From The Otameal.
Will Musk come out of this?
The conflicts of interest certainly seem problematic—and not just for the shareholders. Consider the following: as the two companies, SolarCity and Tesla, were delaying operations and refusing to bargain with workers, Brad W. Buss received $4.95 million as a Tesla director in 2015 alone, on top of his $32 million as the Chief Financial Officer at the insolvent SolarCity. Antonio J. Gracias, founder and CEO of the private equity firm Valor Management, sits on Tesla’s board and owned 211,854 SolarCity shares at the time of the merger. Steve Jurvenston, another Silicon Valley venture capitalist, earned over $6 million as a Tesla board member in 2016 and owned over 417,450 shares of SolarCity during the merger. His investing firm, Draper Fisher Jurveston, put $18.9 million in SolarCity. Nancy Pfund, a venture capitalist at DBL investors, another equity firm, owned over 1.5 million shares of SolarCity at the time of the merger, and Pfund’s partner at DBL is Ira Ehrenpreis, who owns the map software firm MapBox and is also a Tesla director. (In 2015, he secured an agreement with the auto company to use his software, at a $5 million fee on top of sales.)
This needull presents both sides of the argument. Some look at Tesla as game changer while others are not that impressed.
Because that scenario seems like a real possibility, a car that doesn’t need fossil fuel to run does feel like a game-changer, contrary to Cowen’s argument. Even when accounting for the environmental impacts of manufacturing a Tesla and running it on electricity from a coal-fired grid, its zero-emissions feature still counts as progress, given it will help reduce both future climate impacts and localized pollution from urban traffic, which disproportionately affect communities of color.
The writer of the needull argues that Tesla is not disruptive.
The framework asks 5 questions:
- Does the product target over-served customers (i.e., with better value for money) or create a new market?
- Does the disruptor have incentives to enter higher performance segments while incumbents retreat?
- Does it have a trajectory for fast, across the board, performance improvements?
- Does it create a new value network (e.g., sales channel)?
- Does it disrupt ALL incumbents?
The answers to these are apparently: no, no, yes, yes and no. That leads Bartman to conclude that Tesla’s products are likely sustaining rather than disruptive.