Elon Musk continues to befuddle Planet Earth. Every time one of his companies stumbles, the entrepreneur seems to have another spectacular idea to announce — a Martian colony, a space-based internet or an 800-mph transit system — to thrill and confuse. The co-founder of PayPal, Musk is the chief executive of both Tesla, the electric-car pioneer, and SpaceX, which ferries cargo for NASA. He's also chairman of Solar City, the biggest installer of solar panels on homes in the U.S. He is admired and even idolized in Silicon Valley. But there and elsewhere, some are starting to wonder whether he’s finally taken on too much. Is Musk trying to distract us from the troubling aspects of his companies, or are the doubters just the kind of shortsighted, risk-averse people Musk believes are holding us all back from a fantastic future?
By any measure, Musk's companies are under stress. In May, a driver of a Tesla sedan engaged in autopilot mode crashed and died, prompting close scrutiny of the technology by both regulators and consumers. Tesla, which delivered roughly 50,000 cars in 2015 and aims to make 500,000 a year by 2018, is building a massive factory for battery production east of Reno, Nevada, and is working on not just the mass market Model 3 but an electric semi-truck and transit bus. It still struggles, however, to manufacture cars at expected rates. Musk's proposal for Tesla to acquire SolarCity faced criticism and shareholder lawsuits, but was approved by stakeholders of both companies, a win for Musk’s vision of Tesla as one-stop shopping for consumers eager to become independent of fossil fuels. SpaceX suffered a mysterious rocket explosion on the launchpad Sept. 1 that has put the company’s future in a precarious position.
Born in South Africa in 1971, Musk moved to Canada at age 17 before attending the University of Pennsylvania. In 1995, he and his brother Kimbal started Zip2, an online publishing business, and then founded a company that merged with a rival to form PayPal, which was sold to EBay in 2002 for $1.5 billion. Musk plowed his share into new ventures. In 2008, both Tesla and SpaceX were days away from collapsing, and Musk was forced to borrow money from his friends. As General Motors and Chrysler filed for bankruptcy amid a global economic crisis, he convinced investors to put more money in Tesla. Next up, he persuaded NASA to give SpaceX and its still-wobbly rockets a try. After four more years of clever engineering, good luck and sheer force of will, Tesla and SpaceX reached somewhat stable footing. In 2012, Tesla produced the all-electric Model S, a high-performance sedan which even skeptics in Detroit hailed as possibly the best car ever built. SpaceX docked a rocket with the International Space Station and SolarCity went public.
Musk’s current problems are less dire than those he faced in 2008, but Tesla, SpaceX and SolarCity are no longer experiments. Failure now would put thousands of jobs and billions of dollars at risk, and SpaceX has become crucial not just to the U.S. space program but also to countries and companies around the world hoping to put up satellites. Musk's supporters say he has built up enough credibility and has enough star power to raise money with relative ease or to be bailed out by one of his many ultrarich friends who share his aspirations. Just on technological merits, Musk’s companies have already changed the world. To the extent that the electric car is a commercial reality, it’s largely thanks to Tesla. While it receives less attention, SpaceX and the revitalization of the U.S. aerospace industry may be Musk’s most stirring accomplishment. But at every point where his companies seem to be on stable footing, Musk takes on more and promises more, erasing the memory of past gains. The question is whether Musk can continue to operate on the edge of what’s possible — the key to his achievements so far.
The Reference Shelf
- Ashlee Vance's book, “Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future,” chronicles the entrepreneur's rise and struggles.
- The Bloomberg Billionaires page on Musk.
- A Bloomberg video on Musk and Mars, and a National Geographic look at Musk and the “Race to the Red Planet.”
- A documentary, “Revenge of the Electric Car,” includes Musk and several rivals.
First published Nov. 7, 2016
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John O'Neil at email@example.com