Can Elon Musk avoid the fate of John DeLorean? Tesla CEO may need to ‘rethink’ strategy.
Ever since Tesla Motors was founded in 2003, skeptics have questioned the long-term viability of the cars they sought to create. Electric cars in general have a long history of impracticality, so Tesla’s visions of an electric sports car were easy enough to mock.
On Sunday, Elon Musk pulled a little April Fool’s Joke…
Tesla’s ups and downs seem awfully familiar… Remember the DeLorean? DeLorean Motor Co. was all the hype in the early 80s. Their futuristic-looking cars attracted tons of attention and many eager buyers. After facing production setbacks, however, they claimed bankruptcy and quickly fizzled out.
Making the budget balance has always been tough for carmakers, and it’s not getting any easier; these days, the high barriers to entry mean even giant multinational automakers have found themselves seeking one another for support.The company is racking up losses at a furious rate, in part because it has spent more than two times as much as traditional automakers in per-unit manufacturing capacity, according to Sanford Bernstein.
“Tesla has not only tried to reinvent the car, but has also tried to reinvent the production line, with hyper-automation,” Sanford Bernstein auto analyst Max Warburton said Wednesday in a note to investors. “This is creating serious issues.”
Part of the problem is that Tesla rushed into manufacturing too quickly, said AutoPacific analyst Dave Sullivan, who formerly worked in an assembly plant. The company appears to be “more concerned with getting butts in seats and fixing the quality issues after the fact,” Sullivan said.
Ultimately, it’s impossible for anyone to know where Tesla is headed. Even the gurus of Wall Street are divided; this week alone saw separate financial analysts predicting the company’s stock would both rise by 40 percent and fall by 40 percent within this year.
Then again, who knows? Elon might just surprise all the cynics all over again.