Newsmakers 2013: Elon Musk

The unlikely story of the man behind the Tesla Model S and the Hyperloop

by Chris Sorensen

Getty Images / CP

Elon Musk is a rare breed of Silicon Valley entrepreneur. Most of his contemporaries seek to improve some small corner of the world—finding better ways to shop, watch TV or share photos on the web. Musk, on the other hand, took the fortune he made as a PayPal co-founder and zeroed in on some of humanity’s biggest, most intractable problems: our overreliance on non-renewable fossil fuels and the lack of a Plan B should anything—meteorite strike, climate change—render Earth uninhabitable. Equally impressive is Musk’s knack for turning grandiose ideas into viable businesses like electric car manufacturer Tesla Motors and space transport firm SpaceX. In fact, entrepreneur may no longer be the right word to define the boyish-looking 42-year-old. He’s an industrialist for the 21st century.

Musk made his critics eat crow when Tesla reported its first-ever quarterly profit in May of this year. The following day Consumer Reports awarded Tesla’s electric Model S with its highest test score ever and, last month, it handed the Model S a coveted “recommended” rating. Buoyed by the accolades, Tesla plans to deliver 21,500 of its Model S sedans in 2013, proving that electric cars—at least ones made by Tesla—are no longer toys for tree-hugging Hollywood celebrities. There are also plans for an SUV variant, a compact car and, possibly, a pickup truck. Investors have finally decided to come along for the ride, too. The company’s stock began the year trading around $35 a share. It’s now worth $121.

There have, of course, been hiccups along the way. Tesla nearly went bankrupt in 2008. Five years later, it’s facing a fresh round of scrutiny following three Model S fires—although Musk hardly seems worried. Two of the fires occurred in Model S’s that ran over metal debris on the road, piercing the thick armour plating that protects the car’s giant lithium-ion battery pack (neither driver was harmed). The third was a high-speed accident in Mexico where a speeding Model S smashed through a roundabout, hit a concrete wall and then skidded wheelless into a tree. “The amazing thing is that he lived,” Musk recently told Business Insider editor Henry Blodget during an onstage interview, “not that there was a little fire in the front of the car.”

Musk went on to cite statistics that back up the Model S’s safety record. There were nearly 200,000 fires on American roads last year, or about one fire for every 1,350 vehicles. The rate for Tesla? One for every 6,330, or about five times fewer. “If fire is your concern, you could not be in a safer car,” Musk said.

It’s difficult to overstate how unlikely the Tesla story is. The auto industry, and the oil companies that feed it, are the very definition of entrenched big business. Launching a new car company is a feat in itself, never mind thumbing your nose at the internal combustion engine, a transportation mainstay for the past 100 years. Nor are electric vehicles the only project on Musk’s plate. In 2010, SpaceX became the first private company to send—and return— a spacecraft into low Earth orbit. In May 2012 it became the first private firm to dock with the International Space Station and supply it with cargo. Now it’s working on a reusable launch vehicle after conducting several successful tests of its vertical takeoff-and-landing Grasshopper rocket. Musk has even talked about using all this know-how to spearhead an eventual manned mission to Mars, arguing for the need to start the process of colonizing other planets in case Earth faces an “extinction event.”

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Amid all of this, he somehow managed to find time to propose a new form of mass transit. In August, he unveiled drawings and a 57-page discussion paper for a near-supersonic form of travel he dubbed the Hyperloop. Musk claimed that capsules, riding on a cushion of air in a vacuum-like tube, could travel between San Francisco and Los Angeles in just 30 minutes. He invited others to build upon his concept, calling it an “alpha” version, but said if no one takes up the challenge, he may build a Hyperloop prototype himself.

Musk also let slip in a recent interview his desire to build an electric plane capable of supersonic speeds and vertical takeoffs and landings. And he showed off new software tools that allow engineers to design rocket parts using 3D images and motion controls. The idea, Musk says, is to speed up development of complicated machinery like rocket parts by eliminating the need to design them with 2D instruments like a keyboard and a mouse. It’s not unlike the hologram-like interface that the Tony Stark character uses in the Ironman movies, a character that was actually modelled on Musk.

So what drives him? Musk told the New York Times Dealbook conference he can’t bear the thought of a future no better than the past. He couldn’t believe it when the world’s first supersonic airplane, the Concorde, was scrapped after a single accident in 2000. It similarly seemed like a step backward when California proposed spending $68 billion on a high-speed rail project that would be slower and more expensive than those in other countries, prompting him to come up with the Hyperloop. It’s a safe bet that much of what goes on at SpaceX is driven by Musk’s profound disappointment that astronauts haven’t ventured further than orbiting the Earth since 1972, the year after he was born.

