If I Were In Musk's Shoes, Here Is What I'd Do With Tesla
If I Were In Musk's Shoes, Here Is What I'd Do With Tesla
Saving Tesla is no easy task.
It’s safe to say that Musk hasn’t done a fantastic job of managing Tesla as of late. The once dominant force in the EV world seems to be proverbially shooting itself in the foot every few weeks. Many, including previously hard-core Tesla bulls, are now predicting a relatively rapid downward spiral for the once gold-boy of the stock market. It’s easy to criticise Musk’s actions in times like this, and I have countless times. However, counter-intuitively, it’s also easy to point out the actions Musk should have taken instead. You just have to apply the fundamentals of good business, namely consistency, honesty, and solid planning, things Musk abandoned years ago. Here is how I would manage Tesla if I were Musk.
Now, I have some caveats for this article. I’m not saying I am better than Musk at business. There is a reason I don’t own multi-billion dollar companies. These suggestions also aren’t the only way forward, by any means. Instead, by stating what I would do differently, I hope we can frame Musk’s decisions together and start the dialogue (internally or together) as to why he is pushing Tesla in this way.
So, let’s start with the elephant in the room, Tesla’s FSD (Full Self Driving). To recap, in 2021, Musk went against his own engineers’ advice and redesigned FSD from using cameras, radar and ultrasonic sensors to only using cameras in a transparent cost-saving measure. These engineers then blew the whistle on Tesla, stating that the system was now less capable and significantly less safe. This lack of redundancy also makes FSD inherently unsafe, as there is no way to double-check that the AI is interpreting the visual data correctly or to mitigate environmental conditions that can render the cameras useless. Fast-forward a few years, and there is now ample evidence that FSD, even when being monitored constantly by a human driver as it is supposed to be, is likely around 5 times more fatal per mile travelled than a human driver. As such, FSD customers only use the feature 15% of the time, despite having spent thousands on the option. This situation is unlikely to get any better either, as Musk has publicly stated that training the FSD AI to perform at an acceptable level will require a vast amount of computational power and energy. So much so that it might not actually be feasible, and even if Tesla manages it, FSD will still be inherently unsafe thanks to its lack of sensors.
Unsurprisingly, FSD sales have dried up so much that Musk recently slashed its price in half. This renders his claims that the system’s true value is around $100,000 per vehicle and that Tesla could sell cars for zero profit and instead make a profit selling FSD demonstrably laughable. This has utterly blown a hole in Musk’s future plans for Tesla.
So, what would I do?
Well, straight away, be honest about FSD. Rename it to something less misleading, and stop claiming it will be able to drive across the country unaided by next year. A claim that Musk has made multiple times since 2016. Then, scrap the camera-only system and instead create a new one that uses ultrasonic, radar and lidar sensors. This new system will be safer, thanks to redundancy. It will also be far easier to develop, as the computer-vision AI doesn’t need to be so accurate, as it is assisted by these other sensors. Then, stop selling FSD to the public. It is an unfinished software in development that has the potential to kill; it should be developed in-house by professionals. This will increase the quality of the data Tesla can train their FSD AI on, which will accelerate AI development whilst ensuring no one dies to realise Musk’s dream.
This way, Tesla will be able to develop a self-driving car people will actually want to buy, rather than the one that killed your rich uncle. Sure, this approach won’t inflate Tesla’s short-term stock price, keep Tesla in the media, or make it to market as quickly as Musk’s current approach. But the fact that it will actually be a useable self-driving system that people trust will make Tesla far more valuable and profitable in the long run.
The second, less massive, but no less the critical elephant in the room, is Tesla’s vehicle development. You see, it has gone terribly for Tesla. The 4680 battery was meant to slash the production of Tesla’s batteries by over half, enabling their cars to charge faster and be way more efficient. It was meant to be the ultimate EV battery that no one could touch, making the Cybertruck and upcoming budget Model 2 EV affordable whilst having industry-leading specifications. But, as it stands, it’s only marginally less expensive than other similar options, is less energy-dense than Tesla’s previous batteries, and charges only slightly faster. This has had knock-on effects. Tesla now uses batteries in some of its models from its arch nemesis, BYD, as they are cheaper and better. The Cybertruck is way more expensive than it was meant to be as the pack is so costly, and the Model 2 can only have middle-of-the-road specs that cars already on sale at its price point have. As such, the Cybertruck production is ramping up far slower than it was expected to, as demand is not as rampant as predicted, and Tesla is moving to scrap the Model 2 entirely and replace it with a self-driving robotaxi that inevitably won’t work because of reasons we have already covered. Meanwhile, Tesla’s rivals are widening their EV model range with cheaper and better-specced EVs, robbing Tesla of sales.
This is one of the significant reasons why Tesla’s sales have slumped over the past few years. They have failed to stay ahead of the competition and are now falling behind. But why did the 4680 fail to meet expectations? Well, Musk decided to develop unproven technology rather than more proven technology, such as different battery chemistries, 800V architecture, or prismatic cells, to meet these specs.
So, how would I solve this? Stop developing the 4680 and switch Teslas battery packs from 400v to 800v architecture with third-party batteries. This will make all of Tesla’s current vehicles charge significantly faster, taking them ahead of the competition overnight. Then, develop a high-energy density sodium-ion battery. Sodium-ion batteries inherently charge incredibly fast, fully charging in as little as 5 minutes, have a lifecycle double that of lithium-ion, are way safer than lithium-ion, and cost as little as a third that of lithium-ion. The only downside is they are typically half as energy-dense as lithium-ion. However, new proven anode materials can increase this energy density to a similar level to those of last-generation lithium-ion packs. So, in theory, Tesla could develop, launch and scale a sodium-ion battery that is energy-dense enough to be used in EVs within a few years. This would enable base-spec Model 3 and Ys, as well as Tesla’s Model 2, to undercut the competition whilst having specifications miles ahead of them. Meanwhile, the 800v architecture allows Tesla’s more expensive models to out-spec their competition with third-party batteries.
With this approach, Musk wouldn’t have to abandon the Model 2, bet the entire company’s future on self-driving AI, and fire vast swaths of blue-collar workers and core talent alike just to afford the extortionate amount of cash it will cost to make his AI even vaguely useable.
If Musk took these steps, or steps like this, I believe he would increase trust in Tesla while shoring up the company’s fundamentals, which are both key to securing Tesla’s future, especially if it ever wants to sell self-driving cars. So why isn’t he making decisions similar to this? Well, I have a hunch Musk is a startup kid; he only knows how to grow a company at light speed at all costs! But Tesla isn’t a startup any more; it’s a mature manufacturing company that dabbles in AI. As such, growing at all costs significantly risks its established position and opens it up to massive losses. Sadly, this risk has started to backfire, and Musk is struggling to transition his leadership to a more mature position. In my humble opinion, I think that if he can’t make this switch, it might be time for him to step aside. But, what do you think?
Thanks for reading! Content like this doesn’t happen without your support. So, if you want to see more like this, don’t forget to Subscribe and follow me on BlueSky or X and help get the word out by hitting the share button below.
Sources: Will Lockett, Will Lockett, Energy Post