Elon Musk’s Visionary Leadership at Tesla Leads to Success but Poor Decisions Almost Lead to His Downfall
This article continues my discussion of Elon Musk’s leadership of Tesla from my previous article. This article discusses Tesla’s visionary invention of the Over the Air (OTA) vehicle updating system. This system, or a similar one devised by other companies in the industry, will be critical for the success of the autonomous vehicle industry in the U.S. The updates for fully autonomous vehicles will be more frequent and more extensive and they are essential for these vehicles to drive safely.
The article also discusses Musk’s decision for Tesla to construct needed charging stations, equipped with faster charging outlets for their fleet of electric vehicles. I discuss in my book, The Future is Autonomous, that the Chinese government has invested billions of dollars in infrastructure construction projects. These projects include roadside cameras and sensors and 5G wireless communication networks which will assist its autonomous vehicles to drive more safely.
The question remains, who will pay for these projects in the U.S.? Will companies pay for all, or part of this cost, like Tesla did for charging stations and outlets? Or will state and local governments who typically fund road infrastructure projects pay for them? This becomes a difficult question, especially now with many states losing money for their annual budgets due to the COVID-19 pandemic.
This article also discusses how al of Musk’s success in building Tesla to be the global leader in electric vehicle sales almost came crashing to a halt because of his poor decisions over the span of just a few months. For all of his visionary genius, in the end Musk just needs to learn to let his accomplishments do the talking and not treat any critic as an enemy that must be attacked in the media. He is the one person in the industry charismatic enough to capture potential consumer’s attention and promote the autonomous vehicle industry in the U.S…if he chooses to do so…
Tesla’s OTA System and Infrastructure Improvements Address Crucial Needs
The OTA system allows Tesla vehicles to update changes to its Autopilot system. These changes could include the layout and appearance of its touchscreen interface and even the range of the system for things like hurricane predictions. The updates for autonomous vehicles will be more frequent and more extensive. These updates will have things like map updates and will be crucial for autonomous vehicles to drive safely on public roads.
When Musk first joined Tesla back in 2004, there were very few public charging stations in the US. The charging stations that did exist were mostly clustered around large cities, such as Los Angeles, San Francisco, Boston, or New York City. Therefore, a person might have to drive possibly five or more miles to charge their vehicle. The first-generation electric outlets would also take significantly longer to fully charge a vehicle than filling up a vehicle with gas.
As of March 2020, there are 78,500 charging outlets in almost twenty-five thousand charging stations in the US. A large portion of these charging stations (6,835 with 28,545 charging outlets) are in California, where there are over six hundred thousand plug-in electric vehicles as of September 2019. The sales of electric vehicles in California were also up eighty-four percent from 2018.
Elon Musk and Tesla have been part of this increase in charging stations. Tesla has built 16,103 Superchargers (outlets with very fast charging speed) at 1,826 charging stations around the world. This includes nine hundred eight charging stations in the US. This is the largest number of stations in any one country or region in the world.
This is significant because Elon Musk recognized there was a problem in the lack of charging stations and fast-charging outlets in the US. He decided to address this problem by having Tesla build this needed infrastructure themselves. He chose to focus on this construction rather than wait for national, state, or local governments to make the investment.
Leaders in the autonomous vehicle industry, like Elon Musk and John Krafcik at Waymo, could work together to pressure Congress to invest in creating a robust 5G network in the US. They could also work with local governments, infrastructure companies, or other organizations to co-finance smart infrastructure projects. These projects could include things like smart streetlights or roadside cameras. These projects would assist the functioning of autonomous vehicles and allow them to drive more safely. Building these projects is something China has been focusing on. I will describe this in my chapter on Xi Jinping and China’s new focus on developing new technology.
I had a talk with Dr. Sven Beiker, the founder and managing director of Silicon Valley Mobility. This is a private consulting company, specializing in business-corporate relations in the automotive industry. He discussed some of the key points about infrastructure that need to be considered for the autonomous vehicle industry to succeed. He said, “Infrastructure needs to be amended now, extended, or adopted to include self-driving vehicles. We need to see who actually finances that infrastructure.” He pointed out this could be specific infrastructure companies, vehicle manufacturing companies (like Tesla for its charging infrastructure), and/or the government.
He noted getting the government involved “definitely slows things down, but I think it will not be possible without it.” Therefore, companies need to continue to work on making their autonomous vehicles as safe as possible. They may also need to invest in specific smart infrastructure projects themselves. By doing this, they would be following Elon Musk’s example at Tesla.
Elon Musk and Tesla have worked to increase people’s acceptance of the electric vehicle. They have also introduced them to the potential benefits of autonomous driving with their driver-assistance Autopilot system. However, Elon Musk remains an enigma managing his public persona. He can generate positive publicity for both Tesla and the autonomous vehicle industry by identifying the incredible benefits they can bring society (albeit with questionable predictions about when they will be ready.) However, some of his actions and statements hurt the goodwill he could gain for both Tesla and the industry as a whole.
Musk’s Contentious Relationship with the Media Continues to Hinder His Goals
As demonstrated in the story introduced this chapter, Musk has created controversy from his comments in the past but his tweets in August 2018 almost led to his downfall. On August 7, 2018, Musk tweeted, “Am considering taking Tesla private at $420 (per share). Funding secured.”
