Tesla, Musk's forward escape creates uncertainty about the company's future

In the end it came to pass: Tesla failed to reach its own target of producing 2,500 Model 3 cars in the last week of April and fell well short (2,020 units/week) despite the enormous effort made by the entire workforce at the factory, with Elon Musk himself at the helm and even sleeping on the plant floor as an example for his employees.

The excess of automation applied to the mass production of batteries and of the vehicles powered by them overwhelmed the project. To try to recover, Tesla had to resort to more traditional semi-automated solutions as a stopgap while the problems were resolved, attempting in this way to reach the planned targets, although in the end it could not.

But besides its production problems, Tesla has had to face the continuous and more than suspicious departure of executives from the company in recent months. The departure of the company’s financial head, the director of the Autopilot autonomous driving programme, and the head of sales is joined by that of Matthew Schwall, Tesla’s main contact with US regulators, who has just joined Waymo, Google’s autonomous car company. Also notable is the “sabbatical year” taken by Doug Field, Tesla’s senior vice president.

Tesla’s shares have fallen 2.5 percent in recent days and have already dropped more than 5 percent so far this year. The departing executives all sold their respective shareholdings at peak prices before leaving the organisation.

But Musk is not hiding and has once again shown his face for Tesla and its future. The chairman of SpaceX decided to increase his stake by buying a new block of 33,000 shares in the company himself, a purchase worth roughly 10 million dollars, in response to rumours about certain shareholders exiting the company’s capital. At the beginning of this May, for the first time since Tesla has been listed on the stock exchange, the number of shares sold on the short-term market exceeded 40 million, a clear sign of growing loss of confidence among investors.

Musk has predicted “the burn of the century, soon” for the investors who have abandoned the company in recent times. The American financier refers to the departures of his collaborators as a plan to “slim down” the company’s top leadership and make it more operational and quicker in decision-making and in implementing those decisions. Musk has said that his plan involves the “elimination of activities that are not vital to the company’s success in achieving its objectives”.

Musk has directly and personally taken over the management of the company in an attempt to redirect its course before the next Shareholders’ Meeting on 5 July, where, as everything suggests, various groups of investors could be preparing his possible removal as the company’s top executive.