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Comment by xyst | Hacker News Reader

Tesla is circling the drain.

Nah, low debt, lots of cash equivalents on hand, utility scale storage business is a rocket ship. They’re doing bad enough the board should fire Musk, but not bad enough the org will die.

Tesla should survive for many reasons (product need, ~120k global workers), but needs an adult in charge. No one is irreplaceable, even Musk. Preserve the enterprise, its value, and the jobs.

One law we should pass is forbidding C-suites from holding more than one full-time job, unless said job is at some non-profit or just sitting (or chairing) a board.

It really seems like as soon as interest rates rose all of a sudden every "Super CEO"'s business portfolio was in troubled waters.

Why do we need a law? You can choose to invest or not.

I mean, tons of shareholders are literally fighting to give Elon another $50 billion in stock, diluting themselves.

Well, it seems like if I was bullish on tesla and believed their growth story I’d be extremely interested in making sure that elon gets what he wants, because it seems he is basically threatening to gut parts of the company if he doesn’t. Cannot imagine how this is legal or tolerable, but lots of stuff he does I think this is the case and nothing seems to really matter and number go up.

It does seem like the fact a CEO can work multiple jobs at the same time undercuts the common argument that we must all return to the office.

Do we need a specific law for this? If it's bad for the companies involved, shouldn't that be something their board take care of? If the directors are failing in their supervisory duty, isn't that something a shareholder lawsuit can address?

If they aren’t giving a company their full attention, then surely that’s seen the companies performance and share price?

Why do we need laws for problems the market will solve?

Where's your evidence that the market has been even attempting to solve the problem of people (such as Musk) holding multiple C-suite positions simultaneously? I've seen no such evidence. If anything it seems to be supporting it, given that Tesla shareholders seem primed to vote on giving Musk 50 billion USD.

If they do a bad job, the stock price drops and they get replaced.

You also are not laying out exhaustive and conclusive evidence that laws are needed for this.

I think your Elon example isn’t good and has more to do with politics than business/economics.

You're the one who claimed the market will solve this problem, the onus is on you to provide evidence for your position. Additionally there are plenty of cases out there of objectively terrible CEOs (Elizabeth Holmes comes to mind) that don't get booted out - it usually takes regulators or even the justice department to deal with it in those cases. Which is exactly what's being proposed.

Did regulators have to wait for a researcher and journalists to get the ball rolling on Theranos?

Sorry if your comment wasn’t the parent that I replied to saying we need more laws without any evidence to support that conclusion.

And now you bring up Holmes.

How much "cash" is in China and can't be easily repatriated? They do a lot of business there.

But I agree, Tesla isn't going anywhere.

So when Tesla sold cars in China, then Beijing prevented Tesla from getting the proceeds of those sales out of the country, Tesla said, "oh, well," and kept selling cars in China; is that your speculation on what happened?

They've done the classic thing of saving pennies now and spending dollars later though. Laying off the Supercharger team is a particularly baffling mistake: Superchargers are the selling point for getting a Tesla as opposed to some other BEV, and especially now that they've opened up the network to other companies. In some areas Tesla owners are already complaining that they can't get a charger because of the non-Tesla vehicles occupying them. That need not necessarily have been a mistake if they went pedal-to-the-floor on building out the network further, but it doesn't look like that's going to happen. It's a bad error that's going to bite them hard, soon.

If this were any other company, HN would instantly and unanimously recognize that this is as the classic MBA/PE blunder of cutting costs but and gutting any chance at future success; the only reason people aren't recognize it as such is because of lingering goodwill towards Elon.

Agree, the minute I start sensing issues with the Supercharger Network's reliability, I'm out. It's the sole reason I bought a Tesla over any other electric car, and was about to save every other electric car that adopted NACS.

With the NACS roll out though its clear the SuperCharger network can no longer be thought of as a Tesla only thing though, and something would probably have had to change regardless. Tesla obviously aren't going to be interested in running the service on behalf of the entire car industry - the profits are meagre and its ultimately just a utility like a gas pump. I think this is an inevitable consequence of progress; Tesla had to build the SuperCharger network back in early 2010s - today it can direct the rest of the industry to continue the task.

My guess is we shall shortly see establishment of a new body to manage, pay and extend the SuperCharger network, but as a neutral body acting on behalf of all car makers. Similarly, its no longer just Tesla who have a monopoly on SuperCharger sites - other companies can now build NACS fast chargers such as Electrify America etc:

> https://media.electrifyamerica.com/en-us/releases/223

Will this be as good as the original network's reliable hardware? Probably not in some places! But just as we don't expect Ford to own every single gas pump, every NACS site being owned and operated by Tesla was probably a non-starter too, especially now its going to be virtually universal across the US EV landscape.

That's what I don't get.

> low debt, lots of cash equivalents on hand

Then why fire 20% to 40% (as some rumors are pointing out today) of your staff? Why get rid of the supercharger team? Why get rid of the new vehicles team?

If they really were "low debt" and "lots of cash" on hand kind of company, then there's no reason for huge cuts.

Because he can and there is no adult in the room to evaluate the consequences of drastic decisions before making them.

Tesla lost $2.5 Billion in cash flow in Q1 2024, likely due to increasing inventory (aka: they can't sell their cars fast enough despite all the price cuts).

The knee-jerk reaction to just start laying off huge swaths of the company to compensate is... understandable. Clearly a dumb move but understandable. I think you're underselling the clear problems of Tesla the company that go far above and beyond Elon Musk.

Was firing the whole Supercharging team the right move? Probably not. In fact, I'm certain that this move will only make fewer people buy Tesla, now that the charging situation is complete chaos. But given the numbers, Tesla doesn't have many quarters of runway left (even with Tesla's $26 Billion in cash and short-term investments, there's over $15 Billion in various liabilities. So Tesla only has ~4 more quarters at this cash-burn rate before it runs out of cash).

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Tesla sales in China, Germany, and USA are all down for April 2024 as well. Meaning there's even larger inventory glut and even more cash-flow losses.

Supercharging is already fired. There's no way that team can likely ever be recovered, and the goodwill between Supercharger and all of their installers has been destroyed. (Its risky for a company to invest $10,000+ per supercharger on their property, only for them to be Ghosted on an Elon whim). That's permanent damage to the brand, I don't think anyone would want to build superchargers after hearing the horror stories of these ghosted businesses.

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Remember: bankruptcy is a cash-flow issue. Not a profitability issue. If you run out of cash, that's it. You can't pay suppliers and thus they'll force you into bankruptcy (eventually).

If they fire musk they lose his reality distortion field and their stock falls 5x to be in line with normal price to earnings ratios.

That's a stretch.

But maybe everyone is starting to realize they aren't going to sell 20 million cars per year. Maybe?

Nope, now people believe they are going to sell billions of robots.

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