Tesla, Twitter, Neuralink… Elon Musk’s chaotic year in 2022

Avec Twitter, Tesla et SpaceX, la tech a gravité autour d

What a year for Elon Musk! In one year, the man who was the richest man in the world lost this status and saw his fortune melt from 270 billion to 140 billion dollars. The main cause ? The electric car manufacturer Tesla, of which he is the main shareholder with 13% of the capital in addition to being the leader, saw its share price collapse by more than 69% over the year.

But if Elon Musk deserves the title of personality of the year 2022, it is for his takeover of Twitter for 44 billion dollars, filed in April. Unexpected, the acquisition turned into a soap opera with many twists and turns, the businessman trying to withdraw from the signing of the contract and to overwhelm the management of Twitter to the point of bringing the case to justice, before finally take control of the social network to impose a brutal direction on it. Already more talkative than his billionaire counterparts, Elon Musk has multiplied public statements to promote his conservative political ideas, sometimes at the expense of his portfolio of companies (Tesla, SpaceX, Neuralink and The Boring Company).

Keeping Up With The Musk Family

The image of the genius scratched since the takeover of Twitter

Elon Musk began the year proud of the resounding successes of his two main businesses, electric car maker Tesla and space company Space X, to the point of comparing himself to Tony Stark, the billionaire superhero and brilliant inventor behind the armor of Iron Man. So when he made his bid to become Twitter’s sole shareholder at a price of $54.20 a share, well above market price, pundits looked for a logical explanation. Why would the brilliant businessman buy a company that has been struggling for more than a decade to find its economic model? The billionaire remained very vague on the game, and barely sketched out a project – nicknamed X – which would consist of transforming the social network into a super-app, through which payments would pass, like WeChat in China.

But no sooner had the billionaire arrived at the helm of Twitter than he began to describe it as a liquidity hole, in such a dire financial situation that he would risk filing for bankruptcy – even if the company succeeded regularly to break even before redemption. With this justification, Elon Musk repeatedly cut the group’s workforce to the point of laying off more than 60%, closed offices abroad and renewed almost all of the management staff. All this, commenting on each decision with several tweets. As for the ambitious super-app project, it is stammering. The company urgently deployed the redesign of Twitter Blue (an 8 euro subscription supposed to serve as the cornerstone of the payment system) but had to withdraw it several times because of malfunctions, before it was finally implemented. place a month and a half later.

Musk has been building an image of a hard worker for years, which he relies on to demand intense work rhythms from his employees. Musk sleeps on the floor of Tesla factories, he gets involved in engineering and acts as the chief lobbyist for his companies. His extreme method, instinctively, seemed to work: SpaceX’s reusable shuttles bring astronauts to the international space station, while Tesla has given a new dimension to the electric car market. But in the case of Twitter, Musk simply gives the impression of browsing by sight, picking up user submissions unrelated to the company, which he calls ” interesting “.

Worse, the brilliant Elon Musk has revealed his flaws. His speeches in Twitter’s public audio conferences – the Twitter Space – suggested a leader unable to respond to criticism, preferring to leave the discussion or have his interlocutor expelled. The image of the billionaire took a hit, and the latter himself drove the nail into the coffin: in December, he asked through a Twitter poll – which moreover does not respect any of the protections necessary to have rigorous results- if he had to leave his position as leader of the social network. 58% of the 17 million voting accounts (about 12% of his number of subscribers) have expressed their desire for him to leave. Elon Musk said he would start looking for a person for the job, but that he would continue to take care of the software and the servers, that is to say the core value of the social network.

Tesla, neglected and in bad shape

Since the billionaire took control of Twitter at the end of October, Tesla’s stock has plunged 47%, and has fallen below $200 for the first time since November 2020. Over the year, this collapse s rises to 69.5%. In question: the new leader seems sucked in by political issues, and is accused of abandoning the management of the car manufacturer. As he self-qualified ” neither left nor right “, the powerful billionaire called to vote for the Republican camp during the American elections of midterms, and he spends his days commenting on and relaying publications from the conservative camp. To support his ideological fight, he opened Twitter’s internal files to a handful of journalists. anti mainstream ”, with the aim that they expose the inconsistencies and contradictions of the former direction of the social network. Playing with the limits of conspiracy, the series of articles called Twitter Files looked at the banishment of figures from the American far right such as Donald Trump or even the censorship of disinformation on Covid-19.

