By John Paul MacDuffie
Mr. MacDuffie is director of the Program on Vehicle and Mobility Innovation at the Wharton School, University of Pennsylvania.
Oct. 1, 2018
Elon Musk’s decision to settle fraud charges against him — by paying a $20 million fine to the Securities and Exchange Commission and agreeing to step down as the chairman of Tesla, the company he co-founded — is the best possible outcome for both investors in Tesla and anyone who cares about the future of electric vehicles.
By giving up the chairmanship for three years, Mr. Musk will have the chance to focus on some of the huge tasks still ahead for the company, particularly raising the financing to meet the company’s looming debts. And the governance measures imposed by the S.E.C. — for new board members, better review of communications and a permanent committee of independent board members to monitor disclosures and conflicts of interest — are exactly what the company needs to prevent another social media-fueled debacle.
His leadership matters well beyond Silicon Valley. Tesla, under Mr. Musk, has been the single most significant force driving the global automotive industry — and the consumers who purchase cars — to take the prospect of a fully electric vehicle future seriously. No other electric vehicle initiative — from Nissan’s Leaf and GM’s Chevrolet Volt and Bolt to the new wave of luxury electric cars being rolled out by German automakers and new companies funded by Chinese billionaires — has achieved the impact on the public’s imagination, brand loyalty or sales success of Tesla. Those initiatives might not even have occurred without the prod of Tesla’s example.