Tesla CEO Elon Musk is assuring the company's shareholders that the electric car maker is on pace to set manufacturing and sales records during its current quarter after a disappointing start this year. The forecast made on Tuesday at Tesla's annual meeting provided a ray of hope amid worries about the company's long-term prospects. Those escalating concerns caused Tesla's stock price to fall to a three-year low of $176.99 last week before bouncing back. The shares climbed more than 3% to $224.40 in Tuesday's extended trading after Musk's prediction.
Tesla's current quarterly records came during the final three months of last year when it manufactured more than 85,500 vehicles and delivered 90,700. Then Tesla's production and sales slipped during the first three months of this year.
Last year, in May, Musk attended an interview wherein he said the “biggest mistake” of his career was not devoting enough time to the company during its early days, when he was more focused on running his space exploration company, SpaceX.
“I think that was probably the biggest mistake of my career,” he said. “Whenever you think you can have your cake and eat it too, you're probably wrong.”
Since Musk was Tesla’s lead investor, he didn't initially take an executive position in the company, instead, he served as its chairman from 2004 to 2008 so he could devote more time to running SpaceX and raising his children. SpaceX, an American aerospace manufacturer and space transportation services company. It was founded in 2002 by Musk with the goal of reducing space transportation costs and enabling the colonization of Mars. SpaceX got famous because it is one of the first privately owned aerospace manufacturing and space transformation company; it also is important to remember that they have recyclable rockets, i.e rockets that got to space and return to Earth for other researches and studies.
As Tesla faced production delays and cost overruns with its first vehicle, the Roadster, tensions flared between Musk and CEO Martin Eberhard, who was eventually forced out of the company and replaced with Ze’ev Drori, who became the company’s second full-time CEO in November 2007.
And as the company neared financial ruin and bankruptcy during the 2008 financial crisis, Musk decided he needed to step in and take charge of the company and its processes.
Musk became Tesla's CEO in October 2008, initiated lay-offs and secured a US$40 million round of financing that would allow the company to avoid bankruptcy. Since then, Tesla has released three more vehicles (the Model S luxury sedan, Model X luxury SUV, and the Model 3 mass-market sedan), expanded into solar energy, and amassed a market capitalization greater than Ford’s and comparable to General Motors’.
And, while Musk might insist otherwise, Tesla's popularity with its customers and investors has allowed it to get two good things at the same time – encountering production delays with each of its vehicles while continuing to have access to cheap capital. But the fact that Tesla has come this far speaks to the wisdom of Musk’s decision to become CEO, and his ability to turn his greatest professional mistake into one of the past decade's most improbable success stories.
(With agency inputs)