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An Update from Elon Musk

teslamotors.com

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Re: An Update from Elon Musk

#21

Post by eldavido »

"Nonetheless, we have a duty at Tesla, having accepted this loan as a portion of our capital, to repay it at the earliest opportunity."

Not sure why Elon and a lot of SV entrepreneurs feel this way. You take a loan; if it reduces your weighted average cost of capital, you roll it and/or pay it slowly. As a Tesla shareholder, I hope such cheap financing remains in place as long as possible to maximize shareholder return on equity by keeping cost of capital as low as possible -- and by improving Tesla's cash position (helping it to operationally succeed) to boot.

Another guy thinking about buying Tesla stock.

Re: An Update from Elon Musk

#22

Post by hristov »

droithomme wrote: post #10

Musk's public statements are the nicest and most logical ones I've seen made by a modern CEO. No sense of spin. Always a pleasure to read.

Ok, even though i am generally pro tesla and like musk, in order to prevent this from becoming a total worshipfest i will provide some facts that elon is not sharing.

It is true that tesla has made all their payments under the doe loan agreement. But they were not in total compliance with said agreement. The agreement required that tesla keep certain financial ratios up to certain levels, and tesla failed to do that. As a result, tesla asked trhe government to change the terms. The government complied but wanted something in exchange. What they wanted was early repayment of their loans. That is why he is talking about early repayment. And that is probably one of the reasons why they raised extra money (although elon is unlikely to admit that).

So that is the full story. It is no big deal, i think tesla are very unlikely to default on the loan, but elon was definately not giving you all relevant info.

Re: An Update from Elon Musk

#23

Post by klinquist »

chintan wrote: post #9

What a timing - "Romney Calls Tesla a ‘Loser’" in first debate: http://www.wired.com/threatlevel/2012/10/romney-tesla-loser/

Paraphrasing Chris Sacca, Elon Musk is one of the most under appreciated entrepreneurs of our time. Talk about someone willing to tackle the impossibly big problems...

Re: An Update from Elon Musk

#24

Post by sliverstorm »

loceng wrote: post #3

I think people underestimate what an agile and lean startup like Elon seems to be running can accomplish. He's a super intelligent guy with a growing positive trackrecord. The vehicle industry has been waiting for disruption for 20+ years, and the giants finally have lost control and whatever unnatural advantages they tried to maintain. Technology for electric vehicles will only continue to improve, and costs will go…

whatever unnatural advantages they tried to maintain

You think it's unnatural that heavy industries has fewer players than, say, fast food?

Re: An Update from Elon Musk

#25

Post by karamazov »

eldavido wrote: post #21

"Nonetheless, we have a duty at Tesla, having accepted this loan as a portion of our capital, to repay it at the earliest opportunity." Not sure why Elon and a lot of SV entrepreneurs feel this way. You take a loan; if it reduces your weighted average cost of capital, you roll it and/or pay it slowly. As a Tesla shareholder, I hope such cheap financing remains in place as long as possible to maximize shareholder retu…

The spirit of the loan was to help a promising company make progress on its technology. By repaying the loan early, the DOE will be able to make more loans out of that fund to other such companies. This might not minimize Tesla's cost of capital, but I'd say it's the right thing to do if it doesn't add undue risk to the company.

Re: An Update from Elon Musk

#26

Post by droithomme »

hristov wrote: post #22
droithomme wrote: post #10

Musk's public statements are the nicest and most logical ones I've seen made by a modern CEO. No sense of spin. Always a pleasure to read.

Ok, even though i am generally pro tesla and like musk, in order to prevent this from becoming a total worshipfest i will provide some facts that elon is not sharing. It is true that tesla has made all their payments under the doe loan agreement. But they were not in total compliance with said agreement. The agreement required that tesla keep certain financial ratios up to certain levels, and tesla failed to do that.…

Oh definitely so. But his statements have no sense of any of that, one would never suspect anything is being withheld, they come across perfectly sincere and warm and from him and not from some lawyer, it's masterful.

