Former Tesla Executive Explains How Elon Musk Juggles Four Companies And His Time

Twitter CEO Elon Musk speaks at the Twitter 2.0: From Conversations to Partnerships, marketing conference in Miami Beach, Florida, on April 18, 2023. Musk currently runs and owns four companies at once all. CHANDAN KHANNA/BENZINGA

By Shanthi Rexaline

Tesla, Inc. stock has pulled back over 26% from its mid-February highs after cutting down prices on its models to boost sales.

The weakness has reignited conversations about CEO Elon Musk’s divided attention to his flagship electric vehicle venture.

Twitter CEO Elon Musk holds one of his children after a keynote speech at the “Twitter 2.0: From Conversations to Partnerships,” marketing conference in Miami Beach, Florida, on April 18, 2023. One Musk’s former employees has stated there’s no distraction for him. CHANDAN KHANNA/BENZINGA

Musk is currently serving as the CEO in four companies that he owns that includes Tesla, Twitter, SpaceX, and The Boring Company. Tesla and The Boring Company are currently headquartered in Texas while SpaceX and Twitter headquarters remain in California. 

A former Tesla executive weighed in on the fears in a recent interview.

Musk isn’t all that distracted away from the Tesla business, according to Jon McNeill, who previously served as president of Tesla.

To prove his point, he noted that on Tesla’s earnings call, he was answering questions at a really deep level.

“He’s involved, and he is always had a lot going on but is incredible at managing his schedule and staying involved on the key absolutely key topics,” McNeill told CNBC.

The former executive noted that the company is still delivering more cars than in the past.

Tesla’s Model 3 and Y are the company’s best-selling and most affordable vehicles.

“I think anybody in the car business would love a 36% comp on a quarter,” he said, adding that Musk has a lot of margins to play with.

McNeill also suggested that the general economic environment may have had a role in the softness.

Since Tesla has an industry-leading margin, it can use that as a weapon, he said. Although the company cut prices six times this year, it still delivered more margin than anybody else in the industry, he noted.

“I wouldn’t recommend running two companies -; it really deceases your freedom quite a lot,” Musk said back in 2015. 

Musk has stated that he works 7 days a week that involves all four companies that he currently owns.

Offering his thoughts on the delay in several components of the product such as the full-self-driving software, McNeill said Musk is good at delivering eventually on promises but not on time.

Musk also believes that the lower margin can be made up with software and other revenue that would come off the car in the future.

In the long term, the EV market is huge and as the market leader, Tesla has market-leading margins, McNeill said.

“So as an investor, you’re investing into a space that could be 10 times larger literally in five years than it is today,” he said. As Tesla is valued at ten times its competition, investors have to believe there is something else coming, he added.

Tesla has a lot of capability to deliver margins off the platform, but General Motors Corp. has a very similar strategy and a similar capability, McNeill said.

On shareholder concern over shifting engineers among Musk’s various ventures such as Twitter and SpaceX, McNeill said there are SpaceX metallurgy and materials engineers that have transformed the way the Model Y is produced.

“You get these big breakthroughs by moving that talent and context-switching them,” he said, adding that it “doesn’t really get told is how much value they add back to Tesla as they come in and help.”

Produced in association with Benzinga

Recommended from our partners

The post Former Tesla Executive Explains How Elon Musk Juggles Four Companies And His Time appeared first on Zenger News.

Warning: count(): Parameter must be an array or an object that implements Countable in /data/11/0/112/52/764704/user/782211/htdocs/site/wp-content/themes/dialy-theme/includes/single/post-info.php on line 4