Elon Musk is charming, energetic, brilliant, eloquent, and idealistic. He was named one of the 100 most influential people in the world by Time Magazine in 2010, and Esquire called him “arguably the most 21st-century entrepreneur on the planet.” He wants to save the world from global warming and pollution by making electric cars that are clean and (eventually) affordable. And just in case that doesn’t work (or in case an asteroid hits the earth or we have a nuclear holocaust), he is building rockets so that human beings can colonize in outer space. He explains with a straight face that he plans to retire on Mars.
This is all heady stuff for a 39-year-old who made a fortune during the dot.com boom, and Musk has as many detractors as he has admirers. A native of Pretoria, South Africa, the boy wonder taught himself to program computers and at age 12 sold the software for a space game called Blastar. When he was 17, in 1988, Musk ran away from home to avoid serving in the South African military during the apartheid era, ending up in his mother’s native Canada, where he worked on a cousin’s Saskatchewan farm, cleaned boilers at a lumber mill, and chain-sawed logs. With a scholarship, he wound up getting degrees in economics and physics from the University of Pennsylvania, then in 1995 went to Stanford for graduate school in applied physics.
He lasted two days at Stanford, dropping out to start Zip2 with his brother Kimbal Musk. In 1999 he sold this business, which helped media outlets post information and advertising online, to AltaVista for $307 million. Musk meanwhile started X.com that eventually morphed into Paypal, which was sold to eBay in 2001 for $1.5 billion in stock. Musk’s 12 percent share came to $180 million.
At that point, most 30-year-old multimillionaires would have retired to their yachts, but Musk decided to save the world instead – making money in the process, he figured. As a college student, he had concluded that there were three important areas he wanted to explore: the Internet, space exploration, and clean energy. Having conquered the Internet, he now turned to the other two problem areas.
In 2002 Musk founded Space Exploration Technologies, or SpaceX, in El Segundo, California (moved to Hawthorne, CA, five years later), proposing to beat NASA at its own game by making and launching his own rockets. In typically grandiose, visionary terms, he explained that “we must expand life beyond this green and blue ball – or go extinct.”
After three failed launch attempts and a great deal of bad press, SpaceX finally launched its kerosene-liquid oxygen powered Falcon 1 into orbit in 2008, the same year that NASA awarded the company a $1.6 billion contract to resupply the International Space Station after the Space Shuttle is retired. In 2010 SpaceX orbited its more powerful Falcon 9 rocket, with plans to launch its Dragon space capsule atop it in the future. Eventually, the Dragon should carry astronauts.
But it is Musk’s attempt to reduce greenhouse gases and climate change that may actually have a more realistic impact. In 2004, he invested heavily in Tesla Motors, a tiny start-up electric car company in Menlo Park, California, and after four years of repeated rounds of money infusion from venture capitalists totaling $145 million, Musk took over as CEO and “product architect” in 2008. That same year, Musk drove off with the first Tesla Roadster production model (a prototype had been publicized two years earlier.)
The all-electric Roadster is a spiffy-looking sports car that goes from zero to 60 miles an hour in less than four seconds and can speed up to 120 miles an hour. Using nearly 7,000 lithium-ion computer laptop batteries hooked up in parallel, the Tesla eats about two cents a mile in electricity, requires little maintenance, and can go over 200 miles per charge. Selling for around $100,000, it is not cheap, but Tesla had sold over 1,000 of the Roadsters by January 2010, to drivers in 25 countries.
Musk bridles at critics who claim that he is only selling toys for the wealthy. He emphasizes that he is funding the upstart company on the high end, targeting “early adopters” who will prove the car’s performance, economy, and durability. Then, with eventual mass production of other vehicles, the price will come down. “New technology in any field takes a few versions to optimize before reaching the mass market,” he observes, “and in this case it is competing with 150 years and trillions of dollars spent on gasoline cars.”
Tesla’s Model S, a family sedan that will carry up to five adults and two children, is projected to cost around $50,000 when it launches, hopefully in 2012. It will go over 300 miles on one charge. Tesla also plans to build an electric mini-van to compete with gas-hogging SUVs and has signed a deal with Toyota to co-produce an electric version of the Toyota RAV4, a seven-passenger vehicle. And Musk hopes eventually to build a subcompact that will cost less than $30,000, around the current average price for a new gasoline-powered automobile.
Apparently it doesn’t bother Elon Musk that he is going up against the Big Car behemoths. Instead, he wants to show them the way and push them towards making their own all-electric vehicles. Indeed, he says he would never have invested in Tesla if General Motors had not killed its EV1 car in 2003. He cites the documentary Who Killed the Electric Car? that showed how GM snatched the EV1 from enthusiastic owners who had leased them (they were never sold) and crushed them. GM executives insisted that there was not a sufficient market for the cars, but many critics thought they just didn’t want to cut into their own gas-fueled vehicle sales.
