Question

All the Greek tragedies center on man's failure because of "hubris." Many eyes are watching billionaire Elon Musk's progress in pushing out the Tesla Model 3. Do you think Elon used the AFN equation when he built the new battery factory and adapted an old Toyota facility to build the Model 3? Did Tesla grow too fast? Do you think Elon will make it? How might he have done it better?

Answer 1

Elon Musk has created a transformation in automobile industry due to its ambitious Goals of making electric and hybrid cars in year 2008.Tesla has forced the auto industry to change rapidly because of its rapid technology innovations like spontaneous software updation and auto pilot mode. Tesla has strengths and weakness too.As the unique position in the market and robust sales increases its strength but high debt load and less liquidity due to heavy investment in the Gigafactory1 is making it a weak company to deliver its Goals of delivering the Tesla Model 3 as per the projections.It is struggling to manufacture 5000 cars to be delivered per quarter in the market.The Elon says it is due to dependence of the company in heavy automation and supply of battery is low from its new Gigafactory manufacturing base.

An AFN equation can be defined as increase in assets less increase in liabilities less increase in earnings and if value is negative means project undertaken will generate extra income for the company.So according to this Tesla is working to built its new manufacturing facility of lithium batteries for model 3 by making huge investments .So definetly the investment in the manufacturing base is high than the assets so the value of AFN is expected to be negative.Which they can use in other earning opportunities.

The manufacturing base at Gigafactory1 is picking up the pace of delivering batteries for manufacturing model 3 .which will help Tesla to manufacture Model 3 as per the projections.So with the time the Elon Musk will be able to make it.

According to industry experts Elon Musk should not project high goals ,he should start with making affordable projections.Even with this Elon musk is supposed to have many project ideas running simultaneouly which are innovative but being focused on one goal can make him more productive to achieve one goal at a time.