CNBC Looks at Elon Musk’s Program Portfolio & Problems at Tesla

Video Caption: Elon Musk has a lot on his to-do list. And it may be coming at the expense of his core business – Tesla.

Video Caption: Short-seller Jim Chanos, Kynikos Associates founder, shares his thoughts on Tesla, Elon Musk and the mass exodus of the company’s top executives.

  • Kenneth_Brown

    Palo Alto is 15 miles away (25 if you take the long way) from Fremont. I know the area well and it takes a long drive to get to a town with reasonable housing prices and traffic is horrible.

    The economics don’t change based on what Elon likes or where he wants to live. While it can be more convenient for him to have a plant in Fremont, the cost to be there is not on par with the rest of the automotive industry’s costs. I don’t buy into the “we have to be there because that’s where the talent is” argument. I know lots of people that have and do live in the area and hate it. They only live there because that’s where the jobs are they want. They would much rather be someplace else where they would keep more of their paycheck and live in a home rather than a shoe box.

    If Tesla had hinted at locating a plant in the Detroit area, the traditional car manufacturing zone, they may have been given a very sweet deal on land, buildings, tax abatements, etc. That would have meant being closer to experienced feed-in suppliers and shops better equipped to handle all of the rework they have now. Design and research could be kept in the SV/Bay Area, but the mundane large scale manufacturing end could be someplace less costly. Yes, yes, the Gigafactory would have to be closer too. The other bonus of being in “car country” is access to automotive workers with experience. Sod the programmers in SV, Tesla needs people that have built cars before and managers with time on the Line.

    You should notice that eTailers build their big fulfillment centers out of town but next to interstate highways and train tracks rather than in the middle of large cities. Even when they are close to large cities, they build in the worst part of town that affords good access for trucks and trains. It’s the same principles at work. They are trying to keep their cost of operations down as much as possible. If they are the only major employer in the area, they can dictate wages better. They can also get away with paying low wages if the cost of living is low. If they can get land for free and big tax deals, that’s even better. It’s not a big deal to be 2-4 hours out of town to save a shipload of money. The packages are delivered the next day and customers are happy.

  • Douglas Messier

    The earnings call today was cuckoo. Elon cut off two analysts, refusing the answer their questions, and then spent half an hour giving an interview to a fanboy. People are wondering if this is his Jeff Skilling moment.