Analysis of Leadership Challenges at SpaceX and Tesla Companies

This case study examines the leadership challenges faced by Elon Musk at SpaceX and Tesla, two prominent companies in aerospace and electric vehicles, respectively. It highlights the financial and competitive pressures both companies face, including funding gaps, intense market competition, and production rate issues. The study analyzes Musk's strategies for overcoming these challenges, such as leveraging his confidence to attract investors and his willingness to take drastic measures to secure funding. It also offers recommendations for sustainable funding, efficient resource utilization, and increased production capacity to maintain market position. The analysis underscores the critical role of strong leadership, coupled with strategic financial planning, in navigating the complex challenges of innovative industries. Desklib provides similar solved assignments and study tools for students.

PROJECT LEADERSHIP
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SpaceX
• Known as Space Exploration Technologies Corp.
• American company who manufactures aerospace and services for space
transportation (Seedhouse, 2013).
• Headquarter in Hawthorne, California.
• Founded by Elon Musk in the year 2002.
• The goal was to reduce the transportation costs of travelling to space.
• It is the first liquid-propellant rocket which was privately funded
• It was the first company who sent a spacecraft to the International Space
Station
• The first orbit rocket to have propulsive landing
• The first orbit rocket to be reused
• SpaceX has flown to the International Space Station for 14 resupply
mission in partnership with NASA.

Tesla Electric Car
• Was formerly known as Tesla Motors Inc.
• It is an American company who deals with auto motives and energy
• It is based in Palo Alto in California (Tesla.com, 2018)
• Specialization of the company is manufacturing electric cars
• It has a subsidiary SolarCity
• SolarCity deals with the manufacturing of solar panels
• It has several assembly and production plants
• The main manufacturing facility for vehicles is at Tesla Factory which is
located in Fremont in California
• There are different models of Tesla such as Model X, Model S and Model 3
• Tesla also sells other products such as solar panels, Powerpack and
Powerwall batteries, solar roof tiles and other products

Key Leadership Challenges of SpaceX
• The plan of SpaceX is to launch their first mission to Mars
on May 2018 through a robotic test flight which has a
modified Dragon capsule
• For the high end technology that is being used for the
transportations of SpaceX, a high level of fund is required
• Accumulation of the fund is one of the biggest challenges
that is being faced by Elon Musk
• There are several investors who have invested in the
project due to the long term plans and the mission
statement of ambitious nature which have been declared
by Musk
• It becomes a great challenge for Musk to prove those

• If SpaceX fails to adhere to the mission statements and the
promises that have been made by Musk, then his credibility
and his ability to raise any kind of capital in the future will
fail drastically.
• If this happens then SpaceX and Elon Musk would have to
find new sources for generating cash flow for the project of
the company
• Based on the launch prices of SpaceX, there is a huge gap
between the level of cash that can possibly be generated
by the company and the level of cash that the company
needs.

• Due to the funding gap SpaceX has to find other sources from
where they could gather revenue to foot their bill of
multibillion-dollar to develop the BFR
• For this SpaceX has planned to launch around 4425 numbers
of interconnected satellites by the year 2025 so that they are
able to provide broadband internet at a global scale
• However this strategy might be insufficient due to various
reasons which might make it a challenge for Elon Musk and
SpaceX to gather the revenue
• The plan is unrealistic in nature and has the potential to drive
down the market share because of the intense competition,
therefore, has a bigger chance to fail.

Key Leadership Challenges of Tesla
Electric Car
• Tesla produces one of the most advanced electronic cars
• The main challenge that Elon Musk faces is the intense
competition that is present in the electric cars market such
as Ford, FCA and GM
• Tesla does not have as much of funds as compared to its
competitors, hence this is an issue for the leadership of
Elon Musk as it makes it vulnerable in the highly
competitive market (Weick & Jain, 2014)
• The rate at which Tesla is burning their capital every
quarter, it might be hard for them to survive the year 2018

• The lack of funds on the part of Tesla is a big enough
reason for Elon Musk to find ways through which he could
gather funds for the smooth operations of the company
• The high range of technology that is being used by the
electric car company is draining the available resources at
a quick rate
• Musk is at a continuous search for capital raise through
different funding sources
• The available routes and sources for capital has been
closed due to the excess use of funds and resources by the
company

• The production rate of Tesla is also very low as compared to
their competitors and thus has been another major issue
for Musk as he is not being able to supply the promised
numbers of cars into the market (Haugneland & Kvisle,
2013)
• The production takes a lot of time due to the complex
nature of the electric cars
• Their competitors produce a larger quantity of cars as
compared to them and might be the cause for their
downfall in the electric cars market in the coming years

Ways of overcoming the challenge
• Elon Musk can first of all overcome the challenges that are
faced by both his companies with his confidence and
ambition that he has towards growing big
• He has several ideas in his mind which helps him to make
plans that are for the betterment of the companies (Easto,
2017)
• Even though there are many capital and fund issues that
are faced by both the companies, Musk has always been
able to find ways to overcome that particular problem

• Investors rely on the confidence and the plans that are built
by Musk and invest their money in the projects of both
SpaceX and Tesla Electric Cars
• He is able to overcome the small challenges that has come
his way such as failed rockets, broken down cars and
economic collapses

• Despite the failure that is being faced by both the
companies, Elon Musk has held his ground and tried to fight
off the issues with determination and confidence
• The funding that was required by Tesla during their Model S
production was funded by Musk himself by his earning of
PayPal and declaring himself bankrupt so that the company
and their production might not die