Reputation management: Tesla’s Elon Musk can teach Helen Zille a thing or two

South Africa-born global tech entrepreneur and pioneer Elon Musk and DA chairperson Helen Zille have a few things in common, not least of all that they both know how to harness the power of Twitter but have also been piked as a result of their activity in the Twittersphere. Musk has come close to being put behind bars for deliberately misleading investors in Tweets about Tesla; Zille has been accused of coming across as racist in Tweets. Musk has appeared contrite of late, pulling back from commenting on Twitter, while Zille continues to stoke the coals of political debate by making controversial statements that raise the heckles of Twitter followers on the lookout for race-baiting. Tesla's stock price has staged a dramatic recovery; Zille's personal brand could arguably do with a bit of a boost in the interests of rebuilding lost support for the opposition DA. – Jackie CameronTesla's stock goes to heaven ___STEADY_PAYWALL___.By Holman W. Jenkins, Jr.(The Wall Street Journal) – In case you're puzzled why Tesla's stock is up 200% in three months, don't be. It's amazing what running a business like a business sometimes can accomplish. Imagine that the faith and hope that animated Tesla bulls is still intact, but the following also happened: Tesla chief Elon Musk stopped relying on government policy to make his company successful. He refrained from overpromising. He became disciplined about costs and tweeting. He backed away from selling his Model 3 to the masses at $35,000. Instead, he focused on selling $70,000 versions to high rollers and enthusiasts.Though Mr. Musk hasn't quite weaned himself off capital raises as he indicated in 2018, he isn't John DeLorean, who kept expanding employment and running up costs in hopes that politicians would bail him out. If you believed in Tesla before, you should believe even more now (though that noted auto skeptic, Ralph Nader, thinks you're crazy).One thing we're learning, at least so far, is that cars designed in part for compliance purposes have a hard time finding their way into customers' hearts. Or to give the short version: American car buyers don't want electric vehicles, they want a Tesla.Read also: Elon Musk's Tesla goes from zero to undisputed champion in just 10 yearsBy the recent estimate of Alix Partners, global auto makers will invest $225bn in developing EVs over the next three years. Reuters estimated that Volkswagen committed $91bn to the cause, and Daimler $42bn – all this to meet political mandates. Seventeen all-electric models were offered in the US last year. A dozen more will arrive this year – though one less than expected since Mercedes has delayed its $70,000 electric SUV until next year. Why might Mercedes be hesitant? Even with so many models to choose from, EV sales were flat last year, and one car – Tesla's Model 3 – accounted for nearly 80% of those.This is the pileup we warned you about. Roger Penske lamented in a conference call in November the customer cancellations flooding in for the Audi E-Tron, leaving his Northern California dealerships stuck with 30 of the highly touted SUVs. A Toyota executive told an audience an "electrified Armageddon" was coming. A Honda executive said the Tesla Model 3 wouldn't be selling either if it had a Honda, Toyota or Ford badge on the hood.Apple and its iPhone are the precedents the company's bulls have often cited, but Tesla didn't invent the electric-car market the way Apple did the smartphone market, and demonstrably Americans have room in their garages for many kinds of vehicles. Electric cars are among them but so is the category that outsells them 2 to 1 – diesels, and that was before premium-priced diesel versions of the Jeep Wrangler and Chevy Suburban hit the market this year.Read also: In defence of Tesla and Elon Musk's business strategies – analystThis column has been hard on Bloomberg News for forecasting a wholesale transition to electric cars in the near future based on vaporous promises by politicians eventually to ban gasoline-powered cars. Voters may have something to say about that, but such forecasts also ignore the reality that government policy everywhere has turned decisively toward relying on profits from gasoline-powered cars to support the money-losing electric cars that mainstream manufacturers are mandated to build.This only becomes more true as direct subsidies to buyers are phased out, as is happening in the US, China and everywhere. If the world is on the cusp of its first recession of incidents – a coronavirus here, a Boeing production halt there – one of the earliest tremors was Germany's diesel-gate scandal. In penance, the German industry, led by VW, has poured tens of billion into EV investments that aren't likely to pay off, and with no other strategy in mind than throwing themselves eventually on the mercy of politicians when the contradictions become apparent.Herbert Diess, VW's chief, tells investors that its EVs will be profitable once scale is achieved. I'm not sure anyone believes him, which represents a remarkable flipping of the positions of Tesla and its conventional rivals. Running a "hard budget" company is exactly the course we urged on the Tesla mastermind, meaning a company that expects to cover its costs with revenue from sales. Tesla has proved that the market for electric cars is real, but so are the limits of that market, succinctly defined as the number of customers willing to pay a premium to be inconvenienced (and recharging will be a daunting inconvenience for many potential buyers for the foreseeable future).So am I a believer in Tesla at the current stock price? No. The company expects to sell 500,000 cars next year; its market cap, at $169bn, is more than $50bn higher than GM's, Ford's and Fiat Chrysler's combined, businesses that collectively sell 17 million cars a year.Tesla can earn a lot more profit per car, and can sell a lot more cars than it does now, and still its stock is priced as if its future profits will be coming from some unnamed something that is not the car-making business.

Reputation management: Tesla’s Elon Musk can teach Helen Zille a thing or two

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