Tesla CEO Elon Musk needs to delegate more and work with an outside distributor if he’s going to make the electric car maker “sustainable,” Jim Press, former COO and president of Toyota Motor Sales U.S.A., told CNBC on Monday.
“You need to have a marketing organization, have to have sales, you have to have an active distribution channel, and you really do need day-to-day management operation. You can’t sit by the plant and spend the night there to run everything. You can’t funnel everything through one person,” Press said on CNBC’s “Closing Bell.”
Tesla has battled widespread criticism since Musk’s Aug. 7 tweet that he was planning to take Tesla public and had “funding secured,” which may have violated Securities and Exchange Commission rules. In a blog post, Musk attempted to clarify that his claim about secured funding was based on repeated and ongoing conversations with Saudi Arabia’s sovereign wealth fund, which was cast into doubt when it surfaced on Sunday that the fund is in talks to invest in a Tesla rival.
Going private is one way to avoid close scrutiny by the public market, which Tesla has faced in recent months as it fought to meet Model 3 production goals. Some analysts speculate Musk has wanted to take Tesla private for a while, and the press and shareholder hype surrounding Model 3 production goals hastened his ambitions.
Despite Musk’s concerns, Press, who was also the deputy CEO of Chrysler, said the market has been pretty fair to Tesla so far, especially when compared with legacy motor companies, such as Ford. But now, he said, “There’s some reality coming into it,” meaning Tesla will have to get profitable or face ongoing market adjustment.
“The reality is, the market treats him very well. If you look at the market cap of Tesla, $50 billion, compared to Ford, that makes a profit — the stock is about $9 — it shows the disconnect, and there is an adjustment that’s occurring,” Press said.
Tesla shares closed out the day up 0.96 percent at $308.44.
To get profitable, Press added, Musk needs to learn to delegate, both within the company and without.
“I always have a saying, and that is, you don’t have stress, you should give it. And [Musk] doesn’t have anyone to give it to,” Press said.
Press said Musk should hire someone to “run day-to-day” operations while he works at “30,000 feet” and should look outside of the company for independent distribution channels, such as third-party dealerships.
“He is the only one that’s trying to run the distribution channel and capitalize that at the same time. There’s a whole opportunity there for an independent distribution channel to take half the work load off and create the sales,” Press said.
And as for going private, Press said it may be best for the carmaker to stay put, rather than risk the unknown pressures from the private market.
“I understand the frustration, but going private may not be the best. You know, the devil that you know — versus the devil you don’t — may actually treat him better,” Press said.
Tesla did not immediately respond to CNBC’s request for comment.
