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What is the future of Tesla? Electric rivals, delayed models and Twitter buy-out raise questions over the long-term plans for the American electric car maker | Opinion

Tesla's future is more unclear than ever with Elon Musk's purchase of Twitter.

Yes, that headline will surely make the keyboards fire up with a mixture of ‘I told you so’ and ‘how dare you doubt Tesla’ - but let’s all take a deep breath and ask ourselves that question in a neutral tone.

What is the future of Tesla?

For all the haters and doubters, there can be no question that Tesla is a modern American success story. It popularised the electric car, acted as a catalyst for industry-wide change and is (currently) profitable.

On the flipside, the company has been plagued by production issues for years, its much-hyped Cybertruck and Roadster are years overdue, and the company’s boss is rapidly selling off shares in order to fund his new interest - Twitter.

Let me make one thing clear from the beginning, this is an automotive website, so we’re not going to question whether or not buying Twitter was a good idea or not from a business or social point-of-view, but focus on looking at Musk’s takeover through the prism of what it will mean for Tesla.

In simple terms, the biggest difference between the Musk pre-Twitter and post is he owns a lot less of the car maker. He has sold a total of 37 million Tesla shares in three transactions between April and November this year, providing him with US$19.3 billion in cash. 

Musk hasn’t officially explained the sale of the shares but clearly some (if not all) of that money will help his US$44 billion purchase of Twitter and there were some tax obligations he was required to pay. But it also suggests there’s a desire for Musk to sell down his stake in Tesla amid the long-running question marks surrounding its long-term future.

The fact that his sale of 7.92 million shares came just days after Tesla’s annual shareholder meeting on August 4 and despite him stating in April that he had “no further” Tesla stock sale planned at least raises questions of his own faith in his car company. Certainly, you don’t have to be a cynic or anti-Tesla type to question his motivations, especially when he offloaded even more (19.5 million) in November.

Despite his multiple sales this yea, Musk still has more than 166m Tesla shares.

Having said that, despite his multiple sales this year he still has more than 166m Tesla shares, so his fortune is still tied to the fate of the car brand.

Overall, 2022 hasn’t been a positive year for Musk’s personal fortune, with his wealth dropping from US$340b to ‘just’ US$179.5b (at the time of publication). Still, he remains one of the richest men in the world and his decision to buy Twitter only increases his public profile.

Twitter has, at least publicly, become his primary focus but there is still much work to be done to secure Tesla’s future amid a growing armada of electric vehicle rivals from other brands. Tesla remains a popular brand and is now profitable after years of struggle, but with so many other car makers now fully engaged in the EV market it will only become more challenging for Tesla to remain that way.

In a sign of how desperate Tesla was to continue producing cars, Musk ordered staff at the Fremont, California assembly plant back to work in May 2020, at the height of the COVID-19 pandemic, in contradiction of the local health regulations. Such an obvious disregard for the local laws suggests Tesla needed to get its production line moving again to keep the business afloat.

It may sound dramatic or cynical, but in 2018 Musk told US news outlet Axios that Tesla “came within single-digit” weeks of closure, so there’s no reason why the pandemic couldn’t have pushed it to the brink again. And while that’s now four years ago and the Model 3 and Model Y have been successes for the company, the reality of the past few years with a global pandemic and supply chain crisis means Tesla cannot be considered too big to fail yet.

There’s no question Musk is a smart man, but any one of his jobs - running Tesla, SpaceX and now Twitter - is a demanding, full-time occupation and he’s doing all three at the same time. This has, quite rightly, raised the question of whether he’s spreading himself too thin and what impact that will have on Tesla? After all, at some point even a genius needs time to apply his or her creative mind to any particular task.

The much-hyped Cybertruck is years overdue.

Musk has been the driving force behind Tesla, at times working as much as 120 hours per week and even living at his factories in order to see projects through to completion. With the Cybertruck still in a seemingly constant state of delay and the Roadster publicly no closer to production, there’s a very real need for Tesla to make progress with both these models.

Having four electric vehicles is good (Model 3, S, Y and X) but can it sustain itself in the long-term without the Cybertruck - and more - to grow its appeal?

Ford has made it clear that it will follow Tesla’s example and have a slow, deliberate build-up of its electric models, with a focus on maximising the profitability of the Mustang Mach-E and F-150 Lightning rather than rushing into an expanded range with electric variants of multiple models.

If a motoring giant like Ford is taking Tesla seriously, then underestimating the brand is a fool’s errand. But questioning its future, particularly now that its undisputed leader has another huge task to occupy his time, is a valid pursuit.

Will Musk prove his doubters wrong again and (finally) deliver the Cybertruck and continue Tesla’s growth? Or will he grow bored of cars and devote more of his time to Twitter and space? 

One thing is for sure, Tesla has become too successful for it to simply disappear, so even if it runs into trouble, it’s hard not to see another brand (General Motors? Ford? Stellantis?) step in and add it to a broader portfolio.

If 2022 has proven one thing about Musk it’s this - he’s happy to sell Tesla shares…

Stephen Ottley
Contributing Journalist
Steve has been obsessed with all things automotive for as long as he can remember. Literally, his earliest memory is of a car. Having amassed an enviable Hot Wheels and Matchbox collection as a kid he moved into the world of real cars with an Alfa Romeo Alfasud. Despite that questionable history he carved a successful career for himself, firstly covering motorsport for Auto Action magazine before eventually moving into the automotive publishing world with CarsGuide in 2008. Since then he's worked for every major outlet, having work published in The Sydney Morning Herald, The Age,, Street Machine, V8X and F1 Racing. These days he still loves cars as much as he did as a kid and has an Alfa Romeo Alfasud in the garage (but not the same one as before... that's a long story).
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