Now another situation where Elon Musk World changing requires total commitment

Tesla built 180 Tesla model 3 cars in October for a total of 440 over the last few months. Telsa main goal to produce 5,000 vehicles per week at some point in December. Tesla was supposed to start deliveries to regular customers in “late October”, but this will likely be delayed in Q1 of 2018.

Telsa is spending $1 billion per quarter on its business.

The pre-selling of electric trucks and the new Roadster could bring in $250 million. Basically they are super-sized crowdfunding.

A normal company might need to sell shares or bonds on poor terms in the first half of 2018 in order to meet a cash shortfall.

Elon Musk has shown that he is a true believer in his businesses and has been willing in the past to put his entire personal fortune at risk in order to help his companies over existential risks. Therefore, if Tesla gets pushed to the wall, Elon will double down and put his own resources in to bridge the gap. Elon will be able give Tesla into 2019 to resolve production issues for the Model 3. Those are the financial and production risks. There is the other side which is maintaining and building customer interest in the Model 3.

Tesla has many smart people. They are definitely working night and day and weekends to fix the Model 3 production issues.

Changing the world is hard. Overcoming these problems will be another example where it will be seen that achieving success for electric cars or reusable rockets required not just a great business person but someone with total commitment.

69 thoughts on “Now another situation where Elon Musk World changing requires total commitment”

  1. I admire what Tesla is doing but I can’t help but feel he has his fingers in too many pies. Why can’t he just concentrate on EVs and finish off what he’s started. If I was Tesla this would be my game plan:

    1) Demonstrate an EV that’s comparable to an ICEV – Done via roadster, Model S/X/3
    2) Mass produce – pending
    3) Make cars fully autonomous – pending

    If we have cheap EVs that operate autonomously this will go a long way in solving traffic problems. I don’t know what the numbers are but I suspect we could easily increase current road capacity by 3x if we had the means.

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    • The core competence of Elon Musk is PR, all his ventures rely other people’s technology, he cannot move forward until somebody else has moved forward. Besides R&D needs deep pocket and stays focused, it does not bring Elon Musk fame and glory, so you have it an entrepreneur having his fingers in too many lies.

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  2. “The pre-selling of electric trucks and the new Roadster could bring in $250 million. Basically they are super-sized crowdfunding” that is wrong. $250 million will come just from selling the 1000 units of signature series roadster which you have to pay entire 250K in order to reserve. You have to pay 50K to reserve basic $200K model. Assuming 5000 reservations of basic roadster gives you another $250 million. I don’t think he will get much out of the truck reservations. . So we are looking at about $500 millions.

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  3. Tesla has almost achieved its main objective for its existence. It came about to show that it is possible to have transport in a sustainable way without sacrifices. Five years ago almost no other car manufacture was talking about electrifying their cars. Now they almost all are. VW – the largest of them all – just announced to invest billions in electric cars. I bet they would have not done that for Tesla showing them the way.

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    • Tesla should have come out with the semi before doing the Model 3. They should have kept with this high-end niche stuff longer before risking their brand on mass-production he’ll.

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      • This.

        Going downmarket is the biggest risk to Tesla’s short term future.

        On the other hand, if Musk’s real motivation was to drive other manufacturers to adopt EVs, then the move downmarket was necessary.

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    • When you only read western media it does sound like only the American is doing something to resure the world just like their colonial imperialists who believed there was no culture beyond their borders, in fact electric automobiles have been selling by the millions in the other part of the world, Tesla is only claiming reinventing the wheel.

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      • Tesla required significant government funds to make this solution work. Only America is stupid enough to pay him $7,500 per car to build electric cars when they could have bought ones already in production from the rest of the world.

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  4. Build it in Mexico; avoid unions at all cost. This isn’t 1910. American-made is a nice idea, but not really worth the trouble. And this guy is trying it in California? Palo Alto? Not wise. Personally I hope the brand survives.

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  5. Musk does seem to have a bit of that ADHD going on, so that he likes to chase different shiny things. He’s got multiple cutting-edge businesses going on, none of which are getting 100% of his attention. I’m wondering what happens when Blue Origin get their New Glenn orbital rocket flying – it might take considerable glare off SpaceX’s sheen. Even if SpaceX comes out with BFR, there’s always the chance that New Armstrong will soon catch up.

    Since Tesla is going up against already established major auto giants, at some point Musk’s gambling is also going to catch up with him and his luck will run out.

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      • Please explain how is that applicable? Because all you fanboys will answer any serious comments with ‘Elon is a god and whatever you achieve in a year he can achieve in seconds’ and you don’t even know what the guy is doing in his private time… Please tell me then : how is 60 minuttes of Elon time more productive than 10 hours of my time? Really. Practically. Because he has more money? That is not productive. Give me 1Bn capital to invest and then we will see who is more cutting edge, pionneering and productive… according to your terms.

