DUBLIN – Elon Musk is famous for doing things his own unique way. Iconoclastic, brash, and scrappy, Musk ignored tradition and often says and does things few other CEOs would dare. But while his style is perfect for an upstart start-up, it’s not clear that the Musk Method is the best way to manage a serious multinational corporation. As Tesla struggles to defend itself against mounting criticisms, is it possible that Musk’s style has become a liability, instead of an asset? – Felicity Duncan
By Tim Higgins
(The Wall Street Journal) The chief executive’s split with the National Transportation Safety Board this past week over its investigation into a Tesla car crash is the kind of brash move that Mr Musk has made repeatedly in the 14 years since the electric-car maker was founded. From the kinds of cars he sells to how he makes them to how he promotes his company, Mr Musk has made defiance of convention a point of pride and made dismissing of barriers to his vision of progress into a point of principle.
The from-the-hip approach has largely worked so far for Mr Musk, who has built the scrappy upstart into a global luxury brand whose market value has at times exceeded that of General Motors Co. But some observers question the style’s suitability to a company of Tesla’s size and age, and some investors are growing impatient for Mr Musk to deliver on his promises, including the protracted production ramp-up for the new Model 3 sedan.
Elon Musk says ‘humans are underrated,’ calls Tesla’s ‘excessive automation’ a ‘mistake’ https://t.co/jkmr6F9fyl
— TechCrunch (@TechCrunch) April 14, 2018
”I love that Elon Musk isn’t bound by tradition—that’s part of his brilliance,” Rebecca Lindland, a long-time automotive-industry analyst at Kelley Blue Book, said. But “they need to get out of the start-up realm and start behaving like a company that’s worth more than GM.”
Little about Mr Musk follows normal business logic, starting with the fact that he also runs another major company, Space Exploration Technologies Corp., and has founded several smaller start-ups all while trying to disrupt the auto industry. “If one were to do a risk-adjusted rate of return estimate on various industry opportunities, I would put basically building rockets and cars pretty close to the bottom of the list,” Mr Musk said recently. “They would have to be the dumbest things to do.”
Where management textbooks counsel delegation, Mr Musk micromanages, boasting about sleeping at the factory so he can help fine-tune production. And while many CEOs are guarded in their public statements, Mr Musk often fires off Twitter posts rebutting critics or making sometimes enigmatic statements about his business plans.
Elon Musk Explains Why He’s Still Sleeping on the Tesla Factory Floor https://t.co/o1Aj5cj55A
— Entrepreneur (@Entrepreneur) April 14, 2018
His unorthodox style was on display in tweets over the past couple of weeks, where Mr Musk has joked about the company going bankrupt on April Fools’ Day, criticized coverage of Tesla by publications including the Economist and The Wall Street Journal, and predicted in a post after 1 a.m. one night that the company, which has never reported an annual profit, will be profitable in the third and fourth quarters this year.
Elon was found passed out against a Tesla Model 3, surrounded by “Teslaquilla” bottles, the tracks of dried tears still visible on his cheeks.
This is not a forward-looking statement, because, obviously, what’s the point?
Happy New Month! pic.twitter.com/YcouvFz6Y1
— Elon Musk (@elonmusk) April 1, 2018
Even by his standards, the battle with the NTSB is risky. Mr Musk’s public sparring with NTSB, which he claimed is more concerned about headlines than safety, puts Tesla at odds with an influential agency whose report on Last month’s fatal crash of a Model X sport-utility vehicle could influence public perception and policy.
That controversy comes as Tesla is struggling to prove that it can mass produce electric cars. In recent weeks, questions about Tesla’s cash needs amid delays in ramping up production of the Model 3 have intensified, including Moody’s Investors Service downgrading its credit rating.
Mr Musk’s early bet with Tesla was that a sexy sports car could excite buyers for an electric vehicle. His more recent Model 3 bucks tradition as well, with a minimalist design aesthetic in a cockpit dominated by a 15-inch touch screen that resembles an oversized iPad, displaying information such as speed and offering controls for temperature and other functions.
Mr Musk has also eschewed franchised dealership, arguing that the direct relationship with the customer is important and ploughing a new way of selling cars in company-owned stores and online as dealers have fought the approach across the country.
Some industry traditionalists find Mr Musk’s approach vexing. Mike Jackson, CEO of AutoNation Inc., the nation’s largest dealership group, pointed to Tesla’s marketing of the Model 3 on its website as starting at $35,000, even though the current version of the Model 3 starts in the U.S. at $49,000.
“You can’t advertise something at a price point and then not have it at that price point,” he said in an interview. “It’s like you have the normal world and then you have this Tesla bubble world where the rules don’t apply.”
“We’ve been very clear since we launched Model 3 last year about the price of current Model 3 configurations, which has been repeatedly mentioned in reviews of the car, and that the $35,000 base model would come as production ramps,” a Tesla spokeswoman said. “We are working as quickly as we can to introduce less expensive Model 3 variants.”
Like Mr Musk, his fans revel in dismissing sceptics. Trip Chowdhry, an analyst for Global Equities Research, often sends notes to investors with messages such as one on April 7: “Betting against Elon Musk is not only insane but total stupidity—equivalent to committing a `Career Suicide,’’’ he wrote.
Along with being unpredictable, Mr Musk is sometimes unrealistic. Tesla this month reported that during the first quarter it again missed its production target for the Model 3, which it has revised multiple times, though it said it is on track to reach about 5,000 a week around the end of the second quarter.
— The Daily Caller (@DailyCaller) April 4, 2018
In an interview with CBS This Morning that aired on Friday, Mr Musk blamed some of the troubles on too much automation at the factory—something he has championed in the past—and for putting too much new technology into the sedan.
“We got complacent about some of the things we thought were our core technology,” he said. “We put too much new technology into the Model 3 all at once—this should’ve been staged.”
Mr Musk told CBS he is feeling optimistic about where Tesla is now. “At this point, I can have a clear understanding of the path out of hell and I did not until recently have a clear understanding,” he said.