Elon Musk, Creator of 'Cheonseulra': Tech Genius or Delusional? [Im Juhyung's Tech Talk]

Tesla Joins '1 Trillion Dollar Club' 18 Years After Establishment
Mixed Reviews on CEO Elon Musk's Management Style
Early Investment Predicting Electric Vehicle Technology Potential
Built 'Fandom' Through Uninhibited Communication on SNS
Criticism of Being "Cult-like"

Elon Musk, CEO of Tesla.
Photo by AP Yonhap News

[Asia Economy Reporter Lim Juhyung] On the 26th of last month (local time), the market capitalization of Tesla, an electric vehicle company listed on the U.S. stock market Nasdaq, surpassed $1 trillion (approximately 1,170 trillion KRW) for the first time in history. The stock price per share also exceeded $1,000 (1.17 million KRW), earning it the nickname "Thousand Tesla." However, some view Tesla's high stock price with skepticism. Critics point out that its production volume is far too low compared to other major automobile manufacturers, suggesting it might be a "bubble." Controversy also continues over Tesla CEO Elon Musk's uniquely ambitious management philosophy.

◆Tesla sells 500,000 units annually, yet its market cap is $1 trillion

Tesla's market capitalization has been higher than the combined value of the world's nine largest automakers since last year. This includes Japan's leading car brand Toyota, Germany's Volkswagen, the U.S.'s General Motors (GM), Honda, and South Korea's Hyundai Motor Company.

The problem lies in Tesla's actual revenue and profits being disproportionately low compared to its corporate value. As of last year, Tesla produced just under 500,000 vehicles. Compared to established automakers like Volkswagen (9.3 million units) and Toyota (7.2 million units), this is just a drop in the bucket.

Even compared to other U.S. companies in the existing "trillion-dollar club," Tesla's corporate profits are too low. For example, smartphone manufacturer Apple’s quarterly net profit far exceeds $20 billion (about 23 trillion KRW), whereas Tesla’s net profit for Q3 this year is only about $1.62 billion (approximately 1.9 trillion KRW).

Whether by company size or earnings, there are criticisms that Tesla is too small to be considered a "trillion-dollar company."

◆Musk CEO’s success secret lies in his perspective on 'technology'

As a result, evaluations of Musk, who founded Tesla in 2003, are sharply divided. Some regard him as a visionary tech entrepreneur who invested heavily in the future trend of electric vehicles, while others criticize him as a delusional figure who inflated the stock price through hype.

Tesla produced just under 500,000 vehicles last year, which is relatively small compared to global automakers such as Volkswagen and Toyota. / Photo by Yonhap News

So, what is the management secret behind Musk CEO leading Tesla into the "trillion-dollar club" in about 18 years since its founding?

Experts say that while there is some debate over whether Musk is truly a "great innovator," he is unrivaled in optimizing and commercializing new technologies.

According to Tim Ackert, an automotive market expert at global market research firm IHS Jane’s, Tesla benefited by becoming a "market leader" at the point when electric vehicle technology was maturing.

Ackert explains, "When other established companies viewed electric vehicles pessimistically, Elon Musk essentially invested alone in electric powertrains, batteries, and software technology," which allowed Tesla to get ahead.

It wasn’t just about investing in technology. Ackert says about Musk, "He conceived the right idea at the right time and place," emphasizing that "he knew the market was ready to embrace electric vehicle technology." In other words, Musk foresaw the potential of electric vehicles, which had already reached a technological maturity stage, made bold investment decisions, and was the first to reap the rewards.

◆Musk CEO’s path, often described as 'cult-like'

Of course, recognizing technological potential is not Musk CEO’s only strength. He has also created a "fandom" through unique actions such as actively using social media platforms.

In a live broadcast interview in 2018, CEO Musk smoking marijuana / Photo by YouTube video capture

Known as "Teslarati," these followers take Musk’s words seriously, create websites to share rumors related to Tesla, and many of them not only identify as Musk fans but also participate in Tesla stock investments.

However, Musk’s behavior sometimes sparks controversy. For example, he has drawn criticism from some investors for his candid remarks about the cryptocurrency Dogecoin. In the past, Tesla’s stock price plunged nearly 7% after he was seen smoking marijuana during a live interview.

Western economic media outlets such as Bloomberg and The Economist have described this behavior as "cult-like." As long as Musk continues this style of management, mixed evaluations of his achievements are expected to persist.