The Annual Tesla Shareholder meeting took place yesterday (6/3/14). During the event CEO Musk made some revealing off the cuff comments. One of the bombs he casually dropped had to do with the postponement of an announcement about the location of the Gigafactories until the end of the year.
This news may or may not have a negative effect on the stock today. The more important story is CEO Musk’s realization (anagorisis) that he is cast in the inescapable role of the Tragic Hero and must make some difficult choices soon.
Art on Wheels
Before I discuss his predicament, however, I would like to point out that he is also the wry playwright in this Greek drama. It’s clear from Musk’s remarks yesterday that he studies automobile consumers carefully in order to maximize their ownership experience, much like a playwright scripting a series of scenes for dramatic effect.
Musk revealed that he is exquisitely sensitive to every nuance of the consumer experience, from the contemplation of purchase, to taking delivery of the car, to opening a car door (what does the person see? how is it framed?), to everyday driving, charging and servicing.
The details matter because Musk wants the vehicle to be a literal work of art on wheels. His goal is unrelenting amazement, such that people will ‘like’ the Model S even more than their own home.
So what’s tragic about this?
The classic Tragic Hero faces an obstacle that he/she cannot overcome. In response, however, the Hero finds qualities hidden deep inside that elevate his/her thinking, choices and behavior to a higher standard. The redemptive irony is that by facing his/her fateful failure, the Hero transcends limitations, accomplishes the ultimate mission and the personal sacrifice serves as a timeless inspiration to others.
The Rub
So, here’s the problem. No matter how hard Musk tries, the company will barely move the needle of the global automobile industry during his lifetime. That’s the math of it: 100 million cars are made annually and two billion cars are already on the road.
Even if every car produced from today forward by every manufacturer in the world were electric, it would take 20 years to replace the global fleet. At 50,000 or even 500,000 cars a year, Tesla Motors’ production is a mere rounding error at the third or fourth decimal place. Presumably, one reason Musk wants to make “amazing” cars (his word) is his awareness of the relative insignificance of Tesla’s global impact.
Jack simply can’t kill this giant; but in the 21st Century Jack has another option… Jack can clone himself.
During the shareholder Q&A, Musk let it slip that he is considering giving away (or licensing inexpensively) the right to use key Tesla patents to competitors. Think about it. This is the only way Musk would be able to leverage Tesla Motors’ technology and thereby change the course of the transportation industry over next half-century, the time period that really matters to Musk.
It remains to be seen whether the audience (consumers, investors and analysts) will judge Elon for falling on his own sword, or praise him for finding a creative way to further his true mission of transformation.
More will be revealed in Act III.
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