This Could Save Tesla

It's back to basics.

Photo by Bram Van Oost on Unsplash

Tesla sales are experiencing what can only be described as terminal decline. Their profit margin has shrunk to functionally nothing. Their Robotaxi rollout is a painful embarrassment, rather than being the revolution that was promised. Obviously, Tesla is miles away from running this kind of service profitably, which has shaken investor confidence. On top of all that, Trump is expected to eliminate EV subsidies and regulatory carbon credits, both of which have significantly boosted Tesla’s bottom line over the past few years. It seems the walls are closing in on Tesla. And, quite frankly, there is a huge part of me that is glad about that fact. Musk not only helped put Trump into power but has also effectively mainstreamed white supremacy and Nazism — he deserves everything that’s coming to him. Unfortunately, Tesla isn’t just Elon; it is comprised of thousands of employees, and they don’t deserve to be crushed. So, there is also a small part of me that is glad that Musk is taking possibly the only action that could save Tesla.

That action isn’t leaving Tesla. Major investors have made it clear that Musk’s departure from Tesla would decimate its value (read more here). As I pointed out in previous articles, if Tesla was valued in line with other automakers, it would operate in negative equity, with bankruptcy knocking on its door. So no, Musk can’t just step away, even if he wanted to.

Instead, he has fired Omead Afshar, Tesla’s head of sales for North America and Europe. These are arguably Tesla’s most important markets, as they are the only ones that grant them protection from Chinese competition. Yet, sales in Europe have dropped by more than 50%, and US sales are down by up to 8.6% compared to last year, despite the EV market growing in both regions. This, obviously, wasn’t Afshar’s fault — after all, people stopped buying Teslas out of protest and disgust at the Cybertruck. But Musk, in his infinite wisdom, fired him anyway and will now take on the role himself.

Technically, this is a moronic idea. But, with the context of how Musk grew his empire and how he managed to screw it up, this might be one of the few things that could save Tesla.

Musk isn’t an engineer or an inventor. Technically, he had almost nothing to do with the Roadster or the Model S, X, 3 and Y. The same is true for the Falcon 9. What he was really good at was sales. He could sell the vision of these projects to investors and customers better than anyone else, even if his promises seemed impossible. And he pushed the actual engineers to bring his vision to fruition.

This was true even in his early days. When he was starting his first company, Zip2, he placed the company’s bog-standard computer in a larger, fancier case. He told investors it was a supercomputer which they needed to run their superior code. This borderline fraud worked, and investors invested $3 million in Zip2. However, what is telling is that they demanded Musk step down as CEO, and he was replaced by someone who knew what they were doing. Musk isn’t a good manager, CEO or engineer; the past few years should make that painfully clear. But no one can sell a vision like him (something he has in common with that guy whose salute he did).