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Published on November 13th, 2019 |

by Zachary Shahan

Tesla Critics Don’t Understand (Or Just Ignore) Tesla’s Mission

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November 13th, 2019 by Zachary Shahan

I used to find the debate between Tesla critics (most notably short sellers) and Tesla fans as somewhat interesting but mostly straightforward. Tesla critics somehow thought that Tesla inherently couldn’t make profits on its products. Tesla fans thought and explained how Tesla could. Tesla critics thought Tesla couldn’t learn the art and skill of efficient, smooth mass production. Tesla fans noted many times that this isn’t rocket science (ahem). Tesla critics thought major automakers would come out with electric vehicles superior to what Tesla offered and would thus kill the company. Tesla fans highlighted Tesla’s leadership in batteries, software, self-driving tech, design, customer communications, and overall reputation.

However, there’s another straightforward matter (or not-so-straightforward matter if you aren’t used to thinking about it) that I think creates as much of a disconnect as anything else. Many Tesla actions make much more sense when you take this into account, while ignoring it can bring you to many false conclusions. That matter is Tesla’s mission.

Whereas most companies have a clear one-two objective — 1) sell a lot of XYZ, 2) make a lot of money — Tesla has a core, fundamental mission that precedes those and sometimes overrides them: accelerate the transition to sustainable energy.

Some people can write that off as a tagline, but it most definitely is not. Some can say that Tesla now has a simplistic fiduciary duty to its shareholders, but its shareholders have definitely had ample time and opportunity to learn about and digest Tesla’s core mission, so they cannot ignore or deny its primacy. No one should be invested in Tesla without understanding that the company’s #1 goal is to transition society to clean technologies as quickly as possible. Of course, that also means staying in business — speeding up the transition this month to only die next month makes no sense. But it’s important to recognize that there are times when the mission overrides other matters.

I think the place this is most directly evident is with risk. CEO Elon Musk seems to be a risk taker at heart. If he’s not taking risks, he probably feels like something is lacking. Tesla would not accelerate the transition without a hefty helping of risk. Indeed, it is the risk (and cost) of a quick transition that holds traditional automakers back. It is why they sometimes have half-hearted electric offerings, why they didn’t jump into building battery gigafactories when Tesla did, why some of them still stay completely out of the battery production realm, why it takes so long for them to roll out moderately priced long-range EVs — they need mass-market economies of scale for that, and they aren’t willing to bet on that level of consumer demand.

Here’s a list of developments that Tesla might have made for pure business/financial reasons, but which may also have come from a mission to accelerate the transition to clean technology as quickly as possible:

Rolling out the Tesla Model S without a longer development/testing timeframe.
Setting up a Supercharger network.
In-housing battery pack production.
Setting up a gigafactory in Nevada years ago.
Buying SolarCity.
Developing a semi truck.
Developing a pickup truck.
Setting up a gigafactory in China in 2019.
Setting down its flag in Berlin for a 3rd automotive gigafactory in 2019.

Again, yes, some (or all) of these developments have been strategic business decisions expected to bring a positive ROI in the net. However, the striking factor in many situations has been how quickly or how early Tesla has jumped into these developments, and at such a large scale. To critics or skeptics, it seems like wild, high-risk behavior that is not sensible and has too high a cost or too high a risk of failure. To supporters, the point is clear: Tesla is pursuing its mission. Many supporters also have a strong belief that taking those risks at this time will lead to ongoing financial rewards. You may have to suffer some costs and drawbacks when being a leader, but true leaders get the glory, and sometimes the money, for a reason — they are well ahead of others.

Yes, setting up a gigafactory came with a high risk, but there was no clear option for getting to mass-market EV production without doing so. The same for the vast Supercharger network. Yes, buying SolarCity created some costs and challenges at a relatively young stage of corporate life, but it also enables integration of sustainable transport and sustainable energy generation and storage as a long-term play that is constantly undergoing testing, evaluation, development, and improvement. In 10 years, who will have the advantage when it comes to an integrated sustainable lifestyle offering?

Yes, Tesla financials skated close to the edge for years, but that was never because the company couldn’t easily make a profit if it just decided to do so and slowed down. It skated close to the edge for a reason — the pace is the point. Speeding up the transition is the point. Growing as quickly as possible is the point. Taking difficult risks — because the times call for it — is the point.

When you consider Tesla’s mission, everything Tesla does makes sense. It is not about making a profitable product or two and hitting cruise control. It is about high-speed, palm-sweating Navigate on Autopilot driving you toward revolutionary Full Self Driving and a disruptive tech transition that helps society avoid much more dramatic climate disruption.

Elon Musk has decided it is time to go beyond “bet the company” efforts, but don’t expect for a moment that he’s going to stop taking risks and Tesla won’t continue to grow and develop as fast as tens of thousands of employees can push it to do so. This is not about a company’s MBA-inspired business plan and is not headed toward a planned exit point for the core founder/executive. This is about revolution, revolution for the greater good. Hold on tight.

If you’d like to buy a Tesla and get some free Supercharging miles, feel free to use our referral code: https://ts.la/zachary63404. Or not. You can also get a $100 discount on Tesla solar with that code.
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About the Author

Zachary Shahan is tryin' to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director and chief editor. He's also the CEO of Important Media. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao.

Zach has long-term investments in Tesla [TSLA] — after years of covering solar and EVs, he simply has a lot of faith in this company and feels like it is a good cleantech company to invest in. But he offers no investment advice and does not recommend investing in Tesla or any other company.

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