Part 9: IT Giants Dominating the World: Tesla, Elon Musk's Innovation and Controversy

Exploring the Innovations and Challenges of Global IT Leaders through Professor Cho Sung Kap’s "High-Tech Corporate Management Theory"

Professor Cho Sung Kap's latest publication, "High-Tech Corporate Management Theory," provides an in-depth analysis of the strategies employed by the world’s top 10 IT giants, including NVIDIA, Microsoft, and Broadcom, while highlighting their innovative management approaches. Notably, prominent immigrant CEOs are featured, emphasizing the dual strategy of “Know-how” and “Know-where,” supported by the U.S. education system and the “3S spirit” (Servant, Share, Service). This study showcases the prominence of the U.S. in the global IT sector, with 8 out of these 10 major companies headquartered in the country. Korea IT Times has restructured Professor Cho's new book and is publishing it as a summarized series.

This issue focuses on Tesla’s electric vehicle revolution that has shaken the automotive industry worldwide, and the controversial, unconventional moves of Elon Musk at the center of this upheaval, examining how these are interpreted on the global stage.

"High-Tech Corporate Management Theory" reflects Professor Cho Sung Kap's illustrious career at IBM and Harvard Business School and aims to remind readers of the importance of entrepreneurial spirit. It encourages overcoming fears of start-up ventures and pursuing continuous challenges toward one's dreams. -- Ed.

Cho Sung-Kap, Chair Professor at Anyang University, Author of "Management Theory of High-Tech Companies" - Analyzing the Founders and Success Stories of the World's Top 10 IT Companies.

Leading the Electric Vehicle Revolution
Tesla, headquartered in Austin, Texas, has established itself as one of the most innovative companies within the electric vehicle (EV) industry. Founded in 2003 by Martin Eberhard and Marc Toney, the company initially focused heavily on technological development, rapidly rising to become a leader in the EV market. Notably, Elon Musk, a co-founder of PayPal and an early investor in Tesla, became deeply involved in the company's management, catalyzing its exponential growth.

Origins and Founders
Tesla was established with the goal of developing electric vehicles, emphasizing technological innovation from the outset. Historically, the first electric car was invented in 1834 by Scottish entrepreneur Robert Anderson. In 1842, American Thomas Tet and Scottish Robert Davidson built practical and successful electric vehicles, but their commercialization was hindered due to battery charging limitations at the time. The commercialization of EVs began with the invention of the lead-acid battery by French engineer Gaston Planté in 1865.

Later, Martin Eberhard, a Silicon Valley entrepreneur with a personal passion for electric vehicles and environmental sustainability, founded Tesla. His vision was to prove that EVs could outperform traditional internal combustion engine vehicles, adopting lithium-ion battery technology for long-term strategic advantages. Co-founder Marc Toney played a vital role in balancing financial management and technological development, supporting Tesla’s early success.

Elon Musk joined Tesla in 2004 as a major investor. After his success with PayPal, Musk aimed to realize his vision of clean energy and electric transportation through Tesla. He significantly contributed to shaping Tesla’s initial strategies and product development roadmap, with his leadership guiding the company toward innovative, mass-market electric vehicles.

Technological Innovation and R&D
Tesla’s innovation spans multiple areas, most notably its battery technology and electric powertrain strategies. The company maximized lithium-ion battery efficiency, enabling superior driving ranges. The debut of the Tesla Roadster in 2008 was a milestone, as it demonstrated EV potential by offering a sports car capable of traveling 393 km on a single charge.

Following this, Tesla continued to innovate, launching the Model S in 2012. This high-performance electric sedan showcased EV capabilities globally and attracted significant market attention. These technological advancements established Tesla not merely as an automaker but as a technology-driven enterprise.

Business Expansion and Global Influence
Tesla has diversified beyond electric car manufacturing, developing energy solutions such as Megapacks and Powerwalls. Megapacks are large-scale energy storage units capable of supporting projects up to 1 GWh—enough to power approximately five million kilometers of driving per battery pack. These solutions serve various clients, from corporations to governments, notably collaborating with Apple on energy projects.

Powerwalls, on the other hand, are smaller home batteries that store solar energy for residential use—improving energy management and independence.

Tesla also built gigafactories worldwide to bolster manufacturing capacity, including:

Giga Nevada (USA)
Giga New York (USA)
Giga Shanghai (China)
Giga Berlin (Germany)

These facilities produce lithium-ion batteries and automotive components in bulk, addressing global EV demand. Giga Shanghai is particularly significant as Tesla’s first factory outside the U.S., playing a key role in the company’s international expansion and strengthening its market presence in China and Europe. Giga Berlin further consolidates Tesla’s foothold in Europe,

These gigafactories have significantly increased Tesla’s production capacity, enabling the company to meet rising global demand. They have strengthened Tesla’s global electric vehicle market position and enhanced its competitive edge.

