Most Tesla-watchers insist that Elon Musk has bet everything on Model 3, and that delays in meeting production goals for the mass-market electric vehicle will lead to Tesla's collapse (the short sellers are still waiting). Entrepreneurs often face this kind of situation--all anyone wants to talk about is the part of a business that's facing difficulties, though other areas may be doing well. Several companies with diverse lines of business (see Apple or Amazon) have dealt with this problem.
Yes, we all know that Tesla loses millions every quarter. But what happens to this "lost" money? Despite what the prophets of doom imply, Elon and his pals are not fiddling it away--they are investing today's earnings to build tomorrow's business, as many a successful tech company has done. Tesla's fixation on the future is the reason it remains in the red--it earns healthy margins on Models S and X, but instead of banking the cash as profit, it plows it (and more) into developing new products and new markets.
Musk discussed several of these initiatives at Tesla's recent shareholders' meeting, and has announced several new achievements since then. Of course, most of the items on this list represent highly ambitious goals, and it's far from certain that they will pan out, but when you consider what Tesla has achieved to date, and the potential rewards if even some of these initiatives reach their potential, the predictions of Tesla's demise start to sound unlikely.
Here are 10 of Musk's most important innovations, with related lessons that leaders might learn:
Tesla's proprietary charging network is an undervalued jewel in the corporate crown that gives it an insurmountable lead (don't call it a moat!) over its competition. Tesla foresaw the importance of charging infrastructure early on, and has been aggressively buying up the prime real estate. When the legacy automakers finally get in the game, they'll be playing by Tesla's rules.
Lesson: If there's something you're convinced is important, and your competitors are ignoring it, grab it.
2. Tesla Body Shops.
The company plans to add body shops to its expanding network of service centers. The idea is to reduce the cost of body work, which has been a sore point with Tesla owners (the aluminum body panels of Models S and X can be expensive to repair after a collision).
Lesson: If there's something about your product that makes it more expensive or less convenient for customers, find a way to fix it.
3. Gigafactory One.
Tesla's Nevada battery factory is only a third of the way to completion, but it already takes two hours to walk from one end to the other--when it's done, it will be the biggest building on Earth. This is no vanity project--when Elon Musk first conceived Model 3, he foresaw that a massive factory would be needed to supply the batteries.
Lesson: Anticipate the ecosystem that will be needed to support your products, and build scale from the beginning (this also applies to No. 1).
4. The Chinese Gigafactory.
Tesla revealed that the much-anticipated next Gigafactory will be located in Shanghai. Producing locally will allow Tesla to sell its vehicles much more cheaply.
Lesson: China is too big an opportunity to piddle around with--order the full-course meal.
5. The Boring Company.
When Musk's frustration with LA traffic inspired him to start a tunneling company, many dismissed it as a frivolous distraction from the all-important Model 3 ramp-up. Then came the news that the city of Chicago has chosen the Boring Company to build a link between downtown and O'Hare airport--Musk and company hope to get travel time down to 12 minutes.
Lesson: Don't be afraid to use your personal experience (good or bad) as an idea for a business--some of the most important advances in history have come about this way.
6. The Roadster.
The next-gen Roadster will have a SpaceX option package, featuring compressed-air rocket boosters from SpaceX.
Lesson: Many think the rockets are ridiculous, and they may be right, but they'll get more press coverage than all of Tesla's practical batteries and solar panels. This is one of the core lessons of Tesla: fun is what sells cars (and other things too).
7. Tesla Energy.
Over the last year, Tesla deployed more energy storage worldwide than it had in all of the preceding years put together. This rate of growth is beyond exponential, and it's expected to continue for years.
Lesson: Stephen Covey fans know what a good habit it is to synergize. The battery tech that Tesla has developed for its cars has found an even more lucrative application in the mushrooming field of utility-scale storage. Shades of Amazon, which turned the cloud technology it developed for its own use into a lucrative side business.
8. The Solar Roof.
Tesla's solar panels, which look and act like ordinary roof tiles, have been quietly rolled out and are now in a validation testing phase.
Lesson: Again, synergy. Electric vehicles and solar panels are like peanuts and beer--if you consume one, you soon want the other.
Musk tweeted that the next update, due in August, will begin to introduce "full self-driving features." Self-driving could revolutionize transportation even more than electrification, so the promise that it's finally on the way caused investors to cheer. It remains to be seen what features the new Autopilot will offer, but if Tesla can deliver even a limited form of self-driving, it will show itself to be miles ahead of the legacy automakers.
Lesson: Sometimes a nimble startup really can run circles around powerful incumbents.
At the shareholders' meeting, Tesla CTO JB Straubel restated his confidence that Tesla has the best and cheapest battery cells in existence. If there's anything better out there, he's not aware of it, and he's looking hard, all the time.
Lesson: Staying ahead in technology is critical, but don't innovate for the sake of innovating--if you know your tech is the best, stick with it.