Big changes are coming to Elon Musk’s business empire. After the Securities and Exchange Commission (SEC) announced last week that they were filing a fraud lawsuit against the eccentric billionaire, the board at Tesla moved quickly, with Musk stepping down as chairman and agreeing to have his communications monitored. It seems like a new day, but then again, perhaps very little will change at all. The New York Times reported that Tesla’s troubles are far from over, and it’s possible that Musk’s erratic behavior may still have an impact on the company’s future.
While Musk is no longer chairman of the board at Tesla, the Times noted that he is still the CEO, and he has showed no signs of changing his managerial style. In fact, shortly after agreeing to step aside, Musk sent an email to all company employees urging them to work harder—at 1:08 a.m. on a Sunday. The SEC might be trying to rein in Musk’s unpredictable ways, but it’s unclear whether they’ll have any luck.
“I get the feeling that the SEC wants to have more adults in the room,” said Peter Henning, a law professor at Wayne State University. “But will Musk listen to them?”
It’s hard to imagine a future at Tesla without Musk, who has always been the external face of the organization as well as its internal driving force. Musk has always been the company’s spokesman, its chief decision-maker, and the visionary with the long-term plan for the company’s future. He’s known for his intensity and work ethic, which can be good qualities, but which have also alienated employees at times. This recent settlement with the SEC may serve to tone down Musk’s influence and instill a sense of normalcy at Tesla.
That may help. For now, anyway, Tesla is still very much a struggling business; the Times noted that the company has had trouble producing and delivering its Model 3 cars, a problem that continues to threaten Tesla’s long-term financial viability. Under Musk’s leadership, Tesla is short on cash and has looming bond payments that it might be unable to meet. Speculation abounds about whether Tesla has what it takes to survive.
“It’s hard for me to believe they will be profitable by traditional standards,” said Karl Brauer, executive publisher of Autotrader and Kelley Blue Book.
