
If I'm to speculate, it's because last time Tesla tangoed with the SEC, it got a slap on the wrist. Perhaps the market is expecting more of the same.
Tangentally - I don't know how common this belief is, but Matt Levine in his newsletter argued that the best way the SEC could protect Tesla's shareholders is to not get rid of Elon Musk regardless of his behaviour. I'm not saying that is Levine's belief - it might have been a thought experiment - and I disagree wholeheartedly with it because it doesn't consider 2nd order effects on CEO behaviour against a powerless SEC and how this would impact other non-Tesla shareholders.
[+] [-] macinjosh|7 years ago|reply
[+] [-] anth_anm|7 years ago|reply
He flagrantly violated that condition of his settlement. That's what makes it a big deal.
[+] [-] xvf22|7 years ago|reply
[+] [-] paulsutter|7 years ago|reply
The legacy manufacturers have all caught the bug, batteries are achieving mass scale in China, and electric vehicles have irreversible momentum.
Mission accomplished.
[+] [-] aeternus|7 years ago|reply
https://twitter.com/elonmusk/status/1005577738332172289
[+] [-] unknown|7 years ago|reply
[deleted]
[+] [-] anth_anm|7 years ago|reply
[+] [-] 11thEarlOfMar|7 years ago|reply
In his mind, he was treated 'super unfairly' by bullies while the guardians stood by and did nothing. He really dislikes them for that.
Is his open disrespect a mature response? No. It's idealistic if not naive and he could be about to find out that the SEC does have teeth.
[0] https://www.theregister.co.uk/2000/10/25/inside_the_ms_trial... (sorry, couldn't find a better source)
[1] ?
"The SEC similarly should be leading the charge against purveyors of short-and-distort schemes. Unfortunately, the commission inexplicably has been reluctant to do so.Just like a pump-and-dump, a short-and-distort scheme violates the Securities Exchange Act antifraud provisions, as well as SEC Rule 10b-5. In fact, it has brought hardly any enforcement actions targeting this conduct."
[+] [-] mikejb|7 years ago|reply
Maybe this is the link you wanted to post (contains the quote you posted):
https://www.dlapiper.com/~/media/files/people/weiner-perrie/...
[+] [-] anth_anm|7 years ago|reply
He lied to investors to pump the stock. It was blatant.
[+] [-] Tomminn|7 years ago|reply
Operator
Thank you. Our next question is from Colin Rusch with Oppenheimer.
Colin Rusch
Thanks so much. Can you talk a little bit about the geographic dispersion for the guidance for 2019, where you're expecting the Model 3s to sell through as well as the other models?
Elon Musk
Well, I think we did, actually. Yes, it's clear in our letter.
Deepak Ahuja
We indicated in Q1, we will start delivering Model 3s in Europe and China. And we also shared a chart showing the potential market size for midsized premium sedans in North America, Europe and Asia, suggesting those markets could be even bigger. So I think that gives a good sense of where we'll be. And we'll launch the right-hand drive version at some point to go to the other markets.
Elon Musk
Yes. Maybe in the order of 350,000 to 500,000 Model 3s, something like that this year.
[+] [-] thaumasiotes|7 years ago|reply
> probably what will happen is that Musk will go to court and the judge will yell at him and he will say he’s sorry and then six minutes later he’ll tweet “my fingers were crossed and I am NOT sorry” and he’ll go on TV that night and be like “you know what I have contempt for? Court,” and everyone will just be like “ehhhhhhhhhh good enough.”
( https://www.bloomberg.com/opinion/articles/2019-02-26/elon-m... )
[+] [-] LiquidSky|7 years ago|reply
[+] [-] iamcreasy|7 years ago|reply
I would not trust Matt Levine on this.
[+] [-] tranchms|7 years ago|reply
The battery pack alone costs more than $20k.
Tesla can’t produce that car for $15k and make a profit.
Gigafactory Battery production is expected to continue ramping up, with higher throughput lines, but operating costs are still exorbitant, and battery production is barely breaking even at current production. In fact, from what I know they’re in the red.
I don’t see a $35k Model 3 until battery production costs cut in half, which I won’t expect for another 3-5 years.
I know Tesla is beginning to manufacture it’s own batteries, but to be honest, I don’t see them succeeding.
[+] [-] vgchh|7 years ago|reply
I also hope that SEC would maintains an objective view of the issue and not get offended at the lack of respect from Musk.
Finally, I would love for Tesla to continue to thrive under Musk's leadership, unless he continues to shoot himself in his foot.
[+] [-] api|7 years ago|reply
[+] [-] aboutruby|7 years ago|reply
[+] [-] ceejayoz|7 years ago|reply
https://www.economist.com/business/2018/09/28/the-sec-threat...
[+] [-] anth_anm|7 years ago|reply
That and they have about a billion dollars in debt coming due in a few days. Gotta keep that distraction going.
[+] [-] baby|7 years ago|reply
[+] [-] LiquidSky|7 years ago|reply
He's done all of this to himself, and he can't seem to stop.
[+] [-] justin66|7 years ago|reply
You know. Them.
[+] [-] mikestew|7 years ago|reply
[+] [-] fwip|7 years ago|reply
[+] [-] colordrops|7 years ago|reply
https://www.tesla.com/blog/most-peculiar-test-drive
He's got the military industrial complex against him with SpaceX, and the oil and car industries against him with Tesla. It doesn't get more imposing than that.
[+] [-] porpoisely|7 years ago|reply
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[+] [-] Calashle0202|7 years ago|reply
[+] [-] ddtaylor|7 years ago|reply
[+] [-] brian000|7 years ago|reply