After verbal failures: Should Elon Musk stay with Tesla? | 07/30/18

The boss of Tesla Elon Musk often moves to the limit of the reasonable. After his verbal exchange with one of the Thai rescue divers, the question of his future is becoming stronger.

"I think we have become a real automotive company", is delighted by Elon Musk Tesla was able to reach the production target of 5000 Model 3 for the first time in early July. In addition, the loss-making electric cars company is targeting the profit zone for the third and fourth quarters. But although Tesla's boss, Elon Musk, has reason to celebrate in the face of these successes, he faces a mountain of problems – many of them himself.

Musk's failures on Twitter

Tesla's numerous failures and delays seem to have also marked the charismatic business leader: he has recently reacted very slightly to criticism.

The most recent example is his tweets, which are directed against the British Vern Unsworth. The diver living part of the year in Thailand was involved in the successful rescue of twelve boys and their trainer, who were locked in a cave in Thailand for 17 days. Musk's offer to rescue the football team with a mini-submarine was criticized by the spelunker as an unrealistic public relations maneuver.

The American billionaire did not let him sit on it, then Unsworth scolded Twitter as a pedophile. Later, he reaffirmed this statement before recalling and removing the tweet. Later apologize to Unsworth followed by Twitter. But the harm remains: Musk shocked many of his supporters and hurt his image a lot.

Elon Musk has a communication problem

But the recent stall was not an isolated case. Discerning financial analysts and critical journalists have also felt anger at the ambitious entrepreneur. Musk, ranked by Forbes magazine as the 25th most powerful person in the world, is also arguing with investors, unions and even state security inspectors.

In addition, the 47-year-old is increasingly criticized for his leadership style. In any case, it is striking that Tesla has lost a lot of employees in important key positions in recent months.

In the past, Musk has been criticized, among other things, for his overly optimistic production goals. According to one indictment, he deliberately misled investors in terms of production capacity. In addition, the accusation of bogging down, had to listen again and again to the animated entrepreneur – in addition to Tesla, he also runs the space company SpaceX and founded with Neuralink, The Boring Company and OpenAI new companies.

Meanwhile, there are even voices calling for the replacement of Tesla's boss. At the June 2018 Annual General Meeting, Musk was confronted with the request to withdraw his position as Chairman of the Board. However, he survived the vote and continues to play the dual role of CEO and President of Tesla.

The Wall Street Journal goes even further, doubting that Musk is the right person to lead an established business. The business paper therefore pleaded for the recruitment of Mary Barra, GM's experienced general manager, and placed them at the head of Tesla.

This is not the first time Musk has lost power. When he co-founded by him the PayPal payment service, the billionaire retired before the acquisition by eBay bloody and silent. However, he remained investor and received 11.7% of the proceeds from the subsequent sale of a total of 1.5 billion US dollars. This money was then used as a foundation to finance Tesla, SpaceX and Co.

Musk's position is hardly threatened

But Musk still has no reason to worry about his position as CEO. This is in part because he owns himself nearly 22% of the voting shares and can also be sure of the support of most other important shareholders.

For Tesla shareholders, however, this also has a positive side: the fact that Elon Musk himself owns nearly 34 million shares of Tesla and has invested a significant portion of his private assets shows, on the one hand, that he believes in the success of the company. Second, how dedicated he is to Tesla.

The commitment of Musk is also reflected in his work ethic. It is said that he works 100 hours a week and usually sleeps in the office. In the last push to reach the production target of 5000 Model 3, the workaholic also spent the night on the floor of the production hall. The expectations that he places on his staff are also high. No wonder he's considered a difficult boss.

In addition, the billionaire works without pay for Tesla. Another business leader would be willing to do it, would be hard to find. However, under a 10-year plan, Musk is eligible for a total astronomical bonus of $ 2.6 billion. However, these payments are tied to a whole series of ambitious goals – i. at. a market capitalization of $ 650 billion – tied. This, too, underscores his dedication and his confidence in the future success of the company.

The Magic of Tesla

Musk's charismatic behavior and his visions that brought Tesla to where the electric car manufacturer is today are crucial to the broad and unshakable confidence of shareholders. Thus, the achievements of Tesla are inextricably linked to the name of Elon Musk. His fans admire him for that and let their star cross a lot. It is undisputed that Tesla would lose much of his brilliance without his boss.

To see the impact of the most significant visionary loss of a company, it is worth looking at Apple. There Steve Jobs left a void. The co-founder and biggest source of ideas died in 2011, but his successor Tim Cook has not been able to bring a product to the market that strikes as the only one in the world. iPhone. Cook is undoubtedly an experienced manager who leads the Group with great success on the economic front. But the hope of a new blockbuster, which serves as the second pillar and the success of Apple also gets fixed far into the future, he could not realize it until here.

Editorial Office finanzen.ch