This commitment is frowned upon by some of Tesla’s shareholders, because the company is already going through turbulence and does not need additional controversy. For starters, its production has slipped in China, largely due to the government’s extreme anti-Covid policy which has disrupted the operation of its Shanghai gigafactory. After a short return to normal, production will slow again in January, against a backdrop of a dramatic resurgence of the epidemic in the country. Then, his projects, like the Cybertruck and the Roadster, announced for years, still don’t have a production date. Only the semi-trailer, announced three years ago, went into production. As for the Tesla range of cars, it receives updates but does not have a new flagship to highlight, while the historical manufacturers (Mercedes-Benz, Volkswagen, Hyundai, Kia…) are committed in its market segment, that the Chinese market is beginning to be invested by local manufacturers, and that its direct competitors (Rivian, Lucid, etc.) are maturing.

Tesla is still the broad leader in its market (65% share, 14 points less than in 2020), but will have to prove in 2023 that it has the tools to remain so. And to achieve this, shareholders demand a 100% committed Musk. The latter denies scattering, but his numerous messages on Twitter suggest the opposite. It’s far from too late for Tesla to turn the corner: the company made $3.3 billion in third-quarter profit, and while it may miss its incredible 50% annual growth target, it doesn’t. nevertheless remains on a positive trajectory.

Neuralink and The Boring Company, two balls in the making?

But Elon Musk does not only have the Tesla situation to manage. As the gem loses its luster, its less successful investments become more visible. Starting with Neuralink, a company created in 2016 which aims to develop brain implants for neurological purposes, for example to fight against paralysis. Early December, Elon Musk has finally presented the next step for his ambitious project: the launch of human tests in the second quarter of 2023, even if the company is still awaiting the necessary authorizations for the moment. But a few days after the presentation conference, Reuters revealed that the company was under federal investigation, prompted by reports of animal abuse. Specifically, Neuralink is accused of rushing its tests, and thus causing avoidable suffering and death to its test subjects. According to the news agency, at least 1,500 animals have died as a result of tests since 2018, including 280 sheep, pigs and monkeys. If this number does not constitute proof of abuse on its own, it is supported by internal testimonies which make the link between failed experiments and the pressure on the development of the product. Elon Musk is said to have repeatedly hinted to employees that Neuralink might shut down if progress doesn’t come fast enough. The company has already missed several deadlines, and is slow to deliver.

Although Neuralink’s situation is not looking good, it is still doing better than that of The Boring Company. Also Founded by Elon Musk in 2016, this company builds tunnels, with the promise of running autonomous high-speed shuttles through them, to avoid traffic jams on the surface. Problem: the first project, a 2.7 kilometer long tunnel inside the Las Vegas Convention Center, finalized in 2020, turned into a fiasco. To begin with, it is only accessible for a limited number of days, and only by conference participants. Then, the shuttles that circulate there are neither fast (50 km/h, far from the promised 240 km/h) nor autonomous, since they are simply Tesla Model 3 driven by drivers. Worse, jams form in the tunnel at peak times, which means the project is not delivering on its original promise. But it was only at the end of November that the wall street journal exposed the extent of the disaster.

American cities that had signed contracts with The Boring Company, as Los Angeles, Baltimore and Chicago had to give up the construction of their tunnels. In the case of Chicago, Musk’s company asked for a budget extension of $455 million when the city was originally supposed to pay only $45 million. Other cities have simply been ignored by society, despite their reminders. In other words, The Boring Company has greatly underestimated the cost of its projects in addition to greatly overestimating its production capacity, resulting in the cancellation of almost all of its sites. Moreover, it no longer promises that its shuttles will be autonomous.

Fortunately, in Elon Musk’s corporate slump, one company still remains untouched: SpaceX. In 2022, the company accelerated the deployment of its constellation of Starlink satellites, the largest of its kind, intended to provide Internet to disconnected territories. The company has announced that it passed the one million subscriber mark for its service in December 2022. Not enough yet to cover the costs of its investment – estimated in 2018 at more than ten billion dollars – but sufficient to demonstrate interest in the offer. But at the same time, the Crew Dragon shuttles continue to ensure the rotation of the crew of the international station: SpaceX has established itself as a must in the sector. And for the moment, Elon Musk’s setbacks do not affect him.