Musk has been heralded as potentially “the greatest inventor of our time.” But he’s already shaping up to be so much more.




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Newsmakers 2013: Elon Musk

  1. I saw my first Tesla during the 2009 World Solar Challenge across the Australia. I had no doubt that Musk had a winner, the Tesla is plain sexy and the performance possible with an electric motor is amazing.

    • And if 2 cars set out towards Winnipeg from Edmonton on Dec. 23, one being a Tesla and the other being a 2002 Civic, only one of those two cars would arrive in time for Christmas, and it wouldn’t be the Tesla.
      Musk may be a visionary, but the simple fact remains that electric cars will long continue to be a very tiny niche market for a multitude of reasons. Keep this in mind: Tesla still loses money- lots of it- on every car it sells. The only profits come from the various “green energy” tax schemes, many of which will expire in 2014.
      The bottom line is that, in spite of everything, electric cars don’t perform all that much better than they did decades ago.

      • Yes, sure they are loosing money. As stated in article they are not for making money, they have something more importand to do and money/bussiness is just tool to pursue final goal, so every time they will have some surplus, they will invest it. They are not rentiers – quite oposite.

        • Losing money means they will eventually be out of money, even if that money belongs to other people, and those other people didn’t invest in Tesla Motors for the purpose of it being sent down the memory hole.
          The bottom line here is that there remains an extremely wide gap between the utility of a any electric car on the market, and any far less expensive conventionally powered one. Even hybrids have a difficult time competing on a dollar-for-dollar basis. You can drive a lot of miles on the price difference between a 42 mpg hybrid and a 38 mpg gas/diesel internal combustion car of the same size. If the break even point for return on end-user investment is more than 4 years down the road, the benefits of a hybrid over a gas engine are purely hypothetical for most users.
          Going back to the original point, though, you can’t escape the fact that Tesla has to be able to build the cars and sell them at a profit. The tax credits will dry up (Setting aside the question of why we should be providing four and five figure tax credits for the purchase of $100,000 luxury cars. Hmm. Taking tax dollars from the middle class in order to make halo cars for upper crust liberals more affordable? Yeah. That’s judicious use of tax dollars.) which will force the manufacturer to build towards an actual market value, or raise prices substantially in order to make money, and hope that they can retain enough sales to actually make money.
          Without profits, the company has no future.

  2. Interesting that he named it ‘Tesla’….because we won’t pay any more attention to Elon Musk than we did to Nikola.

    Until of course the ‘knowledge economy’ is the only hope left.

    • Grumpy today? Nikola Tesla actually had a pretty good (& famous) run at life. He lived the high life in New York, he got a unit named after him (every nerds dream!). There are plenty of bitter science types about, but Tesla was not one of them. In what I have read, he comes across like a scientist William Shatner. Tesla was aware some laughed at his mad scientist ways, but was largely having too much fun to care.

      Of course, the knowledge economy is the only hope left and has been for quite a while. To cheer yourself up, you might re-read Well’s accounts of that crazy man, Lazaridis and the way he is embarrassing himself with all sorts of quantum investment stuff. Personally, I always find it amusing when some know-it-all anonymous critic jumps on technical forums to declare how stupid & incompetent visionaries like Lazaridis & Musk are. LOL, if I could only achieve such stupidity and incompetence perhaps I could change the world and get rich doing it as well.

      • Tesla was robbed by Edison, and died in utter poverty.

        http://en.wikipedia.org/wiki/Nikola_Tesla

        I have no idea what the rest of your statements mean, but you’ve been a regular on here too long to make them.

      • What are you talking about? Every project Tesla made got destroyed. He had two laboratories/towers destroyed. One was because it was thought to be possibly used by spies during the war. He died in absolute poverty by the way, besides for his hotel room (given to him out of goodwill). He was cheated by Edison on his redesigns of DC also.

  3. Let’s not forget the genius inventor Nikola TESLA, who’s name was bestowed upon the electric auto of Elon Musk. That was done with good reason. Most folks likely don’t know that N. Tesla was the inventor of alternating current, which we can’t live without these days. Thomas Edison was the inventor and promoter of direct current. But, in our North American education system, it’s Tesla’s arch enemy, Edison, who gets his name in lights. Let’s ponder that for awhile.

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