Will Elon Musk’s masterplan to take Tesla private succeed?


The Tesla logo is seen outside of their showroom in Washington, DC, on 8 August 2018.

The risks and rewards of the tech mogul’s $70bn bid to turn his company into a “reverse unicorn”.

In June 2010, the US tech giant Tesla held its Initial Public Offering, raising $226.1m for the company. With his family and his then wife Talulah Riley surrounding him, and with his fists in the air, it was a good day for the company’s mercurial head Elon Musk.

But since the IPO, Tesla’s road to commercialisation has been strewn with obstacles. The first problem Musk encountered followed the IPO. The aim was to use the funds to plug a financial hole in the company created by its excessive use of cash to prop up the Model S electric car. Eight years later, Tesla is afflicted by similar problems and is burning through $7,430 per minute, this time in a bid to fix the production woes of its mass market Model 3 car.

This has created the impossible dilemma that Musk now faces – does he focus on quarterly profits – becoming a niche company – or on his vision of becoming the king of mass market electric cars? Musk knows what he wants but his automobile dreams are being hampered by the shareholder craving for short-term profits.

Tesla could produce a profit in forthcoming quarters via methods such as reducing its ballooning employee numbers, which have risen from 899 in 2010 to 40,000 today. But Musk is an idealistic visionary who craves more ambitious goals.

Tesla, however, has significant problems: 20 chief executives have departed in just two years, the firm’s autopilot system was found to be faulty and caused crashes including the death of Walter Huang a 38-year-old Apple Inc. engineer; and the company has had a fractious relationship with its shareholders, largely owing …read more

Source:: New Statesman

      

(Visited 1 times, 1 visits today)

Leave a Reply

Your email address will not be published. Required fields are marked *