I think it's true that Elon Musk likes to make outlandish promises simply for sport. Maybe it's so that his fans will have something to get excited about, or so investors will have a reason to continue pushing up the price of Tesla's stock. Or perhaps, it's so that people like me will have something to write about (though I highly doubt it).
His latest promise, made Tuesday during Tesla's "Battery Day," is that the company will offer a model for $25,000 that would ship in the next three years. Both the price point and the timeline are kind of extraordinary if you think about it.
The $25,000 price point is important for a few reasons. Currently, the lowest-priced Tesla you can buy today, the Model 3, will set you back at least $38,000. Tesla has managed to sell quite a few Model 3s, but a vehicle that starts at $25,000 is sort of the holy grail of electric vehicles. It's highly desirable and yet, at least so far, completely unattainable.
It would be a complete game-changer in a way that even Tesla's relatively successful previous models can't match. It would mean that electric vehicles would become affordable for more than the most loyal EV acolytes. It would be a viable alternative to the options that most people consider when they look for their next car.
Except, it's hard not to ask whether it's something Tesla will actually do. I mean, it wouldn't be the first time Musk's claims didn't exactly correlate with reality. That $38,000 Model 3 was supposed to be $35,000, at least according to Musk.
The company would argue the actual cost is lower if you factor in tax credits and the savings from not using gasoline. That's all nice, but the check you write to have one delivered is still going to say $38,000. And that's a lot of money no matter how you decide to do the math. It's more than a Cadillac CT4 or BMW 3-Series.
There are even more recent promises, like when he said he'd send 1,000 ventilators to hospitals in California to assist with the surge in Covid-19 patients. Most of what actually arrived were BiPAP machines which, despite Musk's claims, aren't the same thing.
Or there's the tweet Musk sent that promised your car would be able to talk. The company is still quiet on the details of that particular feature.
There's also the time in 2017 when he promised the company would ship half a million Model 3s in 2018. The actual number was a little less than a third of that (154,000).
There are plenty of other examples, like when he promised that the vehicles would be fully autonomous within three-to-six months. That was also in 2017.
It's like President Kennedy making the bold declaration that "before this decade is out," the United States would accomplish its goal of "landing a man on the Moon and returning him safely to Earth." That was a pretty bold claim, and it certainly made people excited. The difference, however, is that in Kennedy's case, we actually went to the moon.
It might not seem like it matters, but it does. As a leader, your credibility is everything; I think we can all agree on that. When you make a promise, your most basic responsibility is, before anything else, to keep it.
You can write off Musk's promises as nothing more than a showman's boasting. While it's entertaining, showmanship isn't the same as leadership. You can also argue that so far, it has worked for Musk, and for Tesla. For the most part, that's true if you measure success in terms of stock prices. It's certainly true that Musk has gotten very rich, partially based on what Tesla has already delivered, and partly based on those promises.
I just think it's worth mentioning that credibility is even more valuable. At least, it should be.