Though Elon Musk, the CEO of electric-car company Tesla (NASDAQ: TSLA), has been particularly outspoken on Twitter recently, the number of press interviews he has participated in has dropped significantly compared with past years. But Musk opened up to Bloomberg this week in a rare in-depth interview for Bloomberg Businessweek's cover story.
With the interview taking place during a time when Tesla is rapidly increasing production and deliveries but is also reporting record losses, it's worth a read for Tesla investors. Here are five of the most telling quotes, including Musk's plans to calm down on Twitter, how Model 3 production is faring, and more.
Tesla's Fremont, Calif., factory. Image source: author.
Calming down on Twitter
Musk is widely known for his frequent tweeting. But the CEO's habit reached an all-time high recently. Indeed, Musk was averaging about 88 tweets per month leading up to May 2018, according to an analysis from Quartz of the executive's tweeting habits over the past two years. But in May, Musk's tweets, when including replies, exploded to nearly 400.
Worse yet, many of Musk's recent tweets have centered on topics in which he was clearly irritated. The CEO lashed out at journalists, short sellers, and others. The outspoken Twitter usage even led a partner at one of the company's largest shareholders to say he wished Musk would quiet down a bit. "We are very supportive, but we would like peace and execution at this stage," said Baillie Gifford & Co. partner and portfolio manager James Anderson in an interview with Bloomberg. "It would be good to just concentrate on the core task."
According to Musk's interview with Bloomberg, the CEO agrees that his tweeting has got out of hand.
I have made the mistaken assumption -- and I will attempt to be better at this -- of thinking that because somebody is on Twitter and is attacking me that it is open season. That is my mistake. I will correct it.
The tweetstorms were probably tied to the CEO's stress. "It's been super hard," Musk told Bloomberg.
Sustaining a Model 3 production rate of 5,000 units per week
Tesla recently achieved a production rate for its Model 3 of 5,000 units per week. Detractors have argued the higher production rate was the function of an unsustainable burst. But Musk seems determined to keep producing vehicles at elevated rates rate even if it's a difficult road.
It's still quite painful to produce 5,000 a week. But I think in a month, it will not be. It used to be hell to make 2,000 S's and X's in a week, and now it's normal. In three months, I think 5,000 will feel normal.
Over a week into Tesla's third quarter, the CEO is bullish on how the electric-car maker is executing.
"I do feel good about the months to come," Musk said. "I think the results will speak for themselves." These are some bold words at a time when the CEO has told investors the company can go from record losses to profitability and positive cash flow in both Q3 and Q4 of this year.
Tesla's risk profile may improve after Model 3
Manufacturing is hard. And building vehicles is widely considered to be one of the most difficult forms of manufacturing. Indeed, the capital-intensive nature of the auto industry has long been considered incumbents' greatest competitive advantage, as it is nearly impossible for new entrants to succeed over the long haul.
During the interview, Musk said several "bet-the-company situations" were required for Tesla to successfully become a mass-market auto manufacturer. These times, which Musk said were the launch of its Roadster (Tesla's first vehicle), its Model S, and its Model 3, required raising lots of capital and featured dangerous levels of spending.
Fortunately for investors, the Model 3 is Tesla's "last bet-the-company situation," Musk said.
It's not like [I have] a desire to bet the company. There is not a choice. If somebody knows how to do it without betting the company, I would love to talk to that person. But I do not foresee future bet-the-company situations.
Halfway out of hell
Since Tesla first started delivering Model 3 vehicles last summer, the CEO has likened the vehicle's production ramp to hell.
"Welcome to hell!" Musk said at the Model 3 event for the first deliveries last year.
Having to delay important Model 3 production targets several times, Model 3 production did prove to be tough for Tesla over the past year. But Musk now sees the light at the end of the tunnel.
"I feel like we have got like one foot in hell," he said in the Bloomberg interview.
Overall, the interview spotlighted a CEO and company in the middle of a major transition. Though Musk admitted times have been trying, he also seemed hopeful about both near- and long-term initiatives.
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