Denholm, along with Ron Baron, has a lot to share in this recent interview.
Elon Musk has often come in for criticism because of missed deadlines, over-ambitious forecasts and, in a few cases, unfulfilled promises. It’s true that production dates for the company’s vehicles have often slipped, many owners are unhappy about delays in delivering Full Self-Driving capability, and the New York-to-Los Angeles driverless Odyssey, originally planned for late 2017, has yet to take place. Musk himself has admitted that he’s always had problems with timelines.
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Above: Tesla Chair Robyn Denholm (Flickr: CeBIT Australia)
However, let’s look at the other side of the coin. Tesla has achieved the goals of Musk’s Master Plan, progressing from a limited-quantity boutique automobile (the Roadster) to a mass-market sedan (Model 3) on a timeline that, for the auto industry, counts as lightning speed. As other automakers (both incumbents and startups) struggle with their electrification efforts, Tesla is increasing sales, moving on to new models, opening up potentially huge new markets, earning a respectable margin and making a profit. The word among analysts these days is that the California carmaker has at least a five-year head start on its so-called rivals.
As the old saying goes, whatever Tesla’s doing, it seems to be working. But what if the company is succeeding not in spite of Musk’s overambitious goals, but because of them? That’s what Tesla Chairwoman Robyn Denholm implied in a recent interview on CNBC.
Denholm, an Australian business executive with an extensive background in the auto and tech industries, replaced Musk as Chair of Tesla’s board in November 2018 as part of a settlement with the SEC over his naughty tweets. Her appearance on CNBC’s Squawk Box represents a rare chance to hear inside insights about the company from someone whose name isn’t Musk.
“To achieve what Tesla has achieved over the last 5 years, over the last 10 years, you have to set audacious goals and big goals…and then have everybody in the company work like crazy to get there,” Denholm told CNBC. “I think part of it is setting those very big goals so that the company can rally and get behind them and move forward, and move the whole industry forward.”
Above: Denholm sits down to chat with CNBC alongside Billionaire investor Ron Baron (YouTube: CNBC Television)
As examples of Muskian audacity, Denholm cited the California carmaker’s production of 97,000 vehicles last quarter, and its completion of Gigafactory 3 in Shanghai in a mere 10 months, achievements that took many by surprise.
Believe it or not, development of the Shanghai factory is actually ahead of schedule, and it has started production of Model 3 on a trial basis. “There is a huge opportunity for growth in China,” said Denholm with massive understatement.
The advent of electric vehicles has catalyzed a historic shift that will see much of the global auto industry migrate from the US to China (and to a lesser extent, to Europe). Although Tesla is the quintessential American company, it’s no exception to this trend - the firm’s recently announced quarterly results reveal that US sales declined by some 39% over the last year, as Chinese sales grew by 64% (European sales also surged).
Baron Capital founder Ron Baron, whose firm owns around $488 million worth of TSLA shares, joined Denholm on Squawk Box, and reminded us that, while the media makes Musk the focus of its Tesla coverage, the company is no one-man show. Musk may set the “unrealistic” goals, but it takes a massive amount of work by a huge number of people to make them reality.
“They have 42,000 employees. This is not reliant upon one man,” said Baron. “But he has empowered people to be able to make decisions and to be able to do what’s best for the company.”
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Written by: Charles Morris; Source: CNBC
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