Not long ago Tesla posted its highly anticipated second quarter earning results. Despite posting a greater than forecasted loss per share, Tesla appeared to highlight its continuing journey towards profitability, something the company has never yet achieved. Both Tesla and Musk have a number of high profile critics, many of which take to social media to highlight the impossibility and naivety of Musk's vision for a renewable future with some claiming Tesla is a failed company, part of an unrealistic and unachievable vision.
Although, Tesla is already a success.
Teslas critics, many being high profile investors, make it no hidden secret that the company is the most shorted stock in American markets today. To understand what a 'Short Position' is, here is a detailed explanation, in essence it is a bet that the company will lose value over time.
Tesla has been hit by criticism for the past year over failure to become profitable. Critics have been waiting patiently to see if the Model 3 vehicle can be its key to profitability, with many suggesting it as a 'last chance' amid a string of quarters where the company has burnt through a significant volume of cash. So much so, Bloomberg estimates Telsa spends around $7,430 every minute.
Despite being the most shorted stock in America and regularly under fire from critics, Tesla has proven to already be a success. People are quick to forget that Tesla is not just a car company. It is pioneering battery technology, revolutionising energy storage and making renewable energy accessible at home and on the road. It is creating a new, sustainable energy ecosystem.
Recent energy projects have been relatively quiet on social media, aside from the typical Musk-esk 100 day bet with Southern Australia and federal governments saying he would resolve their energy problems within 100 working days or offer the project free.
"Tesla will get the system installed and working 100 days from contract signature or it is free. That serious enough for you?" - @elonmusk
Consolidated Power Products, an Australian based construction company helped assist Tesla with this challenging project to help meet the ambitious target, as the video below highlights. Southern Australia has been blighted by blackouts and extended periods of power fluctuation, with the problem linked to a wider Australian lack of a capacity market, leaving few mechanisms to cope with peak demand.
Tesla's activities stretch far beyond Southern Australia, with PowerPack projects springing up in Kauai, Hawaii, with the island burning through fossil fuels to power night-time demand. Tesla have transformed energy use on the island enabling renewable energy availability day and night. American Samoa is also benefiting from a recently installed 'Microgrid', helping provide resilient, clean and affordable power whilst reducing the historical dependency on diesel powered generators.
Tesla's microgrids are renewable in their design. The design offers a scalable modular system, allowing governments and commercial entities to increase their capacity in line with growing demand, giving time to make adjustments to their wider power grids. Most importantly to many isolated areas, these microgrids offer a dependable emergency power backup, if existing grids run into problems. This cannot be underestimated for islands like Kauai and American Samoa, where there can be very limited alternatives when the power goes out and with the recent introduction of a 'Storm Watch' function, where a Tesla Powerpack will automatically detect if a storm is approaching and ensure it is prepared by focusing on energy storage. This could be of significantly help along storm tracks across the globe and in particular hurricane tracks in the USA.
Tesla faces an uphill battle to see out its vision of a sustainable, clean future. In the US alone according to the EPA in 2016, both electricity production and transportation accounted for 28% of the nations greenhouse gas emissions. 56% is a big slice of emissions, all of which Tesla proposes a plausible and scalable solution towards. However it would be naive to assume to look solely to Tesla to resolve the escalating global energy and transportation issues. Despite everything though, Tesla offer a renewed sense of hope against the overwhelming stacking odds. They are not just a car company, they are a renewable company. One that challenges the status-quo and the existing fossil fuel ecosystem.
As has recently been pointed out by Elon himself, the pressing issues of being a publicly traded company are that a company's success is its ability to generate a profit and in turn benefit its shareholders. The issue with this is increasingly shareholders and businesses expect short term results. It is part of a wider issue relating to 'Short Termism'.
"Short-termism refers to an excessive focus on short-term results at the expense of long-term interests."
Arguably it is inhibiting Tesla's mission to create a sustainable and renewable energy future. With the company having to take a short term focus to satisfy a growing number of shareholders expecting a return on their investment, whilst denting long term strategy and potential growth. Except, it is not about investing for a short term profit in this case. It is about investing in the future. The problem with Tesla as a publicly traded company is that it is so hard to compare it to anything else, since it is so different to what has come before. It is a question of whether people are ambitious and willing enough in being a part of progress. What it boils down to is whether those people are ready for that?