Musk Distracts with Twitter Stake

The Information’s headline late yesterday hints at mysterious motivations behind Tesla CEO Elon Musk’s acquisition of a 9.2% stake in Twitter making him the largest shareholder.?The correspondent unfolds three potential interpretive scenarios and even obsesses over what individual or entity sold him the stake in the first place.

This story misses the point of the much BIGGER story that unfolded over the weekend after the close of the first quarter.?Tesla reported that it produced 305,407 vehicles and delivered 310,048 – compared to producing 180,338 vehicles and delivering 184,800 in the year-ago quarter.

Analysts highlighted the 4,641-vehicle delta between vehicles delivered vs. the number produced – a reflection of the supply chain strains facing the company, they said.?Analysts also noted the months-long waiting list of new Tesla buyers with wait times growing.

Tesla watcher Electrek.co had weeks-earlier reported on the long customer waits for Tesla deliveries in a story which pointed out that Tesla was accelerating deliveries by as much as four months for customers ordering the $12,000 full-self-driving beta with their purchase.?The Electrek story expanded on the supply chain issues facing Tesla by adding that customers who ordered Gemini Wheels would delay their delivery by several months.

If you’re working for a so-called “legacy” auto maker – like Toyota or Ford or BMW or Chevrolet – you could care less about Elon Musk taking a 9.2% stake in Twitter.?You are way more worried about an auto maker building cars to order with a pipeline stretching into the next year.?U.S. first quarter sales slid for most of the leading brands including GM (down 20%) and Toyota (down 14.7%).

Analysts keep looking for the cloud to wrap around Tesla’s silver lining.?Tesla’s production and deliveries are up massively – as it opens a new factory (Berlin) while building another (Austin, TX).?Competitors, meanwhile, are mainly idling factories.

Regulators and skeptics keep pointing to the very obvious limitations of Tesla’s full-self-driving technology – with an ample supply of embarrassing Youtube videos to support their grievances.?But, for me, it still comes down to the little things.

Tesla has overcome its supply chain challenges by leveraging its greatest competitive strength – over the air software updates.?If the customer buys into the full-self-driving dream, and the software updates needed to support and deliver it, Tesla will shorten the wait for the delivery of that new car.

Further fueling the enthusiasm for buying a Tesla today rather than tomorrow is the fact that Tesla prices are not-so-subtly on the rise.?The longer you wait, the more expensive your purchase will become.?Best get your order in now.

It comes down to a simple technology equation of leveraging software AND cameras. ?The eight cameras on a Tesla Model Y, for example, enable enhanced driving capabilities – while simultaneously creating controversy due to their self-driving limitations.?There’s no doubt that Teslas needs more than sensors to deliver on their promise of full self driving.

At the same time, though, those cameras provide a passive Sentry Mode function unmatched by any Western auto maker to date.?Walk close to or try to touch a Tesla on the street and you will find yourself captured on video with a notification sent to the vehicle owner.?That’s a customer-centric value add “vision” that other auto makers would do well to emulate.

For competing auto makers, supply chain woes and car shortages are driving up prices and profits for new car dealers.?A report in the New York Times over the weekend highlighted a reality defined by a mad scramble for new and used cars and record profits.?Legacy auto makers are struggling.?Dealers are fat, dumb, and happy – if a little harried.?

And Elon Musk – with an overflowing order book – has bought a 9.2% stake in Twitter a few weeks ahead of his latest earnings report.?Sounds like a bit of misdirection to me - or maybe a money-making opportunity.?The auto industry needs to focus on its own execution and delivery, not flying squirrels.

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