Baillie Gifford, Director, Talks Elon Musk, Tesla and Kodak

November 12, 2018 by Steve Hanley

Baillie Gifford is an investment management company established in Edinburgh, Scotland in 1908, where it is still headquartered. It currently manages badets valued at nearly $ 200 billion for its clients. It is also the third largest shareholder of Tesla with over 13 million shares. At current prices, its stake in the company is about $ 5 billion. Recently, Nick Thomas, one of Baillie Gifford's 44 active partners, told the press that his company would be willing to invest more in Tesla if the need made it felt.

Tweets of Elon

Iain McCombie is the partner responsible for the Baillie Gifford Managed Fund. He had a few things to say about Elon Musk and the future of the auto industry. Unless you lived in a cabin in the woods without access to the Internet, you know that Musk is under fire from critics for tweeting in August that he was considering privatizing Tesla and that he had already organized the funding to get there.

The SEC was not amused and sued Musk, claiming that his statement had unduly influenced the price of Tesla shares, which Musk strongly denied. Nevertheless, Musk and Tesla each agreed to pay a $ 20 million fine to settle the lawsuit, a cost Musk said later was "totally worth it." Asked about Musk and his activities on Twitter, McCombie acknowledged that they "are a giant distraction." not an approval. "They are annoying and I hope he does not," added McCombie, according to a report by Yahoo! Finance.

He then defended Musk, saying, "You may not like Musk, and I do not tolerate what he did, but you can not deny that he did some pretty remarkable things. And that is often what many entrepreneurs look like. They are eccentric, they are not all in the cup of tea and defy the conventional wisdom. "He thinks that if Henry Ford had access to Twitter, Musk's tweets" would be rather clear in comparison. "

The moment Kodak

McCombie says that he thinks that traditional car manufacturers may experience "Kodak moments". "What happened with Kodak is what happened, they discovered the digital camera, but they buried it because it was too scary for them. They thought it would kill their movie business. But the fact that they did not innovate killed Kodak. (Innovation is the best way to succeed, according to Tesla – and everyone else – according to Tesla CEO Elon Musk.)

For McCombie, it's amazing that Tesla is now ahead of Mercedes-Benz in the US market. "Now, Daimler has been on the market for over 100 years and here is what started and is selling better in the United States. If you had said that a few years ago, you would probably have been locked up, but that's what's going on. "

What Tesla does, is partly because of the "Musk genius" and partly because of the inability of traditional builders to adapt to changing market conditions. "They have spent hundreds of years developing their expertise in industrial combustion engines and they have done an excellent job in this area. But what will happen if we suddenly say, "Oh, I want an electric car"? Suddenly, this skill is useless, "he says.

"They may be launching electric vehicles, but the bulk of their sales still come from traditional products. They have built wonderful businesses for themselves, but what happens when the business evolves? That's why your Tesla is exciting because it does not have these inherited problems. We do not believe that Tesla owns the market: we expect other people to come to the market. But we think the market will grow dramatically. "

There is a lot of risk and "we could always be wrong," admits McCombie. But when a company with $ 200 billion in badets under management makes statements like this, there is a good chance that its executives will know something about risk and cautious investments.

Here has CleanTechnicaFor years, we've been saying that traditional automakers are at risk of bankruptcy, no matter how many vehicles they sold last year or in the last decade or even century. Today, only two automakers in the United States have ever gone bankrupt, Tesla and Ford. If you own a crystal ball, ask him which company is most likely to implode in the same way as Kodak. Hint: it starts with an "F."

Keywords: automobile industry, car manufacturers, Baillie Gifford, Elon Musk, Ford, Iain McCombie, Kodak moment, Tesla, Tesla stock

About the author

Steve Hanley Steve writes about the interface between technology and sustainability from his home in Rhode Island and wherever the singularity could take him. Charles Kuralt is his muse. "I see the road is turning, I wonder what's going on around the turn?"

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