Something Wrong with Tesla?
By: Fiorenzo Arcadi & Mike Ambrozwics
Once you cut through the hyperbole and embellishment, Tesla is a mediocre vehicle company at best. When desperation has been confirmed one can only console themselves with amusement indistinguishable from reality. One has to judge the CEO of Tesla with his own inured confirmation that has become inconsequential towards their competitors’ veracious appetite to feed away at Tesla’s dismal market share for electric vehicles.
Innovation and competition are absolute. Those who presume to deal with change must rely on their industrial imagination whereby effective competitiveness becomes a component in the theoretical exercise to be devoured. Ford Motor Company executive Bill Ford Jr. stated, “We’re all in” in regards to the $11 billion investment in electric vehicle technology. Additionally, China committed $21 billion in their own development of electric vehicle technology while Germany followed suit with a $52 billion investment.
Daimler indicated the company would dish out $11.7 billion in maneuvering their business to capture market share from Tesla. Volkswagen has also joined the race with a $40 billion investment to build electrified versions of their 300+ global models. Needless to say, Toyota Motors will spend $13 billion to market 10 electric vehicles while introducing pure battery models in China followed by Japan and the rest of the world. Toyota has also partnered with Mazda and Suzuki in the development of electric cars.
I want to be quite clear; I’m neither a bull nor a bear with respect to Tesla’s stock. However, one has to dissect Elon Musk’s words in his recent earnings call transcript. First of all, Musk sounds more like a promoter than a CEO of a car manufacturer. Many of the reviews of the Tesla Model 3 feature a variety of issues with respect to service, maintenance, and having a trustworthy car on the road. Many of the complaints involved audio, navigation instructions, continuous software reboots, and so on. Most of the issues brought forth by legitimate Tesla owners were counter attacked by unknown users with short statements defending the company and its line of vehicles.
Elon Musk stated, “The Model 3 reviews are outstanding, really couldn’t ask for better reviews from some of the toughest critics in the world.” Then he goes off saying, “And, yeah, I mean, sorry if I sound a little tired. I’ve been working like crazy in the body shop lately, but it’s really going great, super excited.” So now you have this playboy who decreased his workforce by 9000 employees complaining that he’s working too hard? Even former leading engineer of Tesla Doug Field decided to leave the company citing a “leave of absence.” His replacement was Stuart Bowers, and this young kid showed more enthusiasm with a recent statement that calmly notified the public that he is helping Tesla look into new safety features. Not to be outdone, out of the blue, Peter Bannon of Tesla stated, “I’m really excited about exploiting its hardware, I think people are going to come to work at Tesla.”
There may have been a slip of the tongue that was extrapolated by Elon Musk when he told analysts he was sorry if he sounded a little tired since he was at the shop counting cars all day. It’s good to know that the CEO of a car company has nothing better to do than to waste everyone’s time and money to get the job done quickly to satisfy analysts’ upward predictions of Tesla stock. If you take a look at the Tesla workforce, most of the complaints are high hours, low pay, high anxiety, and little to no opportunity for upward mobility and promotion. What Tesla did in terms of getting rid of 9000 workers was show that their fixed costs are diminishing. However yet again, the quality of production streams down the pyramid, even to the showroom whereby Tesla has little to no cars for test drives.
The transcripts become even more troubling. Why would the CEO of Tesla pontificate and illuminate that he is putting his executive team on the spot? For example, Musk keeps repeating the word “sorry”. He indicated, “Sorry if I put you guys on the spot or anything. I think we’re making pretty radical advances in the car software technology and the division beyond that. And yeah, Tesla is in the forefront of autonomous technology.” But then again, Musk never mentioned anything about an UBER self-driving unit involved in a car crash. Musk continually advocates autonomous vehicles as though it’s the golden goose of the new generation that simply wants to tear down human control in operating a machine. It will take many years for engineers to make autonomous vehicles safer, more capable, and more foolproof. It will take even more years to convince regulators in allowing these vehicles on public roads.
It seems to me that Tesla is just an ultimate promoter with acts such as interjecting a car into space for aliens across all galaxies to enjoy. At earnings calls, Elon Musk embellishes facts and figures while his Trojan warriors simply choose to comply with his idiocy. So now it is Tesla engineers building their batteries rather than Panasonic. Musk even indicated that his team is doing such an incredible job, “My team created this, the most advanced computer design specifically for autonomous operations. The current NVIDIA software can do 200 frames a second; this is able to do 2000 frames a second, so super kick-ass, thank you for doing that.” Needless to say, his Trojan warriors thanked him graciously. I doubt it very much that his team actually built this kick-ass computer. Just like the battery packs, Elon Musk and his team try to get credit for everything.
Indeed, the real duplicity towards production was highlighted by Musk’s comment that had to be corrected by one of his Trojan warriors. Musk stated, “There are parts that we thought were right but then turned out that they weren’t right, we got to send them back to suppliers. It just needs to kind of lurch into high pace and there is a lot of lurching, which is very inefficient. So, you have super high labor costs per car and it’s just time to sort to up this giant machine.” One of his warriors shimmied in and gently circumvented what his boss stated, “As Elon said, it’s driven predominantly by manufacturing and cost-efficiency. The labor hours that we use to produce each car become less.”
So which is it Elon? Are your labor costs high or low? Your Trojan warriors are contradicting you. What investors are dealing with is a CEO who wants to colonize Mars to prevent human extinction. On top of that, Musk wants reusable rockets to land back on Earth, which I must say he has been somewhat successful in doing. But then again, you can make a rocket cheaply and not make it reusable. In 6 years, Musk plans to send an astronaut to Mars in his race to compete with Boeing.
It’s no wonder Elon Musk is asking private lenders to fork out $80 billion to take the company private. Even though the Saudis acquired 3% to 5% of Tesla, they weren’t aware that the Insurance Institute for Highway Safety indicated that the Tesla Model 3 was the worst performer tested for automatic braking systems. The institute found that the Tesla Model 3 had a bad habit of decelerating gradually and braking earlier than other tested electric cars. Of course, the multitude of his Trojan warriors from California decided to use the internet and word of mouth to proclaim how great Tesla cars are. The problem with Tesla is their competition who is voraciously feasting on Tesla’s market share. Tesla has become nothing more than a common company, and this is the first time that Elon Musk has to come to terms with his own fantasy.
Sr. Structural Engineer at FAT Services
6 年No
Chief Executive Officer at Sustainable Energy Holdings Ltd.
6 年You should go back and do some research.? What is written does not match what is happening at Tesla. Given Tesla 3 is the #1 electric car sold. And their products are rolling off the Assembly line. Now people start fact checking all media.
Free-lance Writer, Communications Consultant, Media Relations Specialist/Media Trainer
6 年They're run by a dreamer/blowhard who actually BELIEVES his own press clippings!