There’s no lull in the Tesla news, even after last week’s epochal quarter for the company.
Tesla managed to log a 20 percent margin on the Model 3 and generate over $300 million in GAAP net income after selling a total of 83,500 vehicles — making it the nation’s first and only profitable pure-play, mass-market electric vehicle maker.
Model Y approved for production
After releasing those stellar third-quarter financials, Elon Musk took a small victory lap and answered questions from the analyst community.
Instead of nerd-philosopher Musk or weird-angry Musk, we got sensitive-leader Musk and less controversy than usual. Nevertheless, here’s some news and choice Musk quotes from the session.
Musk got a bit choked up as he thanked the customers who “cared about the future of the company so much that they volunteer their time to help the company succeed.”
Musk envisions a transportation future of “shared electric autonomy” with a long-term model that’s a “combination of Uber, Lyft and Airbnb.” Customers can share their car, “just like you share your house on Airbnb,” said the CEO. “The advantage that Tesla will have is that we will have millions of cars in the field with full autonomy capability, and no one else will have that.”
Contrary to the proclamations of equity analysts who believe that Tesla needs to raise billions to finance factories and new product development, Musk said, “We do not intend to raise equity or debt. At least that’s our intention right now.”
New product development continues as Musk claimed “significant progress” on the Model Y, Tesla’s Model 3 crossover. The CEO said that he “approved the prototype to go into production” and expects it to be in volume production in 2020. He also cited progress on the semi, the new Tesla Roadster and pickup truck.
Musk bemoaned the long product development time for the solar roof tile roof, saying he expects to be “getting into volume production” next year.
FBI probing Tesla misstatements
The “funding secured” fiasco is over; SEC fines have been levied and punishment meted out. But on Friday, The Wall Street Journal reported that the FBI is questioning Tesla regarding possible “misstatements” on Model 3 production figures dating back to early 2017. This is not a new investigation.
Several former Tesla employees received subpoenas, according to The Wall Street Journal.
In a statement, Tesla said it had not received a subpoena, a request for testimony or any other formal process from the FBI. This is a developing story, so stay tuned for updates.
Oracle CEO Larry Ellison talks Tesla
Larry Ellison, chairman of Oracle, digressed a bit at an Oracle analyst meeting to talk Tesla and here’s what we learned. (Starts at 2:21:40.)
- Ellison considers Musk a “very close” friend.
- The Wall Street Journal is his favorite newspaper.
- You haven’t landed a rocket on a robot drone.
- Ellison has a net worth of approximately $54.5 billion and Tesla is his “second largest investment.”
- He singled out Panasonic as a source of Tesla’s recent battery problems.
Let some fires burn
In light of Tesla’s metaphorical fires, whether they be reliability issues, production hell, delivery hell or all the other hells — it’s helpful to remember one of Reid Hoffman’s management tenets. “Smart entrepreneurs don’t try to fight every fire. They have to let some fires burn — and sometimes very large fires,” according to the contemporary of Elon Musk at Paypal.
Hoffman, in his podcast, Masters of Scale, speaks of how back in PayPal’s early days, “We neglected customer complaints, even as users grew exponentially,” saying, “The problem is we have to treat the future customers, not just the current ones.”
Musk might have taken Hoffman’s advice to heart: “If you spend all of your time fighting fires, you may miss critical opportunities to build your business. Deciding which fires you let burn, and how long you let them burn for, can make the difference between success and failure.”