Elon Musk’s messiah complex is a Tesla risk

“It would be fair to say then, therefore, as a leader of the company, I have done more for the environment than any other human on the planet.” So said Tesla CEO Elon Musk as part of a 90-minute on-stage discussion with Andrew Ross Sorkin of the New York Times this week.

It is not difficult see why Musk’s sense of importance has become so inflated. One only has to listen to the sycophancy of Sorkin’s introduction of him to understand why he would not just think of himself as the most important individual in climate protection, but to also voice it.

“He is the richest person in the world. He may very well be the most consequential individual in the world right now. He runs the most innovative companies in the world,” Sorkin, supposedly a serious business journalist, gushed.

Tesla investors may be relatively unworried about this monomania, given that the firm’s share price remains over 700pc higher than it was at the start of the decade, albeit it was 1300pc higher at one point in late 2021 (see Fig.1). But perhaps they should be.

“I actually know the people on the line, because I worked on the line” Musk told Sorkin. “And I walked the line and I slept in the factory and I worked beside them. So I am no stranger to them.”

Some of this is self-serving narrative around why Tesla is resistant to becoming unionised like legacy US OEMs such as Ford, GM and Chrysler. But one also gets a strong impression that Musk believes his ‘man of the people shtick. And that divorce from reality cannot be good for a business leader.

Nor can Musk stick to his own narrative. At one point, he says that he is “incredibly appreciative of those that build cars” — albeit he cannot help but add that “they know it”, as if reinforcing his need for gratitude.

But he then goes on to describe how Tesla has made “many people who are just working the line, who did not even know what stocks were” millionaires through the firm’s stock options policy. It is difficult not to read into that a certain, if not contempt, sense of otherness in how he perceives his workforce.

He is certainly not keen on them having the leverage that belonging to a union might offer. “If Tesla gets unionised, it will because we deserve it and we failed in some way,” Musk says.

“There are a lot of people out there who think that the top ten car companies out there are going to be Tesla followed by nine Chinese car companies. I think they may not be wrong,” he continues. Confidence or complacency? Tesla buyers must hope it is the former.   

Easily bruised

Musk is also worryingly thin-skinned on other subjects, including a perceived snub by the Biden administration. It organised a White House summit on EVS and did not invite Tesla, which still rankles with the firm’s chief.

The administration “specifically refused to let Tesla attend”, he complains, despite its market leadership in US EV. “We literally make more electric cars than everyone else combined. Why are we not allowed to attend?” Musk says his firm asked.

“We had done nothing to provoke them,” he continues. “Then Biden went on to add insult to injury and publicly said that GM was leading the electric car revolution. This was in the same quarter that Tesla made 300,000 electric cars and GM made 26. Does that seem fair to you?” he asks.

“I can see it in your face; this hurt you personally,” Sorkin responded to this complaint. “It was an insult,” Musk agrees.

But whether it is healthy to massage these hurt feelings, rather than suggesting that — given Musk’s timeline puts this is in the first half of 2019 — it is better to forget about it and move on remains to be seen.

Musk=Tesla

Certainly, Musk’s personality is at least as entwined with Tesla as a brand, even with his myriad other ventures, as it ever was. In fact — after his Twitter, now X, takeover — what Tesla buyers think about Musk’s personal pronouncements may be more important than ever.

A recent post by a leading EV influencer on business network LinkedIn that began “Musk: Brilliant and utterly appalling” has thus far attracted over 100 reactions and almost 150 comments. And the majority are on the lines of either ‘I would buy a Tesla but Musk’ or ‘I love my Tesla, despite Musk”.

Even more potentially worrying for Tesla bulls — while there are admittedly some buyers of the firm’s vehicles who remain Musk fans — many of the other LinkedIn comments in support of him seem to come from right-leaning people who give off strong impressions of EV and wider climate change scepticism.

Disaster

And it is not just EV buyers that are relatively unimpressed with Musk's recent performance. "If you looked up disaster in the dictionary, there would be a video of last night's conference call," Dan Ives, who covers Tesla for investment bank Wedbush, told US broadcaster CNBC after the firm's Q3 results.

Musk "putting on his macroeconomist hat was not what the street wanted", says Ives, decrying a lack of detail and a loss of credibility with the August exit of CFO Zach Kirkhorn.   

"Because of that conference call, you are going to see uncertainty," Ives warns. "I would put last night as a top-three worst conference call that I have heard from Elon in the last few years."