Tesla's latest broken promise.
John Goreham's picture

Tesla's Latest Broken Promise (Going Private With Help From Big Oil) Revealed With A Late Friday Announcement

Tesla's latest broken promise by Elon Musk revealed late Friday. Should we cheer or boo?
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Remember when Elon Musk promised early Model S buyers that their loaner car would be a Tesla electric car "better than the one they own" when they needed service? Remember Elon Musk telling everyone that the Model S was the world's safest car? How about when Elon Musk told us all that the Model 3 would "start at $35K."

How about this tweeted promise below:

Elon Musk's promises for Tesla are becoming a bit of a joke that isn't funny. His latest broken promise was announced by the company late Friday. Just like sleazy politicians do to minimize the fallout and slow down news coverage.

The big-oil bailout turning Tesla into a private company isn't happening. Musk's "secured funding" wasn't, and his plan to "keep small investors" was ridiculous from the start. Stop us if you've heard this one before.

When Musk tweeted that he was planning to take Tesla private it stopped trading on the stock of the company that employs him. It was that much of a surprise to everyone. Including the company's board of directors, who usually are kept in the loop on such things. Oh, and the SEC, whose sole job is to keep private companies fairly traded.

Musk's idea for taking Tesla private hinged on using money from big oil. Money that was earned by pumping oil out of the ground, making it into gasoline and diesel fuel, pumping that into cars and trucks and then CO2 being pumped into the atmosphere. Wasn't that exactly the sort of thing that Tesla was against? We guess not, since it was money from Saudi Arabian oil profits that was the linchpin for this deal. Money Elon thought he had. And did not.

Listen, we understand you don't believe us (because we don't pander to Tesla here), so here is part of what Musk wrote about the plan on August 13th.
"Going back almost two years, the Saudi Arabian sovereign wealth fund has approached me multiple times about taking Tesla private. They first met with me at the beginning of 2017 to express this interest because of the important need to diversify away from oil. They then held several additional meetings with me over the next year to reiterate this interest and to try to move forward with a going private transaction. Obviously, the Saudi sovereign fund has more than enough capital needed to execute on such a transaction."

You can read Musk's full comments on the plan to use Saudi oil money to keep Tesla afloat a bit longer here. If you think Tesla taking Saudi oil money to keep going is terrible and are glad the deal isn't happening, keep watching. As Musk told us on August 13th, "...the Saudi fund bought almost 5% of Tesla stock through the public markets." Big oil is now one of Tesla's largest shareholders.

You can read Elon Musk's doublespeak for how this plan unraveled on the Tesla blog. Believe as much of it as you like. The new mantra is that Musk is "...incredibly excited to continue leading Tesla as a public company."

Related Stories:
The $25K Battery Electric Car: Tesla's Elon Musk Talks The Talk As GM and Nissan Walk The Walk
Tesla Model 3 Actual Deliveries vs. Tesla's Broken Promises

Author note: The author has never owned Tesla stock, has never shorted any stock, and does not own any shares in any mutual funds that hold Tesla stock.


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Comments

I do not see how the tweet "Am considering taking Tesla private at $420. Funding secured.” Constitutes a "promise". He DID consider the option. But ultimately the buyout would have forced out some of his most supportive mutual-fund investors, potentially to be replaced by rival carmakers and Big Oil, which could have been in conflict with his long term goals for the company. Plus it would have replaced some small investors who are EV supporters with larger, institutional investors with different agendas. Likewise "Looks like we can reach 20,000 Model 3 cars per month in Dec" is an Estimation, not a Promise. They initially struggled with bringing the Model 3 to market, but in Q2 they produced over 28,000 Model 3s. And current indications show that they may hit 6,000 Model 3s being produced a week moving forward.