If you think Tesla and CEO Elon Musk can't keep quiet, think again: the company's new self-driving chip was developed in near-total secrecy.
In the startup world, when a company is fresh and new and modestly funded, it will typically spend a few years under the radar, trying to develop a viable product or service. When it's time to take that business to market, the startup exits"stealth" mode and reveals what it's been up to.
There are periods, however, when a retreat to stealth mode might be warranted. Tesla now finds itself in one of those periods.The company is coming off a tortured 2018 — CEO Elon Musk struggled to launch the Model 3, failed to take Tesla private, and was punished by the SEC. There was more, but those were the biggies.
Musk told Morgan Stanley analyst Adam Jonas that autonomy was going to gobble up all Tesla's adventurous spending, so it's safe to assume that much of the new capital could head in that direction.Tesla has always been a dysfunctional carmaker. That was okay because being a functional carmaker in 2010 would have spelled Tesla's doom. It needed to buck the auto industry to attract enough customers to take a crazy chance on an electric car.
But for Tesla, the cost structure is totalizing. The company doesn't really have another business. It sell EVs or bust. Given its financial vulnerabilities, Tesla needs most of the profits in EVs to flow to its balance sheet. That's the only way it will survive. And the price of that survival is functional execution. Incredibly boring, functional execution.My dream is that Tesla will wisely take its new $2.
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