Tesla’s In Trouble

Robert Taylor, Opinion Editor

There is little doubt in my mind that you have heard of Tesla, and of its electric cars. Maybe you have seen pictures of celebrities posing with the cars, or heard stories of their infamous issues with self-parking and automatic driving. Maybe you obsessively scan the news every day for information of the ill-fated company. To bring everyone up to speed, Elon Musk is the founder of this company, as well as five others, and as of September 28, he is CEO of Tesla, which manufactures electric cars.


Over the past several months, the extremely volatile stock has been on a decline from highs in mid-June and early August. At first, the drops were merely the hallmarks of a volatile stock, whose price depends primarily on how it is perceived minute by minute. At first, the declines and rises were due to orders, or lack thereof, for its cars, or due to fears that Tesla would not be able to reach production targets. However, in early August, Elon Musk tweeted “Am Considering taking Tesla private at $420. Funding secured.”



The only issue is that he did not have funding secured, as was quickly determined by investors. And the tweet seemed to be an attempt by the CEO to hike the stock price, to either profit off of his shares in the company, or, to cause people who were shorting, or betting against, the success of the company to lose money. In the past, Musk has made it clear that he hates people who short Tesla (which is one of the most shorted companies in history).


Between then and now, he has done the following: smoked marijuana with a comedian while talking about the potential failure of many of his companies, reportedly tweeted while using LSD and other psychedelics, and used the sleep drug Ambien. He also, unfoundedly, called a rescue diver a pedophile, been sued by the rescue diver over libel and defamation, and as of September 27th, been sued by the SEC over his aforementioned tweet. This last issue could result in him being unable to be CEO of a publicly traded company. This is not good. Tesla is in an indefensible position. They need to find a way through 2.5 billion dollars in debt that comes due this spring. The company’s stock price seems to be tied to their eccentric founder who has a lack of boundaries and may be removed from the company by the SEC, a move which Barclays reports could cut Tesla’s market value in half. Even with Musk there, many investors consider the stock uninvestable with him there, because he is seen as too big of a risk.


Tesla has been going through “production hell” and has transitioned into “logistics hell” according to Elon Musk, which is not an inspiring statement to hear. Europeans have had issues getting replacement parts for their Teslas, as have Americans. Established car companies have plans for electric cars which will naturally decrease Tesla’s market share. Nothing here is good; there is nothing redeemable about Tesla.