Yeah, there's some dodgy stuff, a lot of information about these cars, such as the reality about their batteries and how much energy they really use to go from A to B over time has high spin when I start looking into details. Was genuinely surprised.

Thanks for the details about what the financing is really about, that's very interesting info.

Re: An Update from Elon Musk

#27

Post by reneherse »

I'm a huge Elon Musk/Tesla/SpaceX fan, and have often felt it would be the ultimate opportunity to work at either company (Tesla would be my first choice, as automotive interface tech is one of my passions).

However, doing a quick bit of research earlier today, a search for "Tesla working environment" turned up more than a handful of reports by former and current employees that hint at an unpleasant company culture. Six to seven day workweeks, below average compensation, hyper-political management, management that is quick to fire, and a generally chaotic environment. These factors seemed to be reported even by folks who cited other benefits such as a high degree of autonomy and the opportunity to work with other highly passionate top level engineers on important emerging technologies. One additional oft-repeated concern was that the pace at which Tesla works its engineers is unsustainable, and will lead to burnout for lack of work-life balance.

Can anyone closer to the Valley than I am comment on whether these concerns ring true? And how does this compare to work at other highly innovative and passionate industrial startups?

Elon's explanation of the latest round of fundraising is welcome news, and personally I'm gunning for Tesla to become the Apple of the auto industry. (I plan on buying stock as soon as I'm able.) Is there anything we can infer from these employee reports about the health of Tesla's organizational core/DNA, and what effect that might have on the company's prospects for long term success? [Edited for clarity]

Re: An Update from Elon Musk

#28

Post by rdl »

mullingitover wrote: post #13
rdl wrote: post #8

Earlier quoted context omitted.

I think the DOE loan has probably hurt Tesla's stock price more than it's helped -- the rumors about late repayment, etc. have probably depressed it from 33-35 down to 29. If Tesla hadn't taken $1 from DOE, it would be able to attack Fisker and Chevrolet and others for being Government Motors, and wouldn't have gotten name-checked in Romney's debate answer tonight. The only money MuskCo's should be taking from the go…

> The government is a horrible VC or lender, and the MuskCo's could do a lot better. 96% success rate is 'horrible'? http://www.greentechmedia.com/articles/read/what-abound-sola...

96% on this program so far is possible, but there are numerous other examples of the USG investing in businesses which fail, and even worse records for state/local governments (stadiums and convention centers being the classic example)

Re: An Update from Elon Musk

#29

Post by richardw »

reneherse wrote: post #27

I'm a huge Elon Musk/Tesla/SpaceX fan, and have often felt it would be the ultimate opportunity to work at either company (Tesla would be my first choice, as automotive interface tech is one of my passions). However, doing a quick bit of research earlier today, a search for "Tesla working environment" turned up more than a handful of reports by former and current employees that hint at an unpleasant company culture.…

I'm guessing, but the culture clash might come from an intersection of "car factory" meets "startup mindset", with the latter introducing an against-all-odds urgency. If you want to put a rocket in space or create the first viable electric car company, you probably can't initially go home at 5pm. You're probably less forgiving of those that can't keep up with the insane pace.

Here's hoping it calms down, and that the people who helped make the vision a reality are well rewarded.

Re: An Update from Elon Musk

#30

Post by cantbecool »

reneherse wrote: post #27

I'm a huge Elon Musk/Tesla/SpaceX fan, and have often felt it would be the ultimate opportunity to work at either company (Tesla would be my first choice, as automotive interface tech is one of my passions). However, doing a quick bit of research earlier today, a search for "Tesla working environment" turned up more than a handful of reports by former and current employees that hint at an unpleasant company culture.…

Don't let a few postings online deter you from applying to work for a company that you find intriguing. Just ignore the naysayers and give it a shot. That's the only way of finding out if you would enjoying being a part of something. It's a startup pushing the boundaries of technology within two industries, there's going to be a few sleepless nights, but in the long run you will definitely be part of something massive, which could evidently change humanity as we know it.
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