- Tesla has gone through multiple layoffs over the past few months and is planning to close some of its retail stores.
- Despite releasing the Model 3 and Model Y, Tesla is still having trouble figuring out demand and production.
- Elon Musk and the Security and Exchange Commission are going through legal battles over Musk’s tweets.
- A few former Tesla employees have also filed whistleblowing tips to the SEC against Tesla.
Following is a transcript of the video.
Elon Musk: So there you have the sexy presentation.
Mark Matousek: You could argue that a lot of Tesla’s problems come from Elon Musk’s ambition and his disregard for social or business norms.
Audience member: I like the shoes!
Matousek: So on the one hand, these qualities have contributed to Tesla being much more successful than I think a lot of people would’ve predicted 10 to 15 years ago.
Musk: Hey, everyone!
Matousek: But the flip side of that coin is that Tesla might have a product roadmap that is unsustainable and that Elon Musk just can’t make this transition from scrappy, ambitious start-up CEO to a more measured, more disciplined CEO of a company that, now, its priority is more operations and competence than selling people on its potential.
A lot’s going on with Tesla right now. There’s good, there’s bad, and it can be difficult to make sense of which is dominant.
Over the past year, Tesla has undergone three rounds of layoffs. After this first round of layoffs last June, Elon Musk said in an email, or he strongly suggested, that they’re making these cuts now so they’d never have to do it again. But then in January, they made another round of layoffs, and then at the end of February and the beginning of March when they announced that they were going to close some stores, they said that would also lead to layoffs.
Tesla and the SEC have been at odds over the past year. In August of last year, Elon Musk said he basically had a deal to take Tesla private. The SEC basically disagreed and sued him. The two eventually reached a settlement. Part of that settlement requires Elon Musk to have all communications that could be relevant to investors reviewed by someone at Tesla before he makes them public. And recently, he tweeted a projection about Tesla’s vehicle production for this year. Now, he sent out a corrected tweet shortly thereafter, but the SEC asked the judge to hold Elon Musk in contempt because they’re saying that Elon did not get pre-approval.
So over the past year, there have been three former Tesla employees who have filed whistleblowing tips with the SEC, which basically means these employees are saying that, “We have seen wrongdoing at the company, and we want the government to know about it.” But now Tesla has denied all of these things, and we haven’t seen any hard evidence of this, but this certainly raises questions for the company.
So how is Tesla gonna be looking the rest of 2019? That is the million dollar question.
On the one hand, they finally introduced the $35,000 version of Model 3, which has been one of their primary goals going back to 2006. On the other hand, they’re closing a lot of retail stores, there’s questions about where they’re going to build the Model Y and the Semi. Questions about Elon Musk’s behavior. It’s tough to tell. There’s a range of possibilities for how this year’s gonna turn out for Tesla. Right now, it’s difficult to tell how things are going to shake out.
Worst-case scenario: Model 3 and I guess overall vehicle demand is not as high as they’d hoped, Elon Musk’s behavior and legal battles with the SEC, serious consequences, and his behavior becomes even a bigger distraction for the company while it deals with softening demands and inability to hit its financial targets.
Best-case scenario for Tesla: Model 3 demand stays high or even increases with the introduction of lower-priced versions, fully ironed out all the kinks in production, profitability keeps growing over the course of the year, Elon Musk’s legal battles with the SEC sort of die down without any major consequences for him. You know, he sort of reins in his behavior and doesn’t create any more distractions for Tesla, and at the end of 2019, this becomes a pivotal year for Tesla and a very successful one both financially and in terms of their public image.
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