Did any of you hear holiday partygoers discuss Elon Musk in recent weeks, or participate in such lively discussions?
We’ve all witnessed a great many scandals and crises over actions taken by Musk in his CEO role at Tesla, SpaceX, and now Twitter. It goes back to about 2010. It was strange to see Musk get away with quite a lot, but we seemed to get used to it years ago. If other automaker executives had made these types of claims, promises, and insults (do you remember the British cave diver being accused of being a “child rapist”?), they would have been seriously sidelined or removed from office.
Yet those past incidents were nothing compared to recent weeks. The chicken certainly has come home to roost for Musk. It came out of his fiasco with Twitter, but it’s certainly spread over to Tesla recently in various ways.
Twitter had been the primary social media platform for many serious players out there — news media, Washington politicians, digital entrepreneurs, political activists, actors and comedians, and Hollywood executives, to name a few. Many of them shut off their Twitter accounts after being disgusted by Musk’s takeover and initial actions. The stories were disappointing to hear, with many talented employees leaving Twitter or being forced out. And who expected Donald Trump to reject Trump’s offer to come back, or understood why Musk would have made that offer in the first place?
As mentioned, the assault on Musk’s image and reputation has been spilling over to Tesla. That became clear as I heard holiday party comments about the electric carmaker having serious problems in the China market. Another juicy one I heard is that Tesla customers are furious over the poor condition of the new electric vehicles being delivered to them.
So what is the state of affairs for the world’s largest battery electric vehicle maker when separated from the mess that Musk got himself into at Twitter? Could Tesla be going to “hell in a hand basket” as the old timers used to say?
- The latest on the China crisis and angry Tesla customers.
Tesla seems to be doing alright in the world’s largest EV market, but the company is going through a difficult time along with its competitors. For example, Tesla sold 302,000 new vehicles in the US last year. In China, the company sold 473,103 units during that time, according to Carsalesbase.com. They won’t be leaving there anytime soon. A Reuters article stirred up some of that concern that China is a difficult place to be right now, and that Tesla is going to pull back on the market. But that’s happened before with Tesla and it could happen again.
Finding evidence of poor condition Tesla vehicles being delivered to new owners has also been a bit tricky, whether that be in China, the US, or Europe.
2. Would it be a grave error to work for one of these companies?
What’s it like to work for Tesla and SpaceX? The hours can be long — with office staff working 60+ hours, and some of the anecdotal reports coming in at 80-to-90 hours per week. Musk did crack down on his employees earlier this year who were staying away from the office because of the Covid allowance of working from home.
Visitors to the Zippia recruitment website have given the company high ratings with a 4.8 out of a 5 star rating score. Tesla has strong employee retention with staff members usually staying with the company for an average of 3.7 years. The average management-level employee at Tesla makes $108,037 per year, which is competitive for its location and industry.
There was a lot of concern expressed that Musk would use loyal Tesla employees to bump out Twitter employees and take over their workplace — with the new employer expecting staff to devote their lives to their jobs no matter what. But so far, Musk has only pulled around 50 employees over to Twitter — mostly software engineers who’ve worked on the Autopilot semi-autonomous technology team.
Musk did take the hardline with existing Twitter employees. They were told they’d have to join the team and follow his guidelines or take three months of severance. Twitter had already been falling into mayhem with employees wanting to leave or see improvements. Musk had been strong-armed into dropping down his $44 billion acquisition by the executive board. At first, last spring, they’d avoided him and his offer, but they got around to suing him into buying Twitter, a company that won’t be going back to the stock market anytime soon.
- The numbers aren’t so bad for Tesla.
Tesla delivered 938,172 vehicles globally in 2021. Of these, the Tesla Model 3 had 501,000 unit sales. The Model 3 and Model Y accounted for 97% of Tesla’s sales volume in 2021. For the first nine months of 2022, Tesla brought in $21.45 billion in sales and net income of $3.29 billion. That was 55.95% growth year-over-year in sales and 103.46% in net income growth for that time period.
The company has the clear lead for global EV sales. No. 2 in the world, Chinese automaker BYD, sold 593,745 plug-in electric vehicles globally last year. That broke out to 320,810 battery electric vehicles, and 272,935 plug-in hybrid electric vehicles.
Tesla has become securely established as a global automaker. The company has been building vehicles in China, the world’s largest auto market, since 2019. This year, two more giga battery factories have started up, Giga Texas (in Austin) and Giga Berlin (in Germany). The California factory is still doing well as is Shanghai, China. It’s corporate office moved over to Austin in December 2021.
- Stock market performance brings Tesla more in line with competitors.
