Billionaire Elon Musk is not the end-all, be-all for Tesla because the electric-car company is “much bigger” than its famous CEO. That’s what Philippe Houchois, ...
Billionaire Elon Musk is not the end-all, be-all for Tesla because the electric-car company is “much bigger” than its famous CEO.
That’s what Philippe Houchois, an equity research analyst for the auto sector at Jefferies, believes.
“Tesla at this stage is much bigger than Musk,” Houchois told CNBC March 4. “Of course, Musk gets a lot of attention. But Tesla has been able to be profitable at a level of pricing and product that nobody expected to generate cash.”
Houchois — who does not own TSLA stock — said Tesla’s growth will “definitely” slow down in 2019. The electric-vehicle maker struggled in 2018 amid ongoing production and delivery delays.
Despite the setbacks, Houchois praised Tesla for being a pioneer, saying it’s actually doing things that other electric car makers only dream of.
“Every car maker dreams about the ability to sell cars online. They are implementing a number of developments that other car makers are only just thinking or dreaming about.”
The Jefferies analyst said Tesla’s long-term outlook is very bullish, especially since it’s cutting back on costs and is stabilizing its balance sheet.
“If they go into that phase reasonably successfully, I think there’s a very strong case that Tesla can be self-funded.”
As CCN.com reported, Tesla cut 7% of its workforce in January to reduce costs and increase production of its Model 3 line. The layoffs affect 3,000 of the company’s 45,000 workers.
However, Tesla has been roiled by Elon Musk’s history of posting irreverent tweets, which at times have alarmed shareholders.
That’s why CNBC analyst Jim Cramer recently said Tesla should fire Musk as CEO.
Cramer was reacting to Musk’s criticism of the Securities and Exchange Commission, which filed a contempt motion after Musk sent a vague tweet about Tesla’s 2019 production projection.
The South African mogul later clarified his tweet, but the SEC was furious that he did not get approval from Tesla lawyers before posting a statement that could impact the company’s stock price.
Musk is required to have his communications monitored under a September 2018 agreement with the SEC.
The Securities and Exchange did not specify what type of punitive measures it will seek if Musk is found in contempt.
However, the agency previously tried to get Musk removed as CEO. But the SEC does not make that decision. That’s up to Tesla’s board of directors or a judge.
Despite the SEC and media criticism of his freewheeling Twitter habits, Musk just charges ahead.
On March 3, Musk teased Tesla’s forthcoming Model Y. The SUV will be unveiled March 14 in Los Angeles, Musk revealed on Twitter.
Musk said the Model Y will cost 10% more than other Tesla cars because it’s 10% bigger. Musk has teased a Tesla SUV for four years, but it’s now coming to fruition.
Perhaps not surprisingly, Musk is stepping up his game now that Tesla is facing mounting competition from Volkswagen, General Motors, and Ford.
As CCN.com reported, Volkswagen is investing $800 million to expand an electric car plant in Tennessee. General Motors is also launching an all-electric Cadillac. And Ford says it’s investing $11 billion to make electric cars by 2022.
While most CEOs would feel threatened by the onslaught of such stiff competition, Musk apparently revels in it.
“The whole point of Tesla is to accelerate the advent of electric vehicles,” Musk told “60 Minutes” in December 2018.
If somebody comes and makes a better electric car than Tesla and it’s so much better than ours that we can’t sell our cars and we go bankrupt, I still think that’s a good thing for the world.”