Connect with us

Hi, what are you looking for?



Baillie Gifford Manager Talks About Elon Musk, Tesla, & Kodak Moments

A partner in Baillie Gifford, the asset management firm that is the third largest shareholder in Tesla, isn’t worried about Tesla’s future, but it is concerned about the future of many legacy automakers as they approach their own personal “Kodak moments.”

Baillie Gifford is an investment management firm established in 1908 in Edinburgh, Scotland, where it is still headquartered. It currently manages assets valued at nearly $200 billion for its clients. It is also the third largest stockholder in Tesla with more than 13 million shares owned. At today’s prices, its stake in the company is worth about $5 billion. Recently, Nick Thomas, one of the 44 active partners in Baillie Gifford, told the press his firm would be willing to invest more money in Tesla if the need arose.


Elon’s Tweets

Iain McCombie is the partner in charge of the Baillie Gifford Managed Fund. He has had a few things to say about Elon Musk and the future of the auto industry. Unless you live in a cabin in the woods with no internet access, you know that Musk has come under fire for tweeting in August that he was considering taking Tesla private and had already arranged for the financing to make that happen.

The SEC was not amused and sued Musk, claiming his statement had improperly influenced the price of Tesla stock, which Musk hotly denied. Nevertheless, both Musk and Tesla each agreed to pay a $20 million fine to settle the suit, a cost Musk later claimed was “totally worth it.” Asked about Musk and his Twitter activities, McCombie acknowledged they “are a giant distraction.” That’s not an endorsement. “They’re an embarrassment and I wish he wouldn’t do it,” McCombie added, according to a report by Yahoo! Finance.

He then went on to defend Musk, saying, “You might not like Musk, and I’m not condoning what he did, but you can’t deny the fact that he’s done some pretty remarkable things. And that is often what a lot of entrepreneurs are like. They’re eccentric, they’re not everyone’s cup of tea and they challenge conventional wisdom.” He thinks if Henry Ford had access to Twitter, Musk’s tweets “would be pretty mild in comparison.”

The Kodak Moment

McCombie says he thinks traditional car companies are in danger of experiencing “Kodak moments” of their own. He says, “What happened with Kodak is they actually discovered the digital camera but they buried it because it was too frightening for them. They thought it would kill their film business. But the fact that they didn’t innovate killed Kodak.” (Innovation is Tesla’s — and anyone else’s — premier path to success, according to Tesla CEO Elon Musk.)

McCombie finds it astonishing that Tesla is now outselling Mercedes-Benz in the US market. “Now, Daimler’s been in the market for 100-plus years and here’s this upstart and they’re outselling them in the US. If you’d said that a few years ago, you’d probably have been locked up, but that’s happening.”

What Tesla is doing he puts down partially to the “genius of Musk” and partially to the inability of traditional automakers to adapt to changing market circumstances. “They spent hundreds of years building up their know-how in industrial combustion engines and they do a great job with that, but what happens if all of us are suddenly saying ‘oh, I want an electric car’? Suddenly, that know-how is useless,” he says.

“Maybe they are launching electric vehicles, but the bulk of their sales are still coming from legacy products. They’ve built wonderful businesses for themselves, but what happens when the business is changing? That’s why your Tesla is exciting, because they don’t have those legacy issues. We don’t think it’s all about Tesla owning the market — we expect other people to come into the market. But what we’re thinking is the market will expand dramatically.”

There are lots of risks and “we could still be wrong,” McCombie admits. But when a company with $200 billion of assets under management makes pronouncements like this, the odds are the people running it know a thing or two about risk and prudent investing.

Here at CleanTechnica, we have been saying for years that traditional car companies are in danger of going out of business regardless of how many cars they sold last year or in the last decade or even in the last century. Today, there are only two car companies in the US that have never gone bankrupt — Tesla and Ford. If you own a crystal ball, ask it which one company is most likely to be next to implode the way Kodak did. Hint: it starts with an “F.”

I don't like paywalls. You don't like paywalls. Who likes paywalls? Here at CleanTechnica, we implemented a limited paywall for a while, but it always felt wrong — and it was always tough to decide what we should put behind there. In theory, your most exclusive and best content goes behind a paywall. But then fewer people read it! We just don't like paywalls, and so we've decided to ditch ours. Unfortunately, the media business is still a tough, cut-throat business with tiny margins. It's a never-ending Olympic challenge to stay above water or even perhaps — gasp — grow. So ...
If you like what we do and want to support us, please chip in a bit monthly via PayPal or Patreon to help our team do what we do! Thank you!
Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.

Written By

Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. He is proud to be "woke" and doesn't really give a damn why the glass broke. He believes passionately in what Socrates said 3000 years ago: "The secret to change is to focus all of your energy not on fighting the old but on building the new."


You May Also Like

Autonomous Vehicles

Tesla says it is ready to roll out a new update for its Full Self Driving Beta system that will address a recall by...

Clean Transport

Tesla’s stock has been popular this year, and retail investors have been no exception to this fact. With tens of billions spent on Tesla...


Lynk & Co is the #1 best selling car in the overall Dutch auto market.


Tesla officially moved its corporate headquarters from California to Texas in 2021, but in recent weeks, the automaker has debuted another new headquarters in...

Copyright © 2023 CleanTechnica. The content produced by this site is for entertainment purposes only. Opinions and comments published on this site may not be sanctioned by and do not necessarily represent the views of CleanTechnica, its owners, sponsors, affiliates, or subsidiaries.