Elon Musk Defeats Existential Threats – 6 Keys To Tesla’s Future
Elon Musk Defeats Existential Threats – 6 Keys To Tesla’s Future
Elon Musk beats existential challenges-6 keys to the future of Tesla. Tesla was facing what many perceived to be a make-or-break moment no less than two years ago.
The decision is in: it was made by Tesla. In the third quarter of 2019, the electric car producer made a surprising profit, starting a string of four consecutive cycles in the black and encouraging investors’ confidence that the future of the business is promising.
The company’s shares have surged to incredible new heights less than a year after Tesla’s stock reached a low of $211 in August 2019, reaching a high of $1,675 on July 20.
Gone are the days of 2018 when Tesla failed to manufacture the compact Model 3 vehicle, easily burning cash and raising real concerns about its potential to thrive.
Since then, the meteoric increase in Tesla’s stock price has come as the company has continued to speed up Model 3 performance, start Model Y crossover demand, slash needless costs, and shake off concerns about CEO Elon Musk’s leadership. Despite the COVID-19 pandemic, which briefly shut down Tesla production and undermined the finances of prospective buyers, it has also arrived.
With the short-term viability of the company no longer in doubt, it is now the world’s most profitable automaker, according to the stock exchange, and can now turn its focus to mapping a long-term growth path.
Here are six important stories to watch that will help decide the future of the company.
1. Will Elon Musk escape trouble any further?
When he tweeted that he had secured funding commitments to take the business private, Musk got himself into hot water in 2018. It was then decided by the Stock and Exchange Commission that he had not done so. The agency then briefly tried to restrict Musk from ever working for Tesla, or any other publicly-traded company, as an executive again.
He finally signed a deal that forced him to briefly relinquish his position as chairman and get pre-approved by legal counsel for his potential market-moving tweets.
He has managed to needle the SEC since then, insisting that the firm requires customers who bet on the stock of the firm to decrease.
“He tweeted on July 2 that Tesla would” make fabulous short shorts with gold trim in radiant red satin, “adding later that he would” give some to the Short Seller Enrichment Commission to comfort them during these tough times.
Musk is generally viewed as more valuable to Tesla than any other executive to another automaker, possibly. So he needs to prevent more legal troubles that might endanger his employment.
2. Can the Tesla Semi arrive?
About three years ago, Musk unveiled an electric semi, boasting that the battery-powered truck would revolutionize long-haul shipping. But as Tesla was forced to put more of its focus on bringing the Model 3 out into the world, the vehicle was later sidelined.
Now, hopefully, the Tesla Semi could be on the way. “Jerome Guillen, president of the Tesla automotive division, said on the earnings call that” we’ll start production next year “on the Tesla Semi.
There’s rivalry bearing down. Recently, Upstart truck manufacturer Nikola Corp., which took its nickname after the first name of electricity founder Nikola Tesla, went public and is making bold comments about its upcoming semi and electric hydrogen pickup.
For his part, Musk has dubbed “fool cells” hydrogen fuel cells, identifying them as overhyped.
3. Can the self-driving vehicle technology of Tesla overcome the competition?
Tesla has made major strides with its so-called autopilot technology, allowing the vehicle to steer, accelerate, brake, and perform other tasks on its own, including the ability to negotiate such intersections autonomously. Yet Musk has consistently promised that the capability of “absolute self-driving” is on the way.
“When I drive my car, I checked the new alpha version of the complete self-driving app. And it’s actually, I agree, significantly better than people know,” Musk said on the call for earnings. “It’s almost getting to a point where, between going through renovation and greatly differing circumstances, I can go from my house to work with no intervention.”
If stated correctly, this capability is remarkable, but a wide variety of automotive and technology firms are working on related technologies. In the past, Tesla has come under regulatory investigation for making over-the-top accusations about the ability of its self-driving systems. We’ll see how the business will deliver the items, which will possibly help raise revenues since it is anticipated that luxury consumers would pay for autonomous technology.
4. Will a lot of money be made by Tesla?
There is also an available issue. The luxury electric cars that the company has sold so far, on the one hand, tend to have a premium price tag that translates into premium earnings. For starters, the Model S sedan and Model X SUV frequently sell for more than $100,000.
But the firm will need to overhaul the aging Model S and Model X to pick up revenues in the long run and extend its lineup to more compact cars, which would require lower battery costs. Musk is preparing a conference on Sept. 22 to speak about the company’s latest battery developments to investors and the public.
Tesla Chief Financial Officer Zachary Kirkhorn told analysts on the earnings call that in the “mid-teens” in the “long term,” the organization is expecting an operating profit margin.
But according to Sanford Bernstein analyst A.M., no major automaker has margins above 8 percent today, (Toni) Sacconaghi, Jr., who said in a research note on Thursday that “it is uncertain that Tesla will be able to crack this barrier, absent special developments in” self-driving car technology
Which takes us to the 4th issue.
5. What is the company going to launch its new U.S. factory?
On July 22, Tesla announced that it had chosen the area of Austin, Texas, as the location for its second U.S. automotive assembly plant, which is planned to hire at least 5,000 employees. The factory would develop the Cybertruck and Model Y and Model 3 for shipment to the East Coast, joining the company’s plant in Fremont, California.
On a July 22 earnings call, Musk told investors that construction on the plant is continuing.
So when it will be able to create cards, it’s unknown. In about a year, Tesla recently constructed a new plant in Shanghai, but the climate for new construction in China is drastically different from the environment in the U.S., where it usually takes two to three years for automotive plants to develop.
The more the plant expands, the faster Tesla can increase the volume of production, minimize costs, and increase revenue.
6. Can the Cybertruck be bought by people?
Reactions ranged from “eccentric” to “eye-popping” to “weird” to a “piece of junk” when Tesla first debuted the futuristic-looking, stainless-steel bodied Cybertruck pickup in November.
The Cybertruck easily rang up more refundable deposits than Tesla said it anticipated, boasting good technological specs, including a whopping towing capability of more than 14,000 pounds, and a promised starting price of around $40,000.
But refundable investments do not transform into orders generally. Let’s wait to see if, after the car launches production, customers eventually make the order, which was expected to happen in late 2021. When is that going to begin? Which takes us to our next issue.