Over the past month, Tesla shares have tumbled by 26 percent in several rounds of steep nosedives. Unlike a normal company stock, which rises and falls on business performance, almost all of Tesla’s value loss in the past month has been due to one person, its founder and CEO Elon Musk.
On August 7, he abruptly announced that he had secured enough funding to take Tesla private. Stock surged to an all-time high immediately following the news but fell sharply the day after when investors found out that Musk had not secured the funding. A week later, shares plunged again after Musk said the go-private plan was abandoned, and they fell one more time last Friday when Musk was caught smoking marijuana on camera during an interview.
All of these recent news reports and their ensuing impact on Tesla stock may lead you to think of Musk as a reckless, irresponsible CEO. (Not to mention, he had to revise Tesla Model 3’s production target several times because his earlier goals for the Model 3 proved to be unachievable.) However, if you look at Tesla’s business performance over a slightly longer time period, you might end up with a very different opinion of Musk as an electric car company CEO.
In January 2015, at the Detroit Auto Show, Musk gave an on-stage interview in which he shared a few estimates for Tesla’s annual production over the coming years. Specifically, he predicted that Tesla would produce 500,000 electric cars annually by 2020 and “at least a few million cars” by 2025.
Those targets sounded ambitious and, perhaps a better term, unrealistic at the time, because in 2015, Tesla was making only slightly over 25,000 cars a year (a majority were the Model S, Tesla’s first model). In other words, Musk was aiming for the company to ramp up its production rate by 20 times in five years.
But he wasn’t joking or trying to bloat Tesla fans’ confidence in the company.
“I don’t want to be complacent about Tesla’s success. It’s hard to sell electric cars. It’s a lot more effort than selling gasoline cars [because] you need a lot more education,” he said during the interview.
Much of that anticipated growth, Musk said, would come from production of the Model 3, Tesla’s first affordable car designed for mass production.
Now, two and a half years later—despite Model 3’s frequent production hiccups—Tesla is surprisingly on track to achieve that goal Musk set in 2015.
Based on the company’s current production pace, Tesla is set to make 275,000 cars by the end of this year, or 11 times its annual production volume in 2015.
Even better, if Tesla manages to maintain production at its current rate, the company will reach an annual volume of three million by 2021. That would be four years ahead of schedule to reach Musk’s goal of “a few million cars” a year.
Below is Musk’s full interview at the 2015 Detroit Auto Show.