- Tesla CEO Elon Musk has promised profitability, vehicle deliveries, and more to his shareholders, customers, and employees over the years.
- Not all of his visions have panned out.
- The electric automaker’s wider-than-expected quarterly loss this week and profitability forecast highlight Musk’s pattern of issuing expectations that end up needing adjustment.
- Visit Business Insider’s homepage for more stories.
Tesla CEO Elon Musk is a visionary.
But the billionaire also has a habit of over-promising and under-delivering.
For Tesla sceptics, those ambitious targets that don’t always get met on time are proof enough that Musk is a fraud. Yet for some of the company’s staunchest supporters, the same execution is just proof he’s a genius at work who can’t be confined to traditional metrics.
“Sell-side analysts who don’t know the guy, who don’t understand the technology, who don’t understand what it is like to work at Tesla – they translate his ‘shot for the moon’ as ‘they missed it,'” Pierre Ferragu of New Street Research, easily Tesla’s biggest Wall Street bull for years, told Business Insider last year.
“Instead of translating it as ‘they started,’ they translate that into ‘they failed,’ which is a massive mistake. It’s just a wrong way of translating Elon Musk.”
Here are eight of Musk’s pledges that have yet to reach their fully promised potential:
In 2013, Musk said that all of Tesla’s Supercharger stations would be equipped with solar panels within a few years. That hasn’t happened.
Tesla has not yet announced the completion of this project, and it made no mention of solar power when it unveiled the latest version of its Supercharger stations in March.
In 2015, Musk said “I think we will have complete autonomy in approximately two years.” He has pushed that timeline back to 2019.
Musk in 2016 said Tesla would produce 500,000 vehicles in 2018. Tesla made 254,530 vehicles during 2018.
In its first-quarter earnings letter in 2016, Tesla said it planned to make 500,000 vehicles in 2018.
“Given the demand for Model 3, we have decided to advance our 500,000 total unit build plan (combined for Model S, Model X, and Model 3) to 2018, two years earlier than previously planned,” the company said.
Tesla made 254,530 vehicles during 2018.
Musk said in 2016 that a fully autonomous Tesla vehicle would be ready to drive cross-country by the end of 2017. That still hasn’t happened.
Musk said in October 2016 that a fully autonomous Tesla vehicle would be ready to drive cross-country by the end of 2017.
“I feel pretty good about this goal,” Musk said during a call with the press. “We’ll be able to do a demonstration guide of full autonomy all the way from LA to New York.”
Just under 10 months later, Musk said in a quarterly earnings call he wasn’t sure whether the demo’s deadline was still feasible.
“It is certainly possible that I will have egg on my face on that front, but if it’s not at the end of the year it will be very close,” Musk said.
Another update came last February, when the CEO said in an earnings call that the cross-country autonomous road trip would come in three to six months’ time.
Two and half years after the initial proposal, the demo still hasn’t arrived. But Musk did hint at a timeline update in a tweet last September.
“Will you do the cross country trip on V9 ?” a Twitter user asked, to which Musk replied, “Probably V10 alpha build.”
In June 2018, Musk said that Tesla was cutting 9% of its workforce so that “we never have to do this again.” In January 2019, Tesla cut another 7%.
In June 2018, Tesla laid off about nine per cent of its workforce in a cost-cutting move.
In an email to employees following the roughly 4,000 job cuts, Musk said the decision was “difficult but necessary” adding that the cuts would help ensure massive layoffs never happen again.
“I also want to emphasise that we are making this hard decision now so that we never have to do this again,” he said in the email.
In January 2019, that proved to no longer be the case. Tesla laid off another 7% of its workforce as part of its push to deliver a cheaper Model 3 on time and at scale while remaining solvent.
In August 2018, Musk famously tweeted he has “Funding secured” to take Tesla private. The SEC later charged Musk with fraud.
Perhaps none of Elon Musk’s foiled plans are more infamous than his failed bid to take Tesla private.
“Am considering taking Tesla private at $US420. Funding secured,”Musk tweeted in August 2018, adding that “shareholders could either to sell at 420 or hold shares & go private.”
That led to a lawsuit from the US’ top stock market regulator which eventually ended with two, $US20 million settlements between both Tesla and Musk with the Securities and Exchange Commission. Musk agreed as part of the settlement to relinquish his position as chairman of Tesla’s board.
And it’s still giving Musk headaches. In February, the SEC asked a federal judge to find Musk in contempt of court for allegedly violating his agreement to have his tweets monitored by a company lawyer when he tweeted 2019 production numbers that differed from Tesla’s official forecasts.
The SEC and Musk requested another one-week extension to file their new agreement on Thursday.
In January 2019, Musk said the company would be “profitable in Q1 and all quarters going forward.” The company reported a loss in the first quarter.
On Tesla’s fourth quarter earnings call in January – the first time the company had reported back-to-back profits – Elon Musk said those should continue for the foreseeable future.
“I’m optimistic about being profitable in Q1,” Musk said. “Not by a lot, but I am optimistic about being profitable in Q1 and all quarters going forward.”
That was only true for less than a month.
On a surprise conference call with select news outlets in February, Musk warned that those sustained profits would likely not be the case (as became true in April.)
“Given that there is a lot happening in Q1, and we are taking a lot of one time charges, there are a lot of challenges getting cars to China and Europe, we do not expect to be profitable,” he said. “We do think that profitability in Q2 is likely.”
Wall Street analysts polled by Bloomberg expect the company to report more losses for the second quarter in July, and Tesla CFO Zach Kirkhorn suggested during the company’s first-quarter earnings call that Tesla would not be profitable until the third quarter of this year.
“The teams are working extremely hard and making terrific progress on improving the cost efficiency of the business without sacrificing growth and that, in combination with the efficiencies from unwinding [logistical difficulties for production and deliveries], is where we feel we will be comfortable returning to a place of profitability in Q3 once all of those pieces are in place,” he said.
In February 2019, Musk said Tesla would be “winding down many of our stores.” Tesla later said it would only close about half the 378 stores it intended to.
Tesla surprised its own employees in February 2019 when it announced it would close “many” of its retail stores as it shifts sales to online-only.
“Shifting all sales online, combined with other ongoing cost efficiencies, will enable us to lower all vehicle prices by about 6% on average, allowing us to achieve the $US35,000 Model 3 price point earlier than we expected,” Elon Musk said on a conference call with journalists at the time. “Over the next few months, we will be winding down many of our stores, with a small number of stores in high-traffic locations remaining as galleries, showcases and Tesla information centres.”
In a statement in March, Tesla said it would only close about half the 378 stores it intended to.
“As a result of keeping significantly more stores open, Tesla will need to raise vehicle prices by about 3 per cent on average worldwide,” the company said. “We will only close about half as many stores, but the cost savings are therefore only about half.”
On it’s most recent quarterly earnings report in April, Tesla said it had 377 store and service locations as of March 31, 2019, down just 1 from the end of 2018, and up from 339 the same quarter of the previous year.
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