Elon Musk and Tesla: A Business Parable for Our Times

A recent column in the Daily Telegraph, though not related at all to Tesla, offered some words of wisdom that are uncannily relevant to the besieged (though still very rich) Elon Musk.

Here is the passage that caught my eye:

Gordon Brown, a former UK chancellor and prime minister, used to joke that there are only two types of chancellor – those who fail and those who get out in time.
Sadly for Mr Brown, he fell into the former category; he’d only just moved from the Treasury to No 10 Downing Street when in swept the financial crisis, holing his own government below the waterline.
But it’s not just politicians such as Mr Brown to whom the observation applies. With almost any high flying career it’s the same, and it is particularly true of corporate chief executives.
Stay too long in the job, and eventually you’ll be found out
Timing is all in these jobs; the trick is to join at the bottom, and leave at the top.

Those of you of a certain age will recall an episode of Seinfeld in which this precept was brilliant illustrated. In that episode, the hapless George Constanza discovered that he was able to prosper in his career if he left his colleagues wanting more rather than less. Accordingly, he would leave meetings on a high note, whenever he felt he’d peaked, often after a well-received joke.

Nobody is omniscient. Nobody is infallible. Nobody in real life is a Marvel superhero.

We all have strengths, and we all have weaknesses. Some of us have more strengths than others do, and some of us make better use of our strengths than others do. Similarly, some of us have more weaknesses than others, or weaknesses that nullify or neutralize our strengths, or — in especially tragic cases — a single fatal weakness that overrides great strengths, like Achilles and his vulnerable heel.

Elon Musk has been feted and lionized in the popular business press, and he’s been venerated online by his legions of followers on X, formerly Twitter. I don’t think their servile flattery has done him any favors. There’s always a thin demarcation between swaggering confidence and delusional narcissism; the panegyrics of fanboys can push even an otherwise balanced person into a delusional abyss.

Dealing with Doubt

But does it matter?

In the current age, I wonder occasionally, during my frequent dark nights of the soul, whether my reasonedweltanschauung remains pertinent. Does it actually matter if one tries to be conscientious, scrupulous, and thorough?

Perhaps I’ve had it all wrong. All these years of obsessively striving toward self-improvement, refining logical reasoning, attempting to achieve and maintain equanimity (admittedly, I’ve had mixed results on that front), consciously empathizing with others, and practicing humility and restraint seem misguided in an era when the people who run large parts of the world ostentatiously showcase relentless self-promotion, hubris, cruelty, meanness, corruption at scale, and a jaw-dropping lack of self-awareness. I always thought that it mattered to do things in the right way, but maybe I was wrong. Perhaps I wasted a lifetime playing by a set of rules, and adhering to a set of ethical guidelines, that have outlived their usefulness.

I sometimes despair when I imagine the future, when today’s youth, observing and drawing life lessons from this benighted era, finally come of age. How will they manage the affairs of the world when their turn comes to exercise power? What are they learning from this three-ring circus of irresponsible fiat?

These are dark thoughts, but I can’t help thinking them.

Then again, maybe there’s still time for the young to quaff a corrective tonic. In that regard, the rise and fall of Elon Musk and Tesla might be instructive.

I’ve written in the past about some of the major missteps Elon Musk has made in his role as Tesla’s CEO and overlord. Unlike historical industry titans, going all the way back to the dastardly robber barons of the 19th century, Musk craves personal attention and the trappings of celebrity. He doesn’t seem to comprehend that celebrity is a double-edged sword, superficially gratifying for the ego — mollifying any personal insecurities — while also painting a fat target on the back of those who wear its ostentatious mantle.

In the past, those with real power and astounding wealth understood that they were advised to pull strings and play puppet-master from the backrooms and the shadows. Hired help could receive the mixed blessing of strutting the public stage. Actors and entertainers come and go, with the passage of time and the whims of fashion, but generational wealth and the power to confers, if managed carefully, can endure for centuries. One of the keys to such longevity is staying out of view while remaining in control.

The Spotlight is the Line of Fire

Musk, habitué of Twitter and guest on countless podcasts, has thrust himself gleefully into the public eye, which is also the line of fire. That was a big mistake, and he didn’t stop there.

Already drunk on the intoxicating brew of celebrity and fame, Musk decided to stagger into the degenerate dive bar of partisan politics.

What was he thinking? Nothing good could come of it, and nothing good did come of it. By not only exorbitantly and publicly bankrolling the Trump II presidential campaign but later volunteering to establish and run the quasi-official Department of Government Efficiency (DOGE) — every time I’m forced to type that acronym, I wince — Musk effectively alienated, perhaps permanently, a large percentage of actual and prospective buyers of Tesla electric vehicles. He then somehow made matters worse by gloating over the terminations of U.S. government employees by gleefully wielding a chainsaw — a la Javier Milei — and unaccountably giving Nazi salutes at Trump’s inauguration festivities.

(Brief aside: I could write a entire satire about how male authoritarian politicians have a fetishistic affinity for elaborate hairstyles — from Trump to Milei to the Netherlands’ Geert Wilders and, at a push, even Boris Johnson, whose hair fits the bill but whose politics are more bumbling Berlusconi than autocratic despot. Is the hair thing a reaction to Mussolini’s ignominious fate?)

Not surprisingly, buyers of EVs have taken a dim view of Musk’s antics. On the way up, Tesla’s stock touts, including Wedbush’s Dan Ives, liked to say that Musk was Tesla and Tesla was Musk. That solipsistic identification of man and company worked when Musk was viewed, perhaps unfairly, as a faultless genius, but it doesn’t pay the rent when the would-be genius has devolved into more idiot than savant.

