Electric cars

Tesla CEO Elon Musk’s Plan To Take Tesla Private

Shortly after an article by the Financial Times confirmed that the Saudi Arabia’s Public Investment Fund had amassed a $2 billion stake in Tesla, Tesla CEO Elon Musk announced that he was considering taking the company private with a share buyback at a $420 price point. His initial tweet was confirmed within a few hours with a new blog post on Tesla’s website, where the company shared an internal email from CEO Elon Musk to all Tesla employees sharing his logic for the move.

He started off the email noting that “a final decision has not yet been made,” but that the move was being seriously considered to insulate the company from a few specific issues that have been distracting the company of late. Elon hopes the move would reduce the internal swirl caused by the massive stock swings it experiences as a publicly traded stock. Having worked in a large publicly traded company that experienced both stock highs and lows for nearly two decades, I can attest to the change in internal morale of a company when employees are vested in the success of the company on Wall Street.

Martyn1981 wrote: »

As to why your theory/claims are wrong, I don't know, I've made a few suggestions and guesses to help you out, but the issue was can long established companies easily switch from ICE's to EV's, and it seems to be a lot harder than you thought/think.

The main reasons are financial and strategic (which works back to financial).
Tesla can produce EVs because all they do is produce EVs.
If (say) Ford starts producing EVs they have to calculate how the profit they make on those EVs compares to what theyd make on an ICE (whose R&D costs are already amortized ) and the sums wont look pretty.
Also if they make a great EV, it makes their equivalent ICEs look somewhat pathetic. Why would customers buy those now? So now you are cannibalising your profitable ICEs and selling less profitable EVs.

And strategic, most ICE manufacturers "special sauce" is to do with engines and transmissions. If they go for EVs they are putting themselves on a level playing field with pretty much anyone else who makes EVs. They have no expertise in EV manufacture, as said even GM had to outsource.


So when they do go for it the timing needs to be right, they need to have profitable EVs, at least as profitable as their ICEs, so battery costs need to be lower than now, but they they also need to factor in that if other manufacturers get into EVs first, they may take away market share of their EVs. eg lets say that VW have an awesome EV with the Golf replacement, maybe that will eat the equivalent Ford (what would that be a Focus maybe?) so Ford do need to calculate hwo that plays out.

And they need to have battery supply lined up, that's very non trivial hence VW spending umpty billion on battery supplies. Unless you can raise the finance to do that, making EVs in large numbers isnt possible anyway so maybe its better to lose 5% market share than spend billiosn to produce a handful of EVs. The numbers of Bolts that GM are making are a drop in the ocean compared to their other production.

And even now many execs at IE manufacturers are still sceptical, or selfishly would rather squeeze out a few more years of high ICE profits and get out witha big payoff leaving the younger generation of middle range execs to worry about how to square this circle.

And lastly its structural, their route to market is via dealers, dealers get nothing from EVs because there is so little servicing needed. Thats another tough problem to solve.

Not all ICE manufacturers will solve all these dilemmas. 10 years time quite a few will be gone.

NBLondon wrote: »

I think you took it off into a different question...
I wasn't just talking about being first into a market segment but about consistently/sustainably making a profit in that segment. Otherwise the Hammerhead Eagle iThrust has the range extender sports car segment sewn up and the BMW i8 is doomed to failure:D

All of those comments relate to the 'electrification' of different US car segments.

I believe my comments are very simple, clear and correct. Your misunderstanding is more than a stretch, it simply misses (ignores) what was being discussed.

So yes, I'm sure I mean/meant exactly what I said:
Namely...
You missed out the words "at the moment".

Seriously? It was a statement of fact at a point in time, not a future prediction. Again, I think you've misunderstood what I wrote.

zeupater wrote: »

Hi

it's happened time & time again in other manufacturing sectors, sector dominating companies at the top of their game being complacent and suddenly finding the rug pulled from beneath their feet & disappearing

HTH
Z

GM and Ford = Nokia and Blackberry perhaps?

AnotherJoe wrote: »

And lastly its structural, their route to market is via dealers, dealers get nothing from EVs because there is so little servicing needed. Thats another tough problem to solve.

What does an EV not require at a routine dealer service that an ICE car does?

Oil, an oil filter and an air filter? Everything else will be the same and, no doubt, some form of essential battery/charging system check will be devised to make up the losses.