New York: Maybe Elon Musk was doing journalists a favour.
August is famously the cruelest month for reporters, with its vacationing sources and dearth of real news. So a mysterious tweet from Tesla’s CEO was something of a godsend on a dog day Tuesday afternoon:
When the appointed time came, the tension ratcheted up further as Musk tweeted the world would have to wait another 30 minutes until a press embargo expired.
And then, at 3.30pm EDT, we stopped holding our breath—and the stock market kind of did the same, albeit with more of a “meh” than a “gasp!”
Tesla’s news—upgrades to the Model S and X—wasn’t nothing. The new Model S, for example, carries a 100 kilowatt-hour battery that gets it from a standing start to 60mph in 2.5 seconds and has a range of more than 300 miles. For anyone interested in electric vehicle technology—or just vehicles, period—this is a big deal.
The problem for Tesla, and anyone who bid up its stock Tuesday afternoon, is that it has already pushed investors’ horizons out so far, in the interest of raising more capital, that even going beyond “ludicrous speed” on its flagship car doesn’t get pulses racing. If your CEO has spent months and months talking about a new mass-market vehicle, home batteries, buying SolarCity, electric trucks and robo-taxis, then cutting that zero-to-60 lag by 3 tenths of a second seems rather humdrum.
That’s especially so when the new versions of the S and X will start at north of $130,000 apiece. Expensive cars do fund (eventual) mass-market cars, according to Musk’s master plans. But this move further toward the truly dedicated speed freaks out there does jar somewhat with the growing focus on the Model 3—where once-frequent updates of subscriber numbers are now noticeable by their absence.
In contrast to Tesla’s own approach on Tuesday, though, there’s no point making this issue bigger than it really is. By tweaking its existing product to tempt more buyers, Tesla is doing what any car company does.
It’s just that, after all the updates already this year, no one’s buying the stock for that. As if to emphasize this point, while reporters were busy thinking up synonyms for “accelerate,” SolarCity made a less-heralded announcement of its own just after the market closed.
Earlier this month, the company filed to sell $124 million of bonds maturing in 18 months at a notably high cost of 6.5%. On Tuesday evening, it announced that Musk, Lyndon Rive and Peter Rive—SolarCity’s chairman, CEO, and technology chief, respectively—would be buying $100 million of them. Hot cakes, these things plainly aren’t.
Which serves to demonstrate, again, just how much of a risk Tesla’s shareholders will be taking if they vote the SolarCity acquisition through. Still, about those faster cars... Bloomberg