Viswanathan K's Thoughts

As Tesla launched its car models, a pattern emerged, writes Tim Higgins. “The juxtaposition of praise and doomsaying would become a hallmark of publicity for Tesla for years to come.” The praise was for the cars. The doomsaying was about the financial prospects of the company itself.   Elon Musk had to manage this contradiction throughout the company’s history. The danger that the predictions of bankruptcy would become a self-fulfilling prophecy was all too real. One way Musk handled the situation? “People at this point ought to be a little more optimistic about the future of Tesla because we’ve confounded the critics at every turn so at a certain point people have to get tired of being wrong”, Musk said with his typical bombast.”   Confidence, bordering on asking for the impossible, became Musk’s style: “Announce something, then figure out how to make it happen.”   Musk is/was also the master of selling a dream. He also owned SpaceX, the rocket compa...

When Tesla started off, there were no battery manufacturers who had either the reliability or the volumes (quantity) needed for a niche electric car wannabe (like Tesla), let alone one with mass market ambitions (delusions?). The supply chain then was yet another challenge Tesla faced, writes Tim Higgins.   Early on, one of its lithium-ion battery suppliers, LG Chem, sent it a letter with a dire demand: Return our batteries. Why? There had been several high profile issues with lithium-ion batteries – one incident involved a fire on a cargo plane (a different manufacturer); another was Apple’s recall of 150,000 laptops (batteries by LG Chem). After those incidents, LG Chem’s legal department was worried that the any fire in a car would bring lawsuits on LG Chem as well.   Tesla’s assumption that it would create the market and therefore new battery suppliers would join in was proving to be wrong. The reason for the lack of interest was the same as LG Chem – the fear o...

Car companies sell their vehicles through dealers. Elon Musk though decided the best way was for Tesla to sell the car directly, writes Tim Higgins . But this brought the company into “unchartered territory” – in most American states, car companies are not allowed to sell directly to customers!   Given that Tesla had enough challenges – building a car company from scratch, not just another car but an electric one, and the need for huge cash investments – why was Musk trying to create one more challenge for the company? Well, Musk ideologically hated the “hard sell” approach – coming from the Internet age, he felt a great product would sell itself. In addition, Musk understood that buyers would need to be educated about electric cars – and for that, he didn’t trust the dealerships; instead, Tesla should build its own sales team. And yet: “He tended to show little interest in the boring nuts and bolts of sales operations.” This is just one of many contradictory stances Musk...

Building a car company takes enormous money. When Elon Musk invested in it, it was just an idea of its founders, Martin Eberhard and Marc Tarpenning. Musk (correctly) told them that their estimates of how much money was needed to launch their first car was too low. But even Musk’s estimate, while higher, would still prove way too low, writes Tim Higgins .   Musk comes from a Silicon Valley background and mindset. He just assumed venture capitalists (VC’s) would invest in the company. Wrong! They were used to risking smaller amounts in startups that could launch a product quickly – in other words, VC’s only invested in software companies: “A car company just wasn’t something most investors were conditioned to consider.”   When Tesla just had a working prototype of its sports car, the Roadster, Musk being Musk, decided to show it off, let people take a test drive. The pickup was awesome, the experience great. Folks who assumed an electric car would be worse in perform...

Tesla, the electric car company. It was founded in 2003 and named after the inventor, Nikola Tesla. In 2004, Elon Musk became its biggest investor. As the company’s ambitions grew, Musk would take over. In 2006, he published the company’s “secret master plan” in a company-wide blog: “ In short, the master plan is: 1) Build sports car 2) Use that money to build an affordable car 3) Use  that  money to build an even more affordable car 4) While doing above, also provide zero emission electric power generation options Don't tell anyone.”   As I read Tim Higgins’ wonderful biography of the company, I think this can be the 0ne-line summary of the book: Tesla executed that “secret master plan”.   In his typical bombastic style, Musk claimed that the intent of the company was to “help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy”. Why then start with a sports car, you ask (Step 1 of the secret master plan ...