'No pain no gain', they say, but it seems like for Elon Musk, recently there is no 'gain', only pain. Musk, the CEO of Tesla and SpaceX, and the Chairman of SolarCity is experiencing tough times, as all of a sudden, his projects have started falling apart.
Often described as one of the most transparent entrepreneurs, Musk is usually very active both on social media and his Tesla blog. He never hesitates to share his vision nor to ask for advice from his followers. Musk's Twitter and blog routine, however, had been severely disrupted, as the entrepreneur has some serious issues to fix. The world is still waiting for news on the new Autopilot 8.0 that is supposed to help to rebuild Tesla's reputation. On August, 31, Musk was due to publish a post about the improved feature, but kept postponing it - and there is still no news.
Musk has never hidden from his problems, nor has he ever tried hiding them from customers and followers, but with his projects going to pot, it's time to stop talking about problems and start solving the following:
SpaceX: Falcon 9
Designed for safe transportation of satellites and the Dragon spacecraft into orbit, SpaceX's two-staged rocket Falcon 9 recently caught a fireball during a routine filling operation on the launchpad. The accident came as a shock, as Falcon 9 completed multiple tests, showing promising results over the years - yet burned up in a matter of seconds. Musk commented that it was 'the most difficult and complex failure we have ever had in 14 years,' and at the moment, NASA, the US Federal Aviation Administration, and the US Air Force are assisting with an investigation. It means, however, further testing in space and development of the project is likely to be postponed until the issue is resolved. SpaceX is also to pay the bill for the destroyed spacecraft from the Spacecom - $49 million.
SolarCity + Tesla = ?
While everyone was expecting a post on the new Autopilot 8.0 on Tesla blog, the Tesla Team instead published 'Tesla and SolarCity to combine', announcing the company’s acquisition of SolarCity. The team explained that 'by joining forces, we can operate more efficiently and fully integrate our products, while providing customers with an aesthetically beautiful and simple one-stop solar + storage experience: one installation, one service contract, one phone app.' All sounds great, but after the deal, shares of both companies nosedived in the stock market.
The acquisition was planned to be an all-stock transaction with an equity value of $2.6 billion based on the 5-day volume average price of Tesla shares, where SolarCity shareholders would receive 0.110 of Tesla common shares as of July 29, 2016 - Tesla's official blog explained. SolarCity required big investments in order to survive, as it has come to light that the company is struggling. Tesla and other investors could be the helping hand it needs, but some of the shareholders were not happy at all - raising concerns over the future of share prices and effectiveness of one such decision. Tesla and SolarCity stocks fell by 5.3% and 9.1% respectively - because regardless of a good cause, many shareholders want nothing to do with this situation.
Another Vehicle Accident
After a deadly accident back in May damaged Tesla’s reputation, there has recently been another one, this time in the Netherlands. The current investigation includes Dutch authorities and Tesla technical personnel, with the latter saying that the accident has nothing to do with the driverless feature, and the collision was due to the motorist going more than 96 mph. Tesla's representatives said the Autopilot was not engaged at any point of the driving. The Dutch newspaper De Telegraaf reported that the car's battery had partly caught on fire and broken.
Considering that issues with Musk's projects started to happen roughly at the same time, it could be years until Tesla, SpaceX, and SolarCity thrive again. Elon Musk has inspired many thanks to his boldness in decision-making, transparency, and hunger for innovation. Time is not on Musk's side, as current problems require actions based on a well-thought out strategy. Disruptive innovation has to happen at a fast pace, but it has no value if it burns out before it fully reaches the market.
In one of his latest tweets today, Musk said he will get back to the Autopilot update blog tomorrow, so there are hopes that the work on problems has begun...