Can Tesla survive without Elon Musk?

Tesla is synonymous with its world-renowned CEO, Elon Musk.

But the SEC wants to ban Musk from running Tesla, or any other publicly traded company, alleging in a lawsuit filed on Thursday that it had misled investors and the public when it tweeted in August. Now the question is to know if the manufacturer of electric cars can survive without him. And the billionaire entrepreneur, whose public image and personal wealth are closely related to the company, can it survive without Tesla?

Analysts say it's entirely possible that Palo Alto will continue without Musk, while some of them have changed their ratings and lowered their price targets, plunging the company's shares Friday by almost 14% at $ 264.77.

But Tesla would not be the same without him, they are in agreement.

"The presence of Musk is why the stock is trading at high levels," said Garrett Nelson, an analyst at Tesla at CFRA. "The closest analogy I can do is with Apple and Steve Jobs. What would Apple have become without it 10 or 15 years ago?

Tesla would not have become what she is without Musk, that's for sure. In addition to deciding that it was time for electric cars to come to the aid of American automakers, he brought Tesla back to the brink of death about ten years ago by combining the money. government contracts with his other. company, SpaceX, Tesla's existing investors and others. At this year's South by Southwest conference, Musk recounted how heartbreaking 2008 was, according to his biography, the year he spent his last million and divorced: "SpaceX is alive, Tesla too. – If things had just deviated a little, the two companies would have died. "

Musk is in this unique situation – it is not unprecedented, but it is rare that the Securities and Exchange Commission forbids executives to exercise public companies – because of its "strong personality", as Karl wrote. Brauer. Friday.

Musk's personality and drive also helped Tesla pave the way for a future in electric vehicles. Now, other automakers are deploying their electric vehicles.

"BMW, Audi, Jaguar … (Tesla) are facing increased competition over the next few years," Nelson said. This means that Musk's problems with regulators and the law – he may also be confronted with a criminal investigation by the Justice Department – could not have come at a worse time.

In addition to the competition it faces, Tesla faces challenges.

"If this problem (Musk) was resolved this afternoon, there would be plenty more," said Brauer. "It's a massive distraction for a company that already had a lot to do."

A big point on the to-do list: The production and delivery of Model 3, its newest and most affordable vehicle, has experienced delays and problems.

"This is the production of the 3, its output and its profitability," said Friday the automotive analyst Efraim Levy. "This is the key to the survival of society without Elon Musk."

Levy thinks that there is a team capable of keeping the company, even though Musk was not at the helm, despite the lack of a director of operations or a clear number 2, or the departure of a few dozen executives and leaders. in the last two years.

In addition, Tesla fans are loyal. "We have seen for years how much the fans of the brand are patient," said Levy.

Whatever the strength of the brand, the uncertainty surrounding the company's 15-year-old leadership could continue to weigh on its stock. CFRA, for example, downgraded its credit rating to sell on Friday morning and lowered its 12-month price target from $ 265 to $ 225.

CFRA analyst Nelson said he thought Musk had missed an opportunity by not accepting an agreement with the SEC that would have allowed him to remain Tesla's CEO. According to some media reports, Musk pulled out of the settlement on Thursday morning because he did not want the stigma attached to a settlement.

The SEC's proposed settlement, which the SEC spokesperson would not confirm Friday, also called for the appointment of two new board members and prevented Musk from serving as president for two years.

Investors were concerned about corporate governance, Nelson said. "(Musk) tweeted, made podcasts," he said. "It must be one hundred percent on delivery."

Tesla has not responded to several requests for comments. But Thursday night, the board issued this statement: "Tesla and the board of directors have full faith in Elon, its integrity and leadership in the company.

Analysts agree that further losses in its stock and market value could open up the company to become a target of acquisition. Among the companies mentioned as potential buyers: Apple, Baidu, Tencent, Mercedes or General Motors.