Musk Is Being Forced To Work For Tesla
But that will backfire horrendously.
It’s fair to say that Tesla investors aren’t happy. They have been forced to watch Musk pour increasing amounts of gasoline on the trash fire he started at the core of the company, all while he runs around cosplaying like it’s the late 1930s. So, last Wednesday, a group of major Tesla investors, mostly pension funds, wrote a letter to Tesla lambasting the “crisis” the company faces and demanding Musk return to Tesla on at least a 40-hour work week. On top of that, they want Musk to create a clear succession plan — you know, so they can kick him out if he fails. If Musk refused, then they would refuse any new compensation plans for Musk, which would be a major blow, as his record-breaking $56 billion compensation package might need to be reissued, given that the courts have blocked it. This is the big boys telling the child to clean up, or they will take away his battered and broken playthings. But I can’t help but feel this is the wrong move. Or is it a stroke of genius?
Ultimately, Tesla has thrived despite Musk, not because of him.
Don’t get me wrong, Tesla’s position as a meme supply is entirely due to Musk’s behaviour. But the core company’s success has very little to do with Musk. The Roadster and Model S were the actual founders’ (Tarpenning and Eberhard) ideas; all the groundwork was laid before Musk forced them out of the company. And he had very little hand in the development of these models, essentially taking a backseat to allow the engineers to do their thing. After all, he was spending most of his time trying to revive SpaceX during that period. In fact, there are even rumours that the Model 3 was Tarpenning and Eberhard’s idea too, and Musk just saw it through. However, even if that wasn’t the case, Musk was very hands-off with development, with EV experts like Peter Rawlinson (the now-CEO of Lucid) being among the main people to bring the vehicles to life.
It was these engineers who created the Model S, Model 3, and the charging network that made these EVs so enticing. Again, don’t get me wrong, Musk enabled them to meet that challenge and offered a guiding hand, but he is not the main reason for Tesla’s success.
However, the days of Musk being hands-off and letting these brilliant engineers work their magic ended sometime around 2016–2019 — right after his third divorce and multiple failed rebounds. It’s fair to say his feelings of inadequacy must have been running rampant. He began to make outrageous claims, such as that Teslas were able to drive more safely than human drivers back in 2016, which is still inaccurate now. This is when he started actively harming Tesla.
There is no better example of this than the Cybertruck. Musk was the progenitor and guardian of this project; everything so wrong with the Cybertruck, from its terrible build quality to its proclivity to catch fire, can be traced back to him.
This is a huge problem. The Cybertruck was meant to be Tesla’s saviour. Competitors were beginning to threaten Tesla’s veritable monopoly, and the Cybertruck was supposed to boost Tesla sales to a whole new level. Yet, demand is so low that they have already had to significantly scale back Cybertruck production. Also, Tesla has over 10,000 unsold Cybertrucks in its inventory, suggesting that the actual demand is basically zero. This was meant to be Tesla’s future, and Musk is solely to blame for its failure.
The same is true for the 4680. This was supposed to be an in-house battery, far cheaper, more energy-dense, and faster charging than anything on the market, putting Tesla lightyears ahead of the competition. Yet, five years later, not only has Tesla failed to deliver on its promises, but every major battery manufacturer now has batteries that outperform the 4680 in every metric by a significant margin. Why? Rather than letting battery engineers experiment and develop, Musk forced them to use unproven, proprietary dry cathode technology that he had purchased. Again, Musk’s ego got in the way, forcing Tesla to do things his way, leading to a dead end.
And guess what? He did this to Full Self-Driving (FSD) too!
Initially, FSD, like every other self-driving system, used a vast array of different sensors, including radar, ultrasonic sensors, and cameras. This provides the system with redundancy, meaning that if one sensor is compromised, the system can use the other to compensate and mitigate the anomaly. This also helps to keep the self-driving AI in check, as if it interprets things incorrectly (which it inevitably will, being an AI), the sensor array can identify hazards much more quickly than a single type of sensor. For example, if the AI hasn’t recognised a cyclist and turns into them, the ultrasound will quickly identify an object approaching rapidly, forcing the system to slam on the brakes.
But, even after Tesla engineers practically begged him not to, warning him it would make the system wildly unsafe, Musk overruled them and forced FSD to use cameras only. Why? Because it was cheaper to only install cameras. And now, FSD is woefully unsafe. Those aren’t my words but the words of Tesla’s own self-driving engineers and the 51 people whose deaths have been caused by FSD.
Self-driving and robotaxis, like the Cybertruck, were meant to be Tesla’s future. They should have meant that the company didn’t need to make its money from manufacturing and could instead rake in billions of dollars from software licences and user services. But that is impossible now, thanks to Musk’s uninformed meddling.
As companies like Waymo have proven, all of this is possible with a properly equipped self-driving system. Their robotaxis require intervention to prevent an accident on average every 17,000 miles as of 2023. Tesla’s FSD, on the other hand, needs intervention every 31 miles! No one in their right mind would get in a robotaxi with those odds, especially if it has no steering wheel or pedals, as Musk promises the Cybercab will have.
Yes, Musk has stated that some improvements are coming to FSD before the Cybercab hits the public roads. However, Musk claims it will only require an intervention every 10,000 miles, which is not only significantly less than Waymo’s figure but also represents a safety increase of over 76,000% compared to the current system, which is totally unrealistic.
Additionally, Tesla’s own internal analysis revealed that their robotaxis won’t generate any profits for a very long time. And, guess what, Waymo has proven that fact, as they have never turned a profit and likely won’t for many years to come. So, basing a company’s entire future on self-driving cars in and of themselves is moronic, even if you don’t screw up the technology behind them.
Musk’s egotistical leadership has bet the entirety of Tesla’s future on products that don’t work and are wildly dangerous. Even if we take his political dabbling out of the equation, Musk has doomed Tesla.
So, why would you force him to come back?
Well, one of these Tesla bulls, Gary Black, publicly stated that if Musk stepped down, Tesla’s stock could fall by 20% to 25%, wiping out nearly $220 billion in shareholder value. Notably, he mentions nothing about Musk’s leadership or the innovation he could bring to the role, just that the myth of Musk adds to the value of the stock.
This is why this investor letter is genius. It forces Musk to return to Tesla to maintain the added value of Musk’s myth. However, it also forces Musk to put a succession plan in motion, not only preparing the company but also the stock market for his departure. So, when his idiotic leadership begins to legitimately tank the company, they can force his resignation, keep Tesla afloat, and mitigate any losses from their investment.
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Sources: CNBC, The Guardian, Forbes, The Dawn Project, Will Lockett, Will Lockett, Will Lockett, Will Lockett, Will Lockett, Will Lockett