Why I Don’t Think Tesla Will Dominate the EV Market

You can’t deny Tesla is a visionary company. Tesla’s products have ignited mainstream interest in the electric vehicle market and are leading the way towards a future of innovative environmentally friendly transportation .

Yet Tesla divides opinions — The company has thousands of loyal followers who defend their every action but they also have just as many critics. The scepticism is often driven by the actions of Nothing Of Tesla (CEO) Elon Musk.

I must admit I am one of those individuals who shares scepticism on Tesla.

Tesla has been an incredibly successful company thus far. They have a diverse product line and a loyal customer base. They have become a household name, they are finally profitable and incredibly innovative. It looks like they are on a smooth path to domination, right?

I am not 100% convinced. Nothing can take away from the achievements of Tesla, they have been fantastic — they pushed the boundaries. They forced other automotive companies to shift gear and re-think their long term strategies.

Tesla has captured the hearts of innovators and early adopters. The next target for the company is global mass market adoption. To achieve this Tesla needs to start operating like a well oiled machine. Yet how can this be possible when the CEO is constantly sparking negative press. It is pretty rare for a company at this stage of maturity to have this many controversies and yet not be held to account?

Firstly it has been well documented that Tesla’s board of directors have very close ties to Musk and it is often questioned whether they will be able to provide sufficient independent oversight. In a document written in 2017, investors stated they were seeking two new board members because of Musk’s close personal ties with the five existing board members — including Musk’s brother and Brad Buss former CFO of SolarCity, which was acquired by Tesla.

As well as the board, Musk has an almost cult like following. Any controversial move made by Musk still seems to garner wide and vocal support of the Tesla “fan-boys and fan-girls”. When a significant number of investors behave in a cult like manner and the board lacking industry experience and independence. Who is truly holding the company to account ? Who is asking the uncomfortable questions ?

Of course we have the press and analysts who have been vocal to criticise Musk and his management of Tesla. Musk’s reaction to the criticism tells you everything you need to know about the way he operates and it’s concerning. He often acts aggressively and childlike whenever he is questioned on items he doesn’t find relevant. Most prominently shown in a recent earnings call. How often do you see CEO’s of Fortune 500 companies acting this way ? With such little regard for professionalism and respect. If Musk is acting like this externally, can you imagine the toxic work environment internally?

Speaking of internal operations. Tesla has significant retention problems. Executives are back out the door just as quickly as they walked through them. My spidey senses suggest it may be from a toxic work environment…

Recently CNBC reported Musk’s attitude towards improving efficiencies on the assembly line. Musk appears to have an aversion towards using software, tools or processes developed by other companies particularly those from the automotive industry. As a company that is trying to scale — you would think they would want to leverage technologies and processes that have helped largest automotive companies become extremely efficient. Why re-invent the wheel?

https://www.pexels.com/photo/speedometer-gauge-reading-at-zero-104836/

Toyota has been delivering their products within budget and on time for years, maybe they have a few things worth learning? Musk’s negative attitude towards the major automotive players is a red flag. Why isn’t he willing to learn from others? Including distinguished and respected members of his own team. He isn’t inspiring collaboration when voices aren’t heard, they will want to go somewhere they are heard. It becomes hard to manage a company with continually revolving doors and the execs that are leaving are likely to leverage their knowledge with Tesla competitors.

Now you may be screaming at your screen but “Tesla’s finally profitable”. Yes we did see stronger than expected results this quarter. This is a positive result for the company. It will be interesting to see if they can sustain this especially as they look to build a factory in china and roll out an even cheaper model 3 which if successful will be a major win.

Musk is also doing well to sustain his twitter account. Again this brings me back to professionalism, Musk seeks so much attention and confirmation from Twitter (you know he’s 47 right ) — Don’t you think that’s a little bit concerning. How many CEO’s of successful multinational companies act like that? His divisive opinions will continue to distract from the successes and achievements of the company.

For the reasons above, I don’t believe Tesla will dominate the EV market. Tesla has been visionary, it has set the pace, it has shown what can be achieved. Yet it is fighting too many controversies and with no one in the leadership team really holding the Musk to account, I expect more controversies to come. While Tesla tries to scale and fight fires, competitors will start grabbing their own chunk of the market and potentially slide into the market leader spot.

Tesla may prove me wrong. I hope they do, they have a fantastic product but there is so much more than just product when running a company. I would love to see Musk hit the brakes on the public persona for a while and give me a chance to take him more seriously.