On Thursday, Elon Musk held a “Cyber Rodeo” to celebrate the opening of Tesla’s new factory in Austin, Texas. Giga Texas, as the plant is known, is where the company plans to make its Model Y crossover as part of its plan to ship 1.5 million electric vehicles this year. It’s also where the company plans to build the upcoming CyberTruck, though Musk said production has shifted to next year.
The factory itself is quite impressive. Musk says it’s the largest factory in the world by volume, and if you turned it upside down, it would be bigger than the Burj Khalifa, the world’s tallest building. I’ve been to the Burj Khalifa, but I wasn’t invited to Cyber Rodeo, so I have to take his word for it.
The event was quite the show too, with 15,000 people listening to live music and a performance by Musk onstage to talk about Tesla’s future. However, it was something he said about the company’s past that I found most interesting.
“When we first started at Tesla, I thought maybe — optimistically — we had a 10 percent chance of success,” Musk said as he began his comments. It wasn’t the first time Musk said something similar. As far as I can find, it came up in a podcast interview from 2019. “I never really thought before it actually happened that it would be so successful,” he added at the time.
It’s hard to argue that Tesla hasn’t been hugely successful. It is the most valuable car company in the world – and not least. Its market cap, at just over $1 trillion, is more than all the other major automakers combined.
That’s despite the fact that Volkswagen and Toyota each produce nearly 10 times more cars. On the other hand, when it comes to electric vehicles, Tesla accounts for about three quarters of all EVs registered in the US. It has also made Musk the richest man on Earth.
That said, I’m not sure if Musk was wrong about being pessimistic about Tesla’s chances. Building a car business from scratch is very difficult. Cars are complicated machines with literally thousands of moving parts. Most of Tesla’s competitors have been around for generations and have established factories and suppliers. In the beginning, Tesla only had an idea: that you could build a car powered by electricity that people would actually want to buy.
You could say it’s a noble idea. If you believe that electric vehicles are important for the future of the planet, the obvious hurdle is that you need to convince people to buy them. The idea behind Tesla was that electric vehicles didn’t have to make compromises.
The point is, that might be a great idea, but having a great idea isn’t nearly enough. “Prototypes are simple,” Musk said on the Cyber Rodeo stage. “Production is difficult.”
That’s true. Tesla, in particular, has had a hard time. The famed Model 3 nearly brought the company out of business, with Musk saying the company met within a month of that fate during what he called “manufacturing and logistics hell.”
According to Musk, it wasn’t a great idea that Tesla made, it was the people. “The incredible work of the Tesla team has brought us here for many years,” Musk said, thanking his team.
Even if Musk is the very public face of Tesla, it’s certainly not something one person can build alone. You got the sense, watching Musk speak, that Giga Texas represents a sense of accomplishment and a sense of validation that the company really made it. More importantly, it seems he recognizes that it took the collective effort of thousands of people to get there.
That is an important lesson for any leader. Your great idea probably gives you – optimistically – a 10 percent chance of success. It’s probably worth 10 percent of the business you’re building. The rest is completely dependent on the team you build.
The opinions expressed here by Inc.com columnists are their own, not Inc.com’s.
This post Elon Musk admitted he didn’t think Tesla would make it. Here’s What He Says He Was Wrong
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