Tesla, Inc., has taken a big hit this year — down about 70% in value. How did it get there? Musk selling lots of Tesla shares and getting absorbed in a contentious role at Twitter are two reasons being floated out there by investors. Then there’s everything else — market forces impacting other carmakers and industry sectors.
If you look at a five-year chart on stock performance for Tesla, Inc., it looks similar to stock performance from some of its major global competitors. That’s not isolating EV sales and performance, but looking at the entire companies’ performance. When looking at Tesla, Ford, GM, Toyota, and Volkswagen, prices were flatlining into 2020. Then prices spiked up in 2020 and dropped into 2021; then they went way up through the early part of the next year and have been declining in recent months.
Some of that had to do with new car prices going up along with sales figures. A major shortage of computer chips has driven dealer inventory way down and kept new car prices up — and used car prices way up. Another thing driving up sales revenue has been shoppers buying more expensive trucks and SUVs, driving up revenue. They’re also buying more expensive add-ons (including from Tesla) such as automatic braking and lane departure warnings. Rising prices and consumer loan rates have been adding to the sales revenue increases.
- There is another company Musk oversees, and it’s doing well.
SpaceX is doing very well these days; and while the rumors abound that management and engineers have to put in some very long hours to do the job and have no say in how the company is run, that doesn’t seem to be the case overall. Gwynne Shotwell has moved up to be SpaceX’s president and COO, and manages the daily operations of the commercial space exploration company. Shotwell and vice president Mark Juncosa are now overseeing the facility and operations of company’s Starbase, a spaceport, production, and development facility for its rockets, which is located at Boca Chica, Texas.
Musk owns about half the privately held company and is still known for keeping a strong presence there. It has over 10,000 employees and a valuation of $74 billion. It’s been a very good year for the space travel company. The company broke its own annual records with the 60th mission that have delivered 54 Starlinks into low-Earth orbit. Starlink is bringing cell phone and internet access to several smaller countries that had never had it before.
- Tesla can’t force fully autonomous electric vehicles to market.
The automaker has been building in the capacity to switch over to Level 5 fully autonomous self-driving vehicles in recent years, with Musk promising in 2017 that the technology would soon be available. But they’re not going to turn over that capacity to the vehicle owner until it gets legally cleared by vehicle safety administrators such as the National High Traffic Safety Administration (NHTSA) and China’s Ministry of Transport. It doesn’t look like that will be happening anytime soon.
More than 100,000 Tesla vehicles have been sold with the Autopilot feature over the years, the company says. Customers can buy the whole package for $15,000 when they purchase their car, or they can pay an additional $199 a month for the Enhanced Autopilot version. Popular functions include automated lane changing on highways, automated parking, traffic-aware cruise control, and lane keeping. Some of these are included in the standard driver assistance package (which is called Autopilot) and some come with the package marketed as either Enhanced Autopilot or Full Self-Driving in the U.S. for the additional package cost of $15,000 or a monthly $199 payment.
Tesla has been cooperating, over the years, on recalls and safety investigations on its vehicles. Tesla is once again undergoing vehicle safety tests to two more vehicles with NHTSA. One involved a 2021 Tesla Model S moving erratically through traffic lanes on the San Francisco Bay Bridge on Thanksgiving Day. The Tesla driver caused a crash on the bridge involving eight cars, and claimed he was using the Tesla Full Self Driving features.
Another recent crash incident being looked at by the safety agency involves a 2020 Tesla Model 3. NHTSA reported to CNBC that it has gathered data for review on at least 41 crashes involving Tesla vehicles where automated features such as automatic emergency braking, or more extensive driver assistance system features included in Autopilot, FSD and FSD Beta, were involved.
- What does Tesla have to offer? And what’s next?
Here are Tesla’s entries for the 2022 model year — and a look at 2023 and possibly beyond………
—Tesla Model 3 Rear-Wheel Drive: $46,990
—Tesla Model 3 Long Range: Unavailable Until 2023.
—Tesla Model Y Standard Range: $61,990
— Tesla Model 3 Performance: $62,990
—Tesla Model Y Long Range: $65,990
—Tesla Model Y Performance: $69,990
—Tesla Model S Long Range: $104,990
— Tesla Model X Long Range: $120,990
—Tesla Model S Plaid: $135,990
— Tesla Model X Plaid: $138,990
— Future model: 2023 Tesla Cybertruck: pricing removed
— 202X Tesla Roadster: pricing removed
— 202X Tesla hatchback: ~$35,000
Source: Inside EVs
In conclusion, Elon Musk is no longer the rock star that he used to be. He’s got a lot to clean up, but it looks like Tesla and SpaceX should continue to exist. As for Twitter, we’ll have to wait and see.