Musk later reaffirmed it could potentially be the best move. Making Tesla a private commodity, he tweeted, remove the burden of the “pressure from Wall Street expectations.” He later emphasized in a tweet that the decision was not final. However, the damage was already done.
These tweets were also unrealistic. Making Tesla private would cost roughly eighty billion dollars, including Tesla’s debt. While he ultimately did not make Tesla private, he was sued by the Securities and Exchange Commission (SEC). In the SEC complaint, they claimed Musk’s “funding secured” tweet was “false and misleading,” as were his following tweets during the day. As a result, Musk’s tweet caused “significant confusion and disruption in the market for Tesla’s stock and resulting harm to investors.” His tweets also caused outrage from both technology and financial columnists in the media.
One month later, Musk told Buzzfeed News Unsworth had moved to Thailand to take a child bride. Two days later, Musk smoked marijuana on comedian Joe Rogan’s popular podcast. With all of these negative incidents happening within the span of just one month, two of Tesla’s top executives resigned the day after the podcast. Tesla’s share prices fell to almost its lowest point of the year. There was concern about Musk’s leadership ability and even calls for him to resign as CEO of Tesla and SpaceX.
Musk attempted to rebuild Tesla’s image by debuting their plan for their fully autonomous line of vehicles at an event called Autonomy Day on April 22, 2019. At this event, Musk said Tesla would have one million completely autonomous “robotaxis” on US roads by 2020. Musk also stated Tesla owners could make as much as thirty thousand dollars per year if they designated their car be used as a “robotaxi” when they weren’t using them.
As far back as 2016, he stated Tesla would be producing autonomous vehicles. He also said there would be a completely hands-free cross-country drive by a Tesla autonomous vehicle in 2017. Neither of these predictions proved to be true.
I discussed the possibility of autonomous vehicle companies forming fleets of “robotaxis” as an initial commercial deployment with a graduate student friend in Beijing. He said for Tesla, “The FSD (fully self-driving) service will be a subscription service like Netflix. You pay a certain fee every year, or every month, and the function will just work for you.” He stated this approach makes sense for Tesla because it owns the entire technology stack, including the vehicles themselves. However, a variation of this model could also be used for technology companies like Baidu and Waymo. He said, “We (technology companies) can just rent it out to other companies and say, ‘you can use it to make as many cars as you want, but you have to pay us X amount every month for using the data, algorithms, stuff like that.’” Therefore, Musk was trying to create an alternative business model to offset the increased cost of the vehicles themselves.
In an email to Tesla employees, Musk proclaimed Autonomous Day was “a great day for Tesla! The Autonomy Day was extremely well-received.”
However, many tech columnists remained skeptical. According to a CNBC article, published one day after the event, Musk “presented bold, visionary promises that only his most loyal followers would take at face value.” Specifically, they pointed out perfecting the technology for Tesla vehicles to drive fully autonomously within one year was very unrealistic. Due to falling production of Tesla vehicles, the goal of manufacturing one million vehicles was questionable as well. Finally, the salary earned by a driver from a ride-hailing app, such as Uber or Lyft, is too low for the expected money Tesla owner could expect to receive from converting their vehicle into a “robotaxi.”
Musk Needs to Let His Achievements Do the Talking
While most of his predictions have been wrong, he was able to make one correct prediction. Back in 2018, Musk declared he would make one million electric cars by 2020. On March 10, 2020, Musk posted a tweet, saying, “Congratulations Tesla team on making our 1,000,000th car!!” Along with the tweet, he posted two photos. One photo was of the car itself, a shiny, red Tesla electric crossover vehicle. The other photo was of the entire Freemont, California team where the car was built.
Elon Musk has incredible vision for new trends and markets to pursue. This vision was evident with his first ventures as an internet entrepreneur. He then changed paths completely, spending all of his money on two risky ventures with Tesla and SpaceX. Because of his leadership, he has made Tesla one of the most popular vehicle brands in the US and one of the premier electric vehicle companies in the world. He has also laid the foundation for the autonomous vehicle industry’s success with the popular semi-autonomous Autopilot feature on his Tesla vehicles and creating an OTA system for downloading updates for these vehicles wirelessly.
All he has to do is make the media less of a villain and more of an advocate. Most of his missteps in this regard are self-inflicted. The vehicles he has created, his investment in things like charging infrastructure, the successful launches of goods, and now people in his rockets at SpaceX should do the talking for him. He’s the one person in the autonomous vehicle industry in the US who draws enough attention to make autonomous vehicles as trusted and accepted as he’s done with electric vehicles…if he chooses to do so.
This article concludes the article series from my book, The Future is Autonomous. Over the last few months, I have broken my chapters into two articles for each chapter and shared these two articles every week with all of you! I hope that you have all enjoyed them, learned from them, and maybe will join me in advocating for laws governing them in your local states and in Congress!
Learn more about the technological difficulties in making a vehicle drive itself. The new business strategies proposed by leaders of companies to incorporate this new technology into the existing auto industry, or how these vehicles are effected by the technology and trade competition between the U.S. and China.Read my book on the link below nad don’t forget to review it on Amazon and Goodreads if you like it!
Link to my book on Amazon: https://www.amazon.com/Future-Autonomous-China-Develop-Driverless-ebook/dp/B08PVRL38J
