Elon Musk is reportedly experiencing a loss of focus during a pivotal moment for Tesla in the electric vehicle industry.
Steve Westly, a former Tesla board member, shed light on Elon Musk's current state of mind and proposed on Thursday that Tesla could benefit from Musk's divided attention. Shared with CNBC on Thursday at the annual VivaTech conference in Paris, Westly emphasized that CEOs of leading global companies must maintain a laser-like focus on their endeavors, but Elon Musk's attention seems dispersed across too many areas.
NVIDIA CEO's Laser-Focus on Running Businesses
Disappointed by Tesla's performance, Westly shifted his focus from investing in the company to launching his venture, The Westly Group.
Westly suggested that Musk's diminishing focus contributed to Tesla falling behind its "Magnificent Seven" counterparts. As the managing director of venture capital firm The Westly Group and an early Tesla investor, Westly emphasized the importance of focus in leadership, highlighting NVIDIA CEO Jensen Huang as a prime example of effective focus, which Tesla could benefit from.
Westly Prediction About Tesla's EV
Westly also predicted that Tesla would introduce a new $25,000 car next year, although no evidence supports this claim. Despite Tesla's recent decision to cancel plans for a low-cost electric vehicle, Westly believes such a car would be popular.
Musk provided vague information about Tesla's upcoming models during a first-quarter earnings call. While he mentioned plans to commence production of "new vehicles, including more affordable models," using existing factory lines, details like specifications or pricing for these electric vehicles were not disclosed. Westly also emphasized Musk's strong track record, advising against betting against him.
Musk Seemingly Losing His Ground Due to Foul-Ups and Controversies
Elon Musk's recent foul-ups and mismanagement have caused setbacks for his companies, leading to significant layoffs, notably observed with X. These mistakes have become significant distractions, and Musk's reputation as a businessman has suffered, with suggestions that he has "lost ground."
Recent events, including staff layoffs, have also contributed to distractions for the serial entrepreneur. A recent revenue miss and simultaneous responsibilities at his other ventures, such as SpaceX, X, Neuralink, and The Boring Company, raised concerns about his compensation package. However, Westly stated that assessing Musk's impact on Tesla is ultimately up to the board.
Tesla disappointed investors last month with its largest quarterly revenue decline since 2012, compounding negative news following an announcement of a more than 10% reduction in quarterly revenue.
Tesla's slowdown arrives during a crucial period for the electric vehicle sector, amidst rising rivalry and an escalating trade conflict between the U.S. and China over alleged Chinese subsidies, with President Joe Biden imposing new 100% tariffs on Chinese electric vehicles, effective this year, aiming to deter China from flooding the market with inexpensive goods.
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