HOW TO THINK ABOUT IT
They’ve got 99 problems — and cash may be one. Thanks partly to bad PR, Tesla’s financial well-being is under question. The company’s stock value has dropped by double digits in recent months, and though it’s still valued at nearly $50 billion, observers say that figure depends on significantly boosting production. The company lost more than $2 billion last year, and some analysts believe the carmaker, which denies that it’s facing a cash crunch, needs to raise another $3 billion in capital this year just to stay running. Meanwhile, hedge fund Vilas Capital Management says Tesla will crash within six months … even though shareholders just approved a $2.6 billion pay package for Musk, one of the largest ever.
Will Tesla take a back seat? The electric-car market so far is tiny — only accounting for 1 percent of the 90 million vehicles sold each year. But it won’t be for long. Global carmakers are set to invest at least $90 billion in electric cars and batteries, and within the next 15 years, experts expect full battery-powered vehicles to account for up to 20 percent of new car sales in the U.S. Tesla dominates the American market, but it will soon be competing with the likes of Ford. Plus, dozens of fully electric and hybrid models are being developed in China and Germany. Tesla could sink in the flood of new competition or be buoyed by electric options becoming more mainstream.
“Save us, Elon!” That’s what one crowd member shouted during the unveiling of Tesla’s solar panels last year. Such tongue-in-cheek exuberance illustrates why the entrepreneur is treated with reverence by his loyal fans. Musk has big ideas: saving our environment with solar energy, colonizing Mars and transferring human consciousness into computers. And this year he launched a car into space while Tesla struggled to meet production targets. It remains to be seen whether Musk can keep up with his bucket list of big ideas while still keeping his core business on track.
The greatest showmen. U.S. President Donald Trump has praised the South African-born entrepreneur for demonstrating “American ingenuity at its best!” And Musk appears to be borrowing from the Trump PR playbook. He recently lashed out at the CIR, calling it an “extremist organization,” and also boasted on Twitter that he was “building a cyborg dragon” — raising the question of whether the entrepreneur was serious or trying to distract from recent scandals. Musk, like Trump, also recently retweeted praise from Kanye West.
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