Tesla, the electric vehicle (EV) giant, recently weathered a tumultuous week as its shares plummeted by over 15 percent. The decline followed a third-quarter earnings call where CEO Elon Musk delved into a range of issues, from rising interest rates to the company’s much-anticipated Cybertruck. The call grew so dire that Tesla investor and financial analyst Kevin Paffrath didn’t mince words in his interview with Yahoo Finance, labeling it “terrible” and lambasting Musk for what he perceived as the CEO “turning into a little baby” as he was seen in tears.
Paffrath’s comments shed light on the increasing frustrations among Tesla investors, who’ve been expressing concerns about the company’s leadership under a seemingly distracted CEO.
Under the Microscope
Critics have identified several factors contributing to Tesla’s recent stock troubles. Notably, the company’s performance in the third quarter fell short of expectations. Elon Musk himself acknowledged that Tesla had essentially hindered its own success by encountering significant difficulties with the long-awaited Cybertruck. What was once promised as a $40,000 vehicle four years ago now appears likely to come with a significantly higher price tag. Moreover, concerns about quality control, particularly in terms of the fit and finish of Tesla’s vehicles, have compounded these issues.
Elon Musk is a prominent figure known for managing a diverse array of responsibilities, ranging from leading Tesla and SpaceX to venturing into social media with X-Tesla, formerly Twitter. However, there is a growing consensus, as exemplified by Kevin Paffrath, that Musk’s busy schedule should not be used as a justification for adopting a confrontational approach. Such behavior, reminiscent of former President Trump’s Twitter tactics in disputes with regulatory bodies like the SEC or the European Union, is seen as inappropriate, especially during important earnings calls.
Nevertheless, amid the challenges and controversies, Paffrath maintains a degree of optimism. He acknowledges the high quality of Tesla’s products and the unwavering dedication of its workforce. According to Paffrath, what is essential is not having a CEO who complains but one who charts a clear and promising path for the company’s future.
Challenges and Competition for Tesla
The decline in Tesla’s shares may be attributed to various factors. An overarching concern is the mounting competition in the electric vehicle market. While Tesla once reigned supreme, the rise of competitors like Rivian, Lucid Group, and Volkswagen in recent years has eroded Tesla’s market dominance. This surge in competition is exerting pressure on Tesla’s profit margins and overall profitability.
Moreover, investors are growing increasingly wary of Musk’s unpredictable behavior. Musk has a history of impulsive decision-making and public disputes with other executives and notable figures. These actions have led some investors to question Musk’s ability to lead Tesla effectively.
Finally, the general volatility of the stock market cannot be discounted. Recent months have witnessed considerable turbulence in the stock market, causing the value of many stocks, including Tesla, to decline.
Other instances of Elon Musk’s Vulnerability
Elon Musk’s moments of vulnerability have not gone unnoticed in the public eye. While he is known for his charismatic and sometimes brash persona, he has also displayed a more emotional side in various instances.
In past interviews, Musk has broken down when discussing personal and professional challenges, demonstrating that even tech visionaries like him can face emotional struggles. For example, in a 2018 interview with 60 Minutes, Musk became emotional when discussing his father’s abusive behavior. In 2020, during a Tesla earnings call, he expressed frustration over the company’s production delays. These moments have offered a glimpse into the immense pressure that comes with leading a groundbreaking tech company like Tesla.