Supercharger Network and Infrastructure Expansion
Tesla has worked to lower the barriers to EV adoption by expanding its charging infrastructure. The Supercharger network offers fast charging stations that allow Tesla drivers to recharge quickly, facilitating long-distance travel. Currently, Tesla plans to install 20,000 charging stations and over 60,000 chargers in the United States alone by 2025, with ongoing expansion worldwide.

Recently, Tesla made its charging system patent available to the public, allowing other automakers to access and adopt its charging network. This move aims to set a standard within the EV industry and broaden market adoption. Many manufacturers—such as Hyundai and General Motors—have started adopting Tesla’s North America Charging Standard (NACS), further promoting widespread standardization.

Financial Performance and Market Challenges
Tesla has faced difficulties in maintaining profitability repeatedly but has relied heavily on carbon credit trading as a significant revenue stream. In 2020 alone, Tesla earned about $1.58 billion from such trades, establishing a crucial part of its revenue model. This unconventional approach has contributed to Tesla’s financial sustainability, alongside its core automotive and energy businesses.

However, Tesla faces increasing competition and regulatory hurdles worldwide. The expanding EV market involves many new entrants, forcing Tesla to innovate continually and offer competitive pricing. Additionally, regulatory changes and subsidy policies in various countries could impact Tesla’s business models.

Future Strategies and Growth Opportunities
Tesla plans to pursue multiple growth avenues, especially in emerging markets where EV adoption is just beginning. It aims to expand its renewable energy solutions, including solar power and energy storage. These sectors are seen as central to Tesla’s evolution from an automaker into a comprehensive sustainable energy company.

Leaning on advanced technology and continuous innovation, Tesla intends to establish new industry standards. The company is expanding its product lineup to include semi-trucks and cyber trucks, seeking to satisfy diverse market needs. Its strategy focuses on fostering broader EV adoption and capturing various consumer segments to expand its revenue base. Nonetheless, rising competition and regulatory uncertainties pose ongoing challenges.

To ensure sustainable growth and ongoing innovation, Tesla must maintain technological advancements, develop comprehensive global strategies, and quickly respond to consumer demands.

Musk’s Role in Government: Driver of Innovation or Source of Concern?
The political landscape in the United States is currently at a significant juncture. Under the second term of Donald Trump’s presidency, Elon Musk took on a role leading the Department of Efficiency and Governance (DOGE), a development that has stirred controversy. Musk advocates for policies through this department, voicing strategic positions linked to his businesses, prompting both support and criticism.

Positive Aspects:
Supporters argue that Musk’s leadership of DOGE promotes collaboration between private companies and the public sector. His policies accelerate the adoption of new technologies and environmentally friendly initiatives, such as expanding renewable energy infrastructure, incentivizing clean energy subsidies, and deregulating new technologies, which may enhance global competitiveness and foster future-oriented development. Their impact is seen as fostering a synergistic relationship between government and industry, expediting technological innovation and market expansion for companies like Tesla.

Negative Perspectives:
Conversely, critics point out that organizations led by CEOs like Musk tend to prioritize efficiency, productivity, and profit maximization, sometimes at the expense of broader social interests. Governments, aiming to satisfy diverse citizen needs and maintain international relations, may find such radical approaches problematic. Concerns are raised about whether Musk’s conducted policies, under DOGE, sufficiently ensure public interest and transparency.

Issues such as potential conflicts of interest, excessive corporate influence, or abuse of power are often cited. Critics fear that decisions influenced heavily by personal or corporate interests might distort markets or promote monopolistic practices, ultimately undermining public trust and government integrity. This raises questions about the proper role and responsibility of government in balancing innovation with societal benefit.

Conclusion
Elon Musk’s leadership within DOGE proffers both promising innovation and significant risks. While his policy drive can foster technological progress and efficient governance, unchecked influence risks conflicts of interest, market distortions, and erosion of democratic transparency.
Initially, Musk maintained amicable relations with Trump, receiving positive recognition, but as political pressures mounted, both Musk and Trump appeared to adopt more cautious, restrained stances.

Ultimately, readers should carefully consider the future implications of these policies. It is vital to analyze whether Musk’s leadership can sustainably balance innovation and public accountability without tipping toward overly centralized power or disregarding societal needs.

Continuous monitoring and critical evaluation of such policies are essential for safeguarding public interests and preventing unintended negative consequences. The core issue remains: What direction should our society and nation take? Musk’s role cannot be simply labeled as purely positive or negative, making a balanced perspective the most prudent approach.

Next up: Alphabet.

You can find the Korean version of this article here.

Korea IT Times/Editorial Team 다른기사 보기