Musk was undoubtedly gratified when GM executive Robert Lutz credited the Tesla Roadster with inspiring him to push for the development of the Chevrolet Volt, a gas-electric hybrid due out in 2011. “All the geniuses here at General Motors kept saying lithium-ion technology is ten years away, and Toyota agreed with us,” Lutz said. “Then boom! Along comes Tesla. So I said, ‘How come some tiny little California startup, run by guys who know nothing about the car business, can do this, and we can’t?’ “
Yet Musk is not impressed with hybrids, which still rely on fossil fuels. He regards them as a temporary interim step to real electric vehicles. And he goes beyond that, logically worrying about the carbon footprint of the electricity used for his cars. That’s why in 2006 he helped his cousins Peter and Lyndon Rive start SolarCity and invested $10 million in the company. Based in Foster City, California, SolarCity sells and installs photovoltaic cells from different firms through a solar lease option that can reduce or eliminate the cost of installing the solar panels, while allowing homeowners to pay less per month than they would pay the electric company. Not coincidentally, the firm also offers solar cells to charge electric cars and has entered a partnership to offer free charging to any Tesla vehicle owners driving between San Francisco and Los Angeles. Musk observes that he can drive his Tesla Roadster and, through recharging it with solar energy, he can actually have a net positive impact on carbon emissions by having extra power to sell back to the electric grid.
Only time will tell whether Elon Musk goes down in history as an inspired but failed visionary, or whether his companies will make him an incredibly wealthy man while helping to solve the massive problems of climate change and oil depletion. At the moment, that is anyone’s guess. In large part because of Tesla’s example, the big car companies are rushing to compete with their own electric cars, and they have the clout to do so quickly and well. The all-electric Nissan Leaf, due out at the end of 2010, will carry five people up to 100 miles on one charge and will cost only $33,000 in the United States. Minus the federal $7,500 tax incentive, it will actually cost $25,500. The Mitsubishi MiEV, which drives up to 80 miles on a charge and holds 4 people, is already available in Japan and is slated to debut in the USA in 2011 for $30,000. BMW began field-testing its two-person Mini E through a small lease program in 2009.
In other words, the field of electric cars is small but growing quickly. Elon Musk should be happy, because his Tesla Motors clearly inspired the following mob. “I didn’t put so much time and effort and money into helping create Tesla because I thought it was going to yield the highest risk-adjusted return and be the most fun thing I could do,” Musk says. “I think it’s very important that we accelerate our transition to a sustainable energy economy, and I think electric cars are the transportation part of that solution. And if I left it up to the traditional car business it’s not going to happen fast enough.”
Because of his example and active aid – Tesla sells its powertrain technology to other automotive manufacturers (such as Toyota for its RAV4) to cut their development time – Tesla motors is going to be facing competition from the bigger auto firms in the coming years. Meanwhile, he admits that he has run through most of his personal cash hoard. In 2008, he began going through a messy divorce from Justine Musk, a Canadian fantasy novelist and the mother of his five children – all boys, twins and triplets under the age of seven. He struggles to be a good father while working 100 hour weeks. And he has had internal problems galore with Tesla Motors, including industrial espionage, mismanagement, and bickering over who can be called a true founder of the company. Tesla went public in late June 2010, but following a quick surge after the Initial Public Offering, the stock sank back and hasn’t done much since.
But don’t think that Elon Musk is down for the count. He’s a larger-than-life figure whose seemingly impossible schemes keep coming true. He served as the model for Tony Stark, the fictional hero of the Iron Man movies, and with his looks and charismatic presence, Musk could end up in the movies himself if he so chose. In fact, he was executive producer of Puzzled, his sister Tosca Musk’s first movie. He’s engaged to gorgeous, brainy young British actress Talulah Riley, who volunteers at the Cal Tech Physics Department when she isn’t starring in movies like Inception.
It is possible that Musk will sell Tesla to a big automaker once it is clear that electric cars have been established as the vehicles for the 21st century. “Tesla’s really not about starting a car company,” he has said. “It’s really about accelerating the transition to a new phase of technology in the car business.” If he does sell Tesla, he will undoubtedly take the money and run – straight to another seemingly impossible project to help save the world. As he has explained: “Because you only live once, you may as well work on things that are going to have an important effect.”
Introductory Snapshot: The Boy Wonder and His Roadster. 2006: Multi-millionaire Elon Musk unveiling the prototype of the Tesla Roadster. Glammer, gliltz, hype, and excitement.
Chapter 1: Under Siege. December 2010: Elon Musk is divorced, broke, the media and business analysts skeptical. But he remains defiant, self-confident, sure that Tesla Motors will succeed and that SpaceX will eventually help to establish a colony on Mars. (In other words, this chapter is set in the troubled present, and the rest of the book will be a flashback leading back up to the present.)
Chapter 2: The Boy From Pretoria.
Chapter 3: Canadian Lumberjack
Chapter 4: Physics Wonk (and marriage)
Chapter 5: Dot. Com Genius
Chapter 6: Rocket Man
Chapter 7: The Electric Car of the Future, Now
Chapter 8: Golden Boy (All apparently going well, circa 2006-2009)
Chapter 9: Skeptics, Ex-Wives, and Going Broke
Chapter 10: Musk at 40-plus, Earth at 4 billion-plus (what next, etc.)
Note: This book could be written in a year. It would help considerably if Musk cooperated, but that is not necessary for the book to be compelling, since I could interview many people who have worked with him, critics, auto, aerospace, and solar energy commentators, etc.