4.

0 LEADERSHIP STYLE

Leaders transform values into action and actions into lasting organizational values
(Ciulla, 1999). More often than not, leaders are rooted in the success of their
organisation. Leadership is defined as the art of inspiring people to perform towards
achieving an organisation’s goals (Satyendra, 2015). Successful leaders understand the
importance of guiding their employees towards the right path in reaching organisation
goals.

Tesla has undergone various leadership changes since its conception. Martin Eberhard
led the company as its CEO until his dismissal in 2007, Musk citing his inexperience,
underestimation of production cost, and overestimation of production time contributed to
the company’s financial struggle (Lemkin, 2013). Ze'ev Drori succeeded the position
from 2007 to 2008 and was assigned the challenging task of reviving the company’s
ailing financial situation. In October 2008, Elon Musk took charge as CEO and saw the
company through its most challenging times. Musk also moved to retrench 25% of
Tesla’s employees to reduce operating cost (Claire and Miller, 2008).

Musk is a transformational leader, a leadership style often associated with leaders who
inspire positive change in their followers (Uddin, 2016). These leaders are commonly
energetic, enthusiastic, hands-on and very focused in achieving their goals. Musk
believes in involving himself in the business process, which has paid off as Tesla makes
it first quarterly profits in 2013.

Musk is also famous for setting high targets, which his employees often found difficult to
achieve. In 2016, Musk publicly set the target for the delivery of 200,000 Model 3 sedan
by the end of 2017 (Pulliam, Ramsey and Dugan, 2016). Tesla reportedly failed to
achieve this target citing issues with supply chain, which affected company stocks
(Rapier, Graham, Matousek, Mark, Ugarino, 2019). Musk also announced taking Tesla
private at $420 per share, leading to a flurry of trading that drove up Tesla stock price.
The move, however did not take place, causing the SEC to investigate and charge
Musk with securities fraud (Salinas, 2018). This further affected Tesla stock price, with
Musk threatening to leave the organisation. A settlement of $40 million was reached,
Musk to stepdown as chairman for a period of 3 years, and his twitter account subjected
to Tesla oversight. This verdict was reported to avert further drop in company stocks as
a result should Musk leave Tesla (SEC, 2018).

Musk is revered for his can-do attitude. His lead-by-example leadership style has heard
praises from both his staff and business observers. In order to reach their ambitious
targets, employees quoted that Musk slept in the factory to remain easily accessible for
decision makings. He has also reportedly offered to personally test every new autopilot
feature of the vehicles, ensuring that his high expectations are met (Miley, 2018).

Under Musk’s stewardship, Tesla has grown as the leader in EV technology. The
visionary is known to push his employees to do better and improve on existing
technologies to solve productions and performance issues. On Battery Day, an event
that coincided with Tesla’s annual general meeting on 22 September 2020, Musk
announced improved battery design and plans to reduce outsourced battery
productions. He also announced 600,000 preorders for the new Tesla Cybertruck
(Lyons, 2020).

Tesla’s stock price has also seen an increase of 695% in 2020 and profits improved by
a staggering $721 million (Elliott, 2021). The rise was attributed to its announcement for
increased deliveries in 2021 and increased deliveries. Musk has managed to guide the
company through a challenging time and Tesla made a considerable profit, when other
companies were scaling down due to the Corona Virus outbreak.

Musk’s focus on innovation and Tesla’s success continues to defy public opinions (Fox,
2020). His resolution in achieving his goals for Tesla has driven the company to
continuously achieve success in technological advancements and innovation. Despite
the many challenges Tesla continuously faces, it remains to this day a success not
because of its financial standings, but because it preserved under good leadership and
talented employees.
Tesla will continue to astound people in the years to come and Musk’s determination
will see it succeed. Tesla should continue defying expectations and Musk’s leadership
qualities should be a bench mark for all leaders to emulate.

Our suggestions to better the company would be a change in leadership in the

foreseeable future, perhaps one who will remain focused on Tesla’s growth with Musk
backing from behind the veils. Since Tesla in now in its growth, a dedicated fresh mind
could lead the company further.

XClaire, B. and Miller, C. (2008) ‘Tesla Says It Will Lay Off Employees and Delay Its All
Electric Sedan Until 2011’, pp. 6–7. Available at: https://www.cnbc.com/id/27221946
(Accessed: 1 March 2021).

Elliott, R. (2021) Tesla Posts First Full Year of Profitability, Earnings. Available at:
https://www.wsj.com/articles/tesla-tsla-4q-earnings-report-2020-11611708257
(Accessed: 1 March 2021).

Fox, E. (2020) Elon Musk Suggests American Companies Focus More on Innovation &
Makin, Tesmanian. Available at: https://www.tesmanian.com/blogs/tesmanian-blog/elon-
musk-suggests-american-companies-should-focus-on-innovation (Accessed: 28
February 2021).

Lemkin, J. M. (2013) Why Was Martin Eberhard Forced Out Of Tesla Motors?, Forbes.
Available at: https://www.forbes.com/sites/quora/2013/11/12/why-was-martin-eberhard-
forced-out-of-tesla-motors/?sh=68c7a05e55c4 (Accessed: 1 March 2021).

Lyons, K. (2020) Tesla Battery Day: biggest announcements - The Verge, The Verge.
Available at: https://www.theverge.com/2020/9/22/21450840/tesla-battery-day-
production-elon-musk-tabless-range-cathode-cobalt-plaid (Accessed: 1 March 2021).

Miley, J. (2018) Elon Musk Voted as One of The Best CEOs by His Employees,
Interesting Engineering. Available at: https://interestingengineering.com/elon-musk-
voted-as-one-of-the-best-ceos-by-his-employees (Accessed: 1 March 2021).

Pulliam, S., Ramsey, M. and Dugan, I. J. (2016) ‘Elon Musk sets ambitious goals at
Tesla—and often falls short’, The Wall Street Journal. Available at:
https://www.wsj.com/articles/elon-musk-sets-ambitious-goals-at-teslaand-often-falls-
short-1471275436 (Accessed: 1 March 2021).

Rapier, Graham, Matousek, Mark, Ugarino, R. (2019) Elon Musk promises about Tesla
that haven’t worked out yet. - Business Insider. Available at:
https://www.businessinsider.com/elon-musk-tesla-promises-that-havent-worked-out-yet-
2019-4 (Accessed: 1 March 2021).

Salinas, S. (2018) SEC charges Tesla CEO Elon Musk with fraud, CNBC. Available at:
https://www.cnbc.com/2018/09/27/tesla-falls-4percent-on-report-elon-musk-sued-by-
sec.html (Accessed: 1 March 2021).

SEC (2018) SEC.gov | Elon Musk Settles SEC Fraud Charges; Tesla Charged With and
Resolves Securities Law Charge, SEC.gov. Available at:
https://www.sec.gov/news/press-release/2018-226 (Accessed: 1 March 2021).

Uddin, K. (2016) ‘A Critical review on Leadership: A Case Study on Elon Musk’s

Leadership Style Submitted by’, pp. 1–11.