Can Tesla Be Saved?

I am an admirer of everything Tesla has accomplished, and therefore of what Mr Musk has accomplished, in revolutionising the world's automotive industry by legitimising electric vehicles as mainstream transportation options.? However, the last few months have severely damaged the brand and one has to ask whether or not the company can recover.? My concern is that it cannot.

?

Tesla has a range of problems.? Its models are stale and need refurbishing, it is shrinking in sales volume while its competitors grow, and its core customers are appalled by Mr Musk's embrace of Donald Trump (to say nothing of highly dubious salutes and Twitter endorsements).? What's more, analysts who seek to justify Tesla's share price do so on the premise that its AI developments and robotaxi initiative constitute the vast majority of the current share price and absurd PE multiple.

?

To say the least, the notion that a public company could be valued by supposedly-serious Wall Street analysts primarily on the basis of non-existent or barely nascent technologies (to justify a stratospheric 100+ PA ratio) beggars belief.?And Tesla's established track record of missed goals and failed announcements simply amplifies the dissonance between value and performance.? Investors led astray by sell-side recommendations may have a legal axe to grind as things unfurl should the stock continue to plunge.

?

Then there's the Ubermensch conception of Mr Musk.? He is clearly a remarkable engineer and deserves enormous praise for his engineering achievements.? But as De Gaulle observed, "the graveyards are full of indispensable men."? I expect Mr Musk to be innovating for many years and imagine the shareholders of his many ventures share my sentiment and wish him back at the helm of their investments now, if not yesterday.

?

Instead, he has chosen for reasons I cannot fathom to ally himself with perhaps the most divisive political figure in modern America, surely at least since the days of Father Coughlan. Mr Trump is, undeniably, a remarkably effective politician regardless of how one views his politics.? And Mr Musk is not.? He is making the same cardinal error made in the recent past by Rudy Giuliani, Mitt Romney, and sundry chiefs of staff.? They only matter while they have utility, and then Mr Trump disposes of them, their reputations irredeemably tarnished.? This is the fate that likely awaits Mr Musk and therefore Tesla.

Today (20 March 2025) I read an article about a longstanding Tesla investor and promoter who is said to be exhorting Mr Musk to scale back his work for the Administration and get back to work as CEO of Tesla, aiming to balance the two roles.? All I can say is that this smacks of shutting the stable door after the horse has bolted and a crude description of the proposal is "lunacy."

I cannot see how Tesla, intimately tied to Mr Musk, can repair its fortunes.? Four years ago, I wrote (of Tesla's pros and cons as a business, and starting my list of cons,) "First, having concluded Tesla's strengths with Mr Musk, I have to open with his weaknesses for the company.??Mr Musk is a quixotic individual in his public persona, and while this is part of his value it is also a risk to the company.??Tesla's brand is tied to Mr Musk, who surely understands this, however the brand is also at risk if he misjudges his market and audience.??He strikes me as a person firmly gripping the tiger's tail, yet equally, unable to let go.??This is short-term stable but long-term untenable.??Something has to give here and the consequences could be damaging to Tesla."

?

The original article is here: https://www.dhirubhai.net/pulse/pros-cons-tesla-andrew-matheson/?trackingId=exnQulWPRBajq3%2Ff3ZbglA%3D%3D

?

Sure enough, Mr Musk has left the reservation, so to speak.? And despite what longstanding investors may hope for, there is just no way back.? The brand was strong while it was about the cars.? Now, it is chainsaws and Mr Trump, destruction of civil institutions and possible constitutional crises.? Tesla may survive, but I am afraid it won't thrive.

?

?