A recent report in the Times (UK) provides some detail on just how much Musk has lost the automotive showroom:

The European Automobile Manufacturers’ Association reported that Tesla sales last month fell 28.2 per cent against a 23.6 per cent increase in overall battery electric vehicle sales. Total new car sales in Europe rose 2.8 per cent in the month, boosted by double-digit jumps in Britain and Spain, as EV gains offset a fall in sales of petrol and diesel cars, the data showed.
Tesla’s sales fall in Europe adds to signs that drivers are shunning Elon Musk’s electric car brand as competition from China stiffens and some protest against his political views.
New Tesla electric-vehicle registrations across Europe, Britain, and the European Free Trade association fell for a third consecutive month in March to just 28,502 units, according to figures published on Thursday by the association.

Teslas and Tesla dealerships have also been vandalized throughout the United States and Europe. Obviously there’s no justification for vandalism and wanton destruction of property. I’m certainly not going to condone such behavior; Musk and others are right to condemn it. Everything else, however, including boycotts and an aversion to Musk and the brand with whom he is identified, is fair game. When voting with their wallets, people have the inalienable right to make their own choices, for their own reasons.

Invisibility as a Curse

Strangely, Musk doesn’t see the part he has played in this debacle. He accusingly points the finger of blame at everybody except the guy in the mirror, who must possess, aside from all attributes, the superpower of invisibility.

It is at this point in today’s discourse that I must ask the following question, not entire in jest: Does Musk have a business death wish? I think we’ve reached a point where we must consider the possibility.

Another problem for Tesla is Musk’s persistent reality distortion.

I don’t know how to break this to some of you, but despite what Musk says, Tesla is a car company. It should be trading at car-company multiples. You can argue with a degree of legitimacy that Tesla has been an exceptionally good car company, and, on that basis, that it should qualify it for a higher car-company multiple. But that doesn’t change the fact that Tesla is an automotive company. Tesla is not an AI company, and it’s not a robotics company — at least not until it has credible and market-leading AI and robotics products on the market.

And yet Musk insists, against all evidence to the contrary, that Tesla is not an automotive company. Who are you going to believe — Elon Musk and his hallucinatory fantasies or perceptible reality and your own cognitive faculties?

Indulge me as I riff more expansively on this theme.

Musk talks as if Tesla is the only automotive company pursuing robotics. That’s not true. Several companies, in China alone, are already ahead of Tesla in both advanced EVs and the development of sophisticated humanoid robotics.

Yes, Tesla is developing its Optimus humanoid robots, positioned by Musk as a labor force of the future. Progress is apparently being made at Tesla, and Musk promises further breakthroughs. Maybe Tesla will get there, but as Reuters recently reminded us, Elon Musk has a history of embellishment, exaggeration, and unfulfilled promises. To his credit, Musk also concedes that the intensifying trade war between the U.S. and China has temporarily put a spanner into Tesla’s robotic works.

Meanwhile, several Chinese EV companies are active in robotics. Among those developing electric vehicles and humanoid robots is XPeng, (Xiaopeng Motors), whose humanoid robots are being tested in the company’s EV manufacturing facilities. The company has claimed its robots will find gainful employment beyond the factory floor, in settings including offices and retail spaces. Apparently, XPeng is also developing a flying car, presumably without humanoid robots at the wheel.

Also involved in both EVs and robotics is GAC Group (Guangzhou Automobile Group), which has developed humanoid robots that are scheduled to be deployed in the company’s manufacturing facilities in 2026.

Build Your Dreams (BYD), already a prominent brand in EVs (perhaps that’s an understatement), has established a research lab dedicated to the development of humanoid robotics. BYD is not as far along as the two companies mentioned above, but its resource allocations suggest serious intent to close ground.

NIO, another Chinese EV company, has tested robots from UBTech, a Shenzhen-based robotics firm. NIO has also formed its own dedicated R&D team to develop and manufacture humanoid robots.

As NIO’s partnership with UBTech suggests, China’s robotics reach extends well beyond the confines of EV companies. Indeed, China’s fledgling robotics industry is growing rapidly, and several companies seek differentiation across a spectrum of submarkets and applications, including industrial robots, service robots, and other niche robotics markets. Additional partnerships between EV and robotics companies, similar to the alliance between NIO and UBTech, are possible.

Proliferating Robotics

My point is not to extol the work that Chinese EV companies are doing in robotics, but to point out that Tesla is far from alone in combining EVs and humanoid robotics under the same corporate rubric.

Robotics work is happening elsewhere in the world, too, and automotive companies outside China are involved in their own initiatives and partnerships with companies that specialize in robotics. One example is the investment that BMW has made in, and the work it has done with, Figure AI.

Even though humanoid robotics is an area where Tesla hopes to achieve enough meaningful commercial traction to justify a valuation well above those typically associated with an automotive company, the robotics market is intensely competitive. Tesla is arguably behind in this race, and it must overcome supply-chain challenges that Musk has already flagged.

Perhaps Tesla will gain ground in robotics and rehabilitate its tattered EV brand, but Musk’s has blotted his form with enough poor judgement to have lost any benefit of the doubt. He did this damage to himself, and to his company, and he needs to own up to it and accept full responsibility for the value destruction he has caused.

Too many people have indulgently bought into Musk’s aspirations and visions at a considerable price premium. Until Musk demonstrates that he is fully committed to Tesla, and shows that he can deliver on his promises, investors are advised to tread warily.