- Tesla has demanded a lot of patience from investors and fans.
- But Tesla has also reward loyalists and validated an electric-car market.
- Tesla isn’t perfect, but it’s more than OK to like the company and CEO Elon Musk.
- See more stories on Insider’s business page.
Tesla is easily the strangest company I’ve ever covered in my entire career as a journalist. When I wrote my first words about Tesla, it was barely building one car and was desperate for a Department of Energy loan, living on investors’ largesse and Elon Musk’s haul from selling PayPal to eBay.
Everybody in the auto industry thought Tesla would fail, and with good reason: There really hadn’t been a successful new American car brand since Chrysler in the 1930s. And nearly fail Tesla did, barely defying bankruptcy around the time that the financial crisis hit and surviving as nearly every other electric-vehicle startup withered.
Tesla is now the most valuable automaker on Earth by a long shot, with a market capitalization of more than $650 billion. Musk himself is a multi-billionaire and one of the richest people who has ever lived. The company could sell close to a million vehicles in 2021 and is poised to enjoy a boom as the Biden administration and a Democratic-controlled Congress move to pump trillions into remaking the US economy to battle global warming.
Tesla has rewarded its most loyal fans — and early investors
Tesla has obviously come a long way, and stalwart loyalists are justifiably gloating — and not simply because some early investors have posted a staggering return since the company’s relatively modest 2010 IPO (close your eyes, but if you bought then you’d be up over 14,000%). Musk & Co. have validated a global market for electric vehicles and made it safe, sort of, for the traditional auto industry to undertake a massive shift from petroleum to electrons. But they’ve also satisfied the yearnings of anyone who knew that electric cars lost out to gas-burners at the dawn of the 20th century, giving us a century of pollution whose titanic carbon footprint could threaten the human species’ future.
Still, haters gonna hate. And Tesla has racked up quite an enemies list over its roughly two decades. Wall Street short-sellers and internet critics have claimed that the company is a fraud, that it would be tanking were it not for sales of emission credits to other automakers, that it has at times been “structurally unprofitable,” and that it would have failed many times if the government hadn’t offered substantial tax credits to induce wealthy customers to buy its expensive machines.
Apart from the professional naysayers, there are folks who simply can’t stand Elon Musk, who unlike most straight-laced CEOs tends to opine on every newsworthy topic under the sun, often to controversial effect. Witness his views on pedophilia, COVID-19, labor unions, and the SEC. In truth, Musk isn’t terribly humble, but then again, the type of person who risks everything to do something as potentially financially ruinous as starting a car company is rarely a shrinking violet.
In an era when what we might have formerly thought of as boring businesspeople are bona fide celebrities, Musk stands out. His enormous Twitter following means that he can — for better or worse — move markets with his thumbs. He also gets around, traveling by private jet from the San Francisco Bay Area to Los Angeles to Nevada to Texas to Europe to China. His partner, Grimes, is herself a celebrity and a musical innovator (as well as an acquired taste), and together they have a child whose name, “X Æ A-12,” is a summary of the couples’ favorite memes.
Taking the big picture POV on Tesla
I generally try to maintain some perspective on all this. The Wall Street scolds have, for the most part, been completely obliterated by Tesla’s stock-market performance over the past year and a half. But the superfans aren’t innocent. They tend to forget that Tesla hasn’t been able to make an EV that a normal person with normal income can afford. It’s easy to make headlines and obtain rapturous support when you’re selling $100,000 four-door electric road-rockets.
But specifics are often ephemeral. Who remembers the nuts-and-bolts of Henry Ford’s Model T, or the fact that Enzo Ferrari started selling road cars only to fund his racing efforts? Generally speaking, nobody recalls how unsavory most auto entrepreneurs have been.
Zoom out and Tesla becomes a lot more likable. We’ve needed a compelling electric car for, well … forever, and with the Tesla Model S in 2012 we finally got it. Big Auto was disdainful of EVs prior to Tesla’s surge — the late Fiat Chrysler CEO Sergio Marchionne infamously begged customers not to buy his EVs because he lost so much money on them. But now General Motors and Ford have committed to spending almost $60 billion to electrify their fleets over the next 20 years.
It’s OK to like Tesla, then, because the company has done something that’s frankly heroic. And don’t forget, Musk couldn’t do it alone; he has 70,000 people working for him, on assembly lines, in office buildings, and in design studios. Silicon Valley favors companies that can mint billionaires without hiring more than a few thousand people. Tesla has blown that concept wide open by actively trying to hire as many employees as possible.
Here’s how I look at it: Go ahead and despise Musk if you want to. Bet against the stock. Never buy a Tesla vehicle. But don’t force yourself to dislike the company in the process. It’s done what by the standards of American business could only be characterized as objectively great. So take a minute to celebrate, and then go back to complaining. And if you’re a fan, then pat yourself on the back, but don’t overdo it.
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