Tesla drivers are loyal, if not rabid, followers of the company – some even confess to waiting in line outside the factory for delivery of the long-awaited Model 3. Customers and employees alike have bought into the thrill of driving a luxury car that still lets you feel good about yourself.
“I mean, you can buy your way out of climate change by getting yourself a luxury car and driving fast!” raves CNBC tech writer Lora Kolodny. “Who wouldn’t want to take part in that?”
But despite having the top-selling luxury car in 2018, Tesla has been facing major challenges as a company. In August, maverick CEO Elon Musk was slapped with SEC charges over some rather fanciful tweets that hinted at a potential share price of $420. That move cost him and the company millions in fines, and forced Musk to step down as chairman.
Other skidmarks for Tesla include production delays and cost overruns. The Model 3 comes with a $35,000 price tag, but that doesn’t mean the company will break even.
“It’s a game of pennies,” says GreenBiz analyst and Tesla-watcher Katie Fehrenbacher. “So say if there’s a $35,000 car there's $10,000 parts, they’re at 350 they need to get down to three dollars a part. So they’re just cutting costs at any point possible.”
Although Tesla has led the charge toward electric and autonomous driving, other automakers are eager to catch up, and Tesla faces stiff competition from Detroit and Silicon Valley. Adding to their woes are shareholder skittishness as well as some well-publicized workplace complaints. Hamish McKenzie, who worked as a lead writer at Tesla and has just published a book on the company, offers an insider’s perspective.
“I don't think it's spilling any secrets to say that it’s a difficult place to work,” he tells Climate One. “There been lots of reports about how demanding the big boss can be, and how demanding the circumstances can be, and how much of a sacrifice people are expected to make” to buy into Musk’s electric dream.
“Without that greater sense of mission, I think people would lose more patience more quickly.”
It’s been a wild ride so far. What’s next for the health of Tesla, its overall impact on the auto industry and its future as a leader in the green economy?