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    • Why does it always have to be a zero-sum game?

      First, Musk stated several times that the only reason he went into the rocket industry was because there was not a single company which allowed him to take his cargo to Mars and because he did not see any positive trend in the industry. I think that the more competition (i.e. more companies offering LEO capacity for a low price), the happier he would be. I don’t think he started a rocket company and a car company to get rich – this would have been much easier to achieve if he had stayed in the ICT industry.

      Second, if these companies manage to lower the cost by say 50-90%, the market is expected to be much bigger. In a growing market, you can still grow your business in absolute terms, even if you lose market share.
      I don’t think that anything will happen if there are two players with reusable rockets in the market.

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  6. Why did Musk very publicly fire hundreds of valuable Tesla employees while acknowledging Tesla was in “production hell”? There has been repeated mention on the web about poor treatment of Tesla employees who wanted to unionize, making “production hell” a self-fulfilling statement. Not exactly a rational management style, and perhaps there are other factors, but this looks pretty bad. Meanwhile, BMW, GM, Daimler and other car companies are gearing up for literally *millions* of EV sales in the next three years. Finally, there’s the untimely introduction of a new “roadster” model, and AND a electric semi with 40 ton payload. The model 3 has about the same performance as model S, so it will cannibalize sales. Get it together, Elon, no one wants you to fail except the shorts but it’s becoming difficult to continue having faith.

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    • It’s refreshing that a lot of people here are posting the same kind of critical comments about Tesla and Musk that I have for years now. If you did this in the not so distant past people would jump all over you. It’s funny to see how fast people are losing their rose tinted glasses. I actually don’t want to see Tesla fail, I just want to see them act in a more rational manner and I want to see Musk’s ego get put in check.

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      • If that thing you call ego were checked he would fail to do things like the total commitment described above and demonstrated previously in other instances of near failure.

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        • Having a big ego might have also caused him to be so aggressive with the Model 3 that he bet his company on it. Also, some of the more eccentric design decisions made on his cars seem to be based on little more than his whims. His ego sounds so big that I doubt he is getting meaningful push back when he proposes something like gull wing doors.

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    • Tesla reminds me of a Spanish gunmaker Diarm (sp?) a few decades ago, impressive models for advertising but not enough production for the market. Yeah, it died too.

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    • Unionization is a silly idea. The employees aren’t supposed to run the company, the owners are.
      That’s the definition of ownership. You get to decide what to do with your resources, not someone else.

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      • Hey Rip van Winkle time to wake up you’ve slept thru the industrial age you should look up “unionization” it will help you understand why there are unions

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          • Unions is the reason the start pay for a factory worker is around $25-30 an hour in Denmark and the reason they have one of the highest standard of living. In DK, the unions and the employers work together most of the time, it’s just two different interest groups. And there’s virtually no unemployment in Denmark atm.

          • I’ve worked as a salaried employee among blue collar union workers my entire 20-year career. Engineers aren’t typically unionized. This isn’t 1910; this isn’t Sinclair’s Jungle. The pendulum has swung the other way and now unions reduce efficiency and cause wage inflation. The unions are one of a couple of reasons most of the factories have moved off us soil. Musk should build the factory in a foreign country or in a right-to-work state. He should also sell the company to Toyota or Honda after he produces the 3 Series for one year. Leave the manufacturing up to the professionals. You made your point Elon, now get out while you still got a dime in your pocket.

        • And the fact that they’re doing terribly everywhere they can’t force workers to join them ought to make you understand something, too: Belonging to a union is much better than working for a *pre-unionization* company without one, but the very fact of unions’ existence was enough to force employers to behave differently.

          Unionization, like nuclear weapons, is best deployed as a threat. If you actually go ahead and do it, both sides suffer.

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      • That’s not the purpose of a union. The purpose of a union is for workers to band together and collectively bargain for better working conditions. If a factory employs (for example) 3000 workers, and ONE worker stands up and says, “The pay here isn’t fair, I want a better deal.”, he or she can be fired easily without much difficulty. And that applies to all workers, even if all 3000 workers want a better deal, if they ask for one as an individual, they can be dealt with easily.

        But if all 3000 workers ask for a better deal at the same time, well, you can’t fire all 3000 workers can you? Not at once anyway.

        It’s how small powerless people band together to avoid being ripped off by those with all the money and power.

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        • Nope, pay is set by supply and demand and marginal productivity. It’s not possible to pay someone more than the value they add to the company.

          If you pay them more than they are worth you’ll lose money by employing them.
          If you pay them much less than they are worth an other employer will outbid you and they’ll quit.

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        • Supply and demand will set a fair price for salary. Unions make the companies less efficient and less competitive. Tesla doesn’t need that. And who is to say there are no Russian money or GM or anybody else trying to kill tesla involved? I posted here some news about Russian trolls supporting all kind of US damaging processes like Calexit.

