For Investors, Tesla's Musk Remains One of America's Greatest CEOs

Cars and Drivers

Published: July 12, 2016 9:45 am

Last Updated: January 13, 2020 5:50 am

Over the past five years, shares of Tesla Motors Inc. (NASDAQ: TSLA) have risen 667%. By way of comparison, Amazon.com Inc.’s (NASDAQ: AMZN) shares have risen 248% over the same period. Tesla may be in the midst of investigations about whether it disclosed the death of one of its car owners and the overall safety of its Autopilot system. However, the system has not been entirely blamed for recent crashes. Tesla’s stock price has weathered other challenges. It might well weather these.

It would be wrong to shrug off the recent accidents, although the driver of at least one of the cars has been ticketed for his driving at the time of the crash. According to Bloomberg:

Pennsylvania State Police cited the driver of a Tesla Model X sport utility vehicle involved in a July 1 crash that may have involved Autopilot technology for careless driving, according to a report released Monday. Meanwhile, another Tesla driver has told Montana police that Autopilot was engaged during an accident that occurred on Saturday.

Another case against Musk is that he has failed to meet an ambitious delivery schedule, as well as concerns that the new inexpensive Model 3 next year won’t launch on time. Critics also say his goal of delivering 500,000 cars a year by the end of the decade is improbable. That likely means Tesla’s Gigafactory full production will not happen in 2020 as Musk has said.

Finally, investors worry that the Tesla takeover of SolarCity Corp. (NASDAQ: SCTY) is financially self-serving for Musk and his closest associates. Many critics say the two businesses are barely related.

Holes in Musk’s armor have started to appear, as the press and Wall Street have pointed out for several weeks.

Whether Musk is nothing more than a showman remains an open question. Is he a showman like Amazon founder Jeff Bezos, who drove his company to low margins as part of a plan to make Amazon the leader of e-commerce in the United States, one of the world’s largest cloud companies and a major competitor in the streaming media sector? Musk has years to go to prove he is anywhere close to a match for Bezos.

While Wall Street waits all the years it will take to find out what class of CEO he is, Musk has made his long-term investors a fortune.

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