1. Tesla shares have soared recently. What has changed at Tesla? Why is Tesla once again
valued more highly than both GM and Ford?
2. What is the vital link between the construction of the Shanghai plant and the ability to
reap economies of scale? Why is the Shanghai plant important in more ways than just
serving the Chinese market?
3. What is the truly difficult balancing act of global strategy that this story illustrates? Here
is a clue from the article: "The struggle to build scale fast enough without going broke is
core to the entrepreneurial experience." Explain! 
 

Transcribed Image Text:

Take Your Victory Lap, Elon Musk -- WSJ 1257 words 4 January 2020 02:32 Dow Jones Institutional News DJDN B2 English Copyright 2020, Dow Jones & Company, Inc. With its Shanghai factory and a new sales record, Tesla is finally meeting its deadlines. That's welcome news for disruptors after a rough year. By John D. Stoll This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 4, 2020). The excitement over Carlos Ghosn's escape to Lebanon from Japan may have obscured an equally impressive feat in the car business. Tesla Inc. is meeting its targets. The electric-car maker said Monday its Shanghai plant is building 1,000 Model 3 sedans a week. That's less than a year after Chief Executive Elon Musk stood in an empty 210-acre field and declared this factory would go up in "record time." And on Friday, Tesla said it set another annual sales record and exceeded Mr. Musk's ambitious goal of selling 360,000 vehicles for the year. This Shanghai production achievement matters to a broader auto industry struggling to go global, succeed in the Chinese market, and go electric. But this latest "gigafactory" and the surpassing of its 2019 sales target also raise an important prospect. If Mr. Musk starts hitting his targets with regularity, Tesla will quickly go from interesting phenomenon to major industry player. Shareholders were feeling good about Tesla even before this week's news. After slumping much of last year amid profitability concerns and Mr. Musk's battles with regulators, shares surged 74% in the fourth quarter. On Friday, they rose as much as 5.5% to hit an all-time high of $454 after the release of the latest sales numbers, which showed that Tesla is now outpacing brands like Porsche, Chrysler and Lincoln and roughly on par with sales of Cadillac. And Tesla's roughly $80 billion market capitalization far exceeds the value of its Detroit rivals. I asked Mr. Musk if he'd be up for doing a victory lap. He demurred because it is "bad karma." I'll take the lap for him: Tesla's win is a win for the disruptor. After a tough year in startup land, Elon Musk -- the patron saint of any entrepreneur looking to make big bucks by questioning the status quo -- has done a mic drop. This follows a year that proved the path ahead for Silicon Valley won't be smooth. We had lackluster initial public offerings of many so-called unicorns (think Uber Technologies Inc., Lyft Inc. or Slack Technologies Inc.), irrational exuberance for WeWork and growing demand that startups stop giving away the store and start generating black ink. Mr. Musk knows well this bumpy road, and that it is navigable. Any analysis of Mr. Musk is incomplete without mentioning his reputation for missing the mark on lofty projections. He's aware of it. When predicting last April that Tesla would have autonomous robotaxis in 2020, he warned his forecast faces this "only criticism -- and it's a fair one -- sometimes I'm not on time." To be even fairer, the broken-promises problem is an auto-industry problem. General Motors Co. has failed to meet electric-vehicle targets; Ford Motor Co. widely missed projections for a Lincoln luxury-brand revival; Volkswagen AG Take Your Victory Lap, Elon Musk -- WSJ 1257 words 4 January 2020 02:32 Dow Jones Institutional News DJDN B2 English Copyright 2020, Dow Jones & Company, Inc. With its Shanghai factory and a new sales record, Tesla is finally meeting its deadlines. That's welcome news for disruptors after a rough year. By John D. Stoll This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 4, 2020). The excitement over Carlos Ghosn's escape to Lebanon from Japan may have obscured an equally impressive feat in the car business. Tesla Inc. is meeting its targets. The electric-car maker said Monday its Shanghai plant is building 1,000 Model 3 sedans a week. That's less than a year after Chief Executive Elon Musk stood in an empty 210-acre field and declared this factory would go up in "record time." And on Friday, Tesla said it set another annual sales record and exceeded Mr. Musk's ambitious goal of selling 360,000 vehicles for the year. This Shanghai production achievement matters to a broader auto industry struggling to go global, succeed in the Chinese market, and go electric. But this latest "gigafactory" and the surpassing of its 2019 sales target also raise an important prospect. If Mr. Musk starts hitting his targets with regularity, Tesla will quickly go from interesting phenomenon to major industry player. Shareholders were feeling good about Tesla even before this week's news. After slumping much of last year amid profitability concerns and Mr. Musk's battles with regulators, shares surged 74% in the fourth quarter. On Friday, they rose as much as 5.5% to hit an all-time high of $454 after the release of the latest sales numbers, which showed that Tesla is now outpacing brands like Porsche, Chrysler and Lincoln and roughly on par with sales of Cadillac. And Tesla's roughly $80 billion market capitalization far exceeds the value of its Detroit rivals. I asked Mr. Musk if he'd be up for doing a victory lap. He demurred because it is "bad karma." I'll take the lap for him: Tesla's win is a win for the disruptor. After a tough year in startup land, Elon Musk -- the patron saint of any entrepreneur looking to make big bucks by questioning the status quo -- has done a mic drop. This follows a year that proved the path ahead for Silicon Valley won't be smooth. We had lackluster initial public offerings of many so-called unicorns (think Uber Technologies Inc., Lyft Inc. or Slack Technologies Inc.), irrational exuberance for WeWork and growing demand that startups stop giving away the store and start generating black ink. Mr. Musk knows well this bumpy road, and that it is navigable. Any analysis of Mr. Musk is incomplete without mentioning his reputation for missing the mark on lofty projections. He's aware of it. When predicting last April that Tesla would have autonomous robotaxis in 2020, he warned his forecast faces this "only criticism -- and it's a fair one -- sometimes I'm not on time." To be even fairer, the broken-promises problem is an auto-industry problem. General Motors Co. has failed to meet electric-vehicle targets; Ford Motor Co. widely missed projections for a Lincoln luxury-brand revival; Volkswagen AG