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    • ” Why did Musk very publicly fire hundreds of valuable Tesla employees while acknowledging Tesla was in “production hell”? ” <– Because the bottom 3% weren't that valuable.

      " Not exactly a rational management style " <– Perfectly rational when you understand reality.

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    • In theory all car companies could do what Tesla does, yes. But in practice they mostly haven’t been doing this (yet anyway). In order to beat Tesla they have to start innovating like Tesla, which is probably not as easy as it might seem.

      Just copying Tesla won’t do as then you’ll always be a step behind.

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      • GM built and leased EV-1 over 20 years ago so it’s business decisions not a lack of technical innovations that get in the way of them building EVs.

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        • Well, if you don’t bring it to market then it really doesn’t count, does it?

          While the EV-1 seemed to be popular by the users it either wasn’t feasible to produce profitably or GM thought they wouldn’t be able to sell them. Tesla is selling everything they produce.

          A better comparison today is of course the Chevy Bolt, which seems to be a half decent product but in general, but clearly significantly behind the Model 3 in performance, styling and innovation.

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          • GM shut down an assembly line of the volt for a couple of weeks do to poor sales.Like you said the volt is a good car but the public is not buying. they don’t want to plug they car in at night or watch how many miles they have left or……

          • Hmmm… for the Bolt they’ve managed to fit a compact car interior into something the size of a subcompact so that’s pretty innovative if you are in an urban setting and need to park it. 😉 Also, they’ve geared the motor to optimize for passing power, not drag racing. By the way, the charging port is in front where it belongs (Tesla was nuts for putting it in a tail light.)

  7. I really, really hope he has things set up so that Tesla can’t drag down SpaceX; Tesla is producing rich people’s toys, that only look competative because of subsidies. SpaceX is changing the world. It would be a tragedy on a world-historic level if Tesla were to take SpaceX with it when it dies. (As it’s likely to do if the subsidies are ever taken away.)

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    • Tesla already changed the world a lot, maybe more than SpaceX. Many countries are now committed to ban diesel and gas cars between 2030 and 2040. The oil prices are much lower than they used to be (changing some areas like middle East tremendously), the price of batteries is decreasing at an incredible pace, which is beginning to make renewables a real alternative to fossil fuel. All of this is related to Tesla. Without Tesla, those changes may have happened, but maybe 10 or 15 years later, which is a complete game changer.
      But maybe the most important thing is that Tesla is the first attempt for a startup and the tech world to challenge industries which were not supposed to be challengeable, beyond the internet and virtual sphere. If you see so many startups today, disrupting entire industries in all domains, (including supersonic jet with the startup boom), this is probably a legacy from Tesla too. If you can disrupt the temple of the old industrial world, the most capitalized industry ever, the motor industry, you can disrupt everything.
      Finally, Tesla is also the attempt to integrate vertically what is supposed to be a symbol of outsourcing. It is also the attempt to make factories with an unprecedented level of automation, “alien dreadnought”-like factories. This is a huge leap forward.
      No, I really do not want Tesla to fail. It would be very sad and have many nasty consequences for the future.

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      • You write that as though electric cars had something to do with the price of oil dropping. Of course, it had nothing to do with it, the amount of oil use electric cars are displacing at this moment is a drop in the ocean. It was purely a result of the Saudi oil cartel failing.

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      • Many countries are now committed to ban diesel and gas cars between 2030 and 2040.

        Committed is a very strong word for “a politician said this would happen far in the future, long after the people promising it would be retired.”

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        • Here in Norway that horizon is only 2025. not too far. I’ve had a model S for three years and it would be very hard to go back to an ICE car. Almost zero cost of upkeep, and with power at about 4 cents a kilowatt hour operating cost are ridiculously cheap as well. the biggest expense is insurance and tires.

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      • Global battery production is several orders of magnitude lower than what would be required for just a couple of medium sized countries to ‘ban diesel and gas cars between 2030 and 2040 and replace them with EV’s. It’s never going to happen. And never mind how dirty and CO2 emissions intensive the battery production is, Musk is a genius visionary! Or is that subsidy farmer?

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    • Most new technologies are “rich people’s toys” when they first arrive on the market, so nothing unusual about this.

      Taking performance into account, Tesla is competitive without subsidies. Name other four door saloons that do zero to sixty in 2.5 seconds at Model S prices.

      If the subsidies are removed, they’ll sell somewhat fewer vehicles and grow somewhat slower, but that’s it.
      When they get Model 3 production sorted they’ll be able to sell as many as they can produce for several years.

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    • SpaceX and Tasla are independent businesses which happen to have an extremely close relationship, for obvious reasons, so either company’s employees freely communicate for mutual help, and they share industrial secrets.

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