Elon Musk, the geek tycoon

He’s selling electric cars and space shots while battling his ex and the press

by Jonathon Gatehouse

Elon Musk is used to making headlines. In fact, he seems to relish them. In late May, the 39-year-old Silicon Valley entrepreneur stood alongside Gov. Arnold Schwarzenegger and Toyota Motors CEO Akio Toyoda and inked a deal to purchase a mothballed California auto plant for Tesla, his electric sports car company.

Two weeks later, he was in Florida, watching a Falcon 9 rocket, made by another one of his firms, SpaceX, blast off on its maiden voyage to orbit, and a potentially lucrative future hauling freight and astronauts to the International Space Station. On June 29, he and his 24-year-old fiancée, British actress Talulah Riley, toothily rang the bell to open trading on the New York Stock Exchange, as Tesla became the first automobile maker to go public in the U.S. since Ford in 1956.

Small wonder that director Jon Favreau and his star Robert Downey Jr. have hailed Musk—a dot-com millionaire by his mid-20s, philanthropist, and occasional Hollywood producer to boot—as the real-life inspiration for their portrayal of swashbuckling high-tech tycoon Tony Stark in the Iron Man movies. (“A Renaissance man in an era that needs them,” says Favreau, who gave Musk a cameo playing himself in the latest film.) But the guy who used to tool around Palo Alto in a $1.5-million (all figures U.S. dollars) gull-winged McLaren F1—only 64 ever made, top speed 372 km/h—is finding the spotlight a little too bright lately, thanks to a divorce battle, pesky reporters, and a novelist ex with her own blog and a full commitment to the life examined.

“Given the choice, I’d rather stick a fork in my hand than write about my personal life. Unfortunately, it seems that I don’t have any other option,” Musk wrote in an open letter on the Huffington Post website earlier this month. “Several awful things have been widely reported that are simply false, but a falsehood uncorrected may as well be the truth.”

The lengthy rant took the New York Times to task for suggesting he “ran off with an actress,” leaving his wife of eight years and five young boys behind. (Musk shares custody of the twins and triplets conceived through in vitro fertilization. And says he met Riley, who now studies astrophysics in her spare time, and wears an amethyst and diamond ring the “size of Cape Canaveral,” according to one British paper, in a London club a couple of weeks after his 2008 separation.) It also attacks a writer for VentureBeat, a high-tech website that has been critical of Tesla, as “Silicon Valley’s Jayson Blair.” The majority of the exegesis, however, was dedicated to the theme that his ex, Justine Musk—or Jennifer Wilson as she was known in her hometown of Peterborough, Ont.—is trying to take him to the cleaners. “The legal and accounting bills for the divorce total four million dollars so far,” wrote Musk. “Apart from the $170k average monthly legal bill, the rest of my living expenses are mostly nanny salaries and supporting Justine’s household.” A contribution, he says, that includes $20,000 a month for clothing, shoes and other “discretionary items.”

While Musk remains a very rich man on paper—his shares in the car company alone are estimated to be worth more than $500 million—he claims his current fiscal reality is far different. After Tesla, which has experienced its share of production delays and has never turned a profit, nearly went bankrupt in late 2007, he plunged virtually all his money into the firm. And as the legal costs for the divorce mounted (under California law he is paying his ex’s bills, too), he has been forced to take emergency loans from friends to make ends meet. “Relative to others with a similar net worth, I don’t spend much money on personal matters. I own no homes (not even my residence at this point), yachts, or expensive artwork. My clothes are mostly jeans and T-shirts and I almost never take vacations, apart from kid-related travel,” Musk wrote.

Justine, who has penned three post-apocalyptic, vampire-fantasy books—Lord of Bones, the most recent, ranks 442,980 on Amazon’s bestseller list—fired back with a post on her blog Love, Soul and Vision: Notes from a novelist’s life in L.A. “What I thought was interesting . . . was how he, unwittingly or not, invoked the age-old ‘madonna-whore’ complex,” the 37-year-old wrote. “By saying that he is ‘correcting the record’ about our divorce, by putting himself forward as the final and real authority on the situation, he is also defining a certain kind of reality in which his fiancée and I get slotted into our ‘proper’ places. And I must roll my eyes.” Far from a gold digger, she says she only wants a fair settlement from an ex who “works like a demon and deserves his success and his wealth.”

It’s an odd denouement for the pair who met as Queen’s undergrads. Elon, who was born in South Africa, emigrated to Canada at age 17 in 1989—his mother is originally from Regina—to avoid compulsory service in the then-apartheid state’s military. After working on a cousin’s grain farm near Swift Current, Sask., then in a B.C. sawmill cleaning out boilers, he chose a university in a time-honoured male fashion. “I visited Waterloo and there just weren’t a lot of girls. I figured there were a lot of chicks at Queen’s, so I’m going there,” Musk told the Toronto Star in 2009.

Elon transferred to the University of Pennsylvania in Philadelphia after second year, to pursue degrees in business and physics, but the relationship continued. When he moved on to Stanford in 1995, for his grad work—dropping out after two days and forming Zip2, a Web company that was sold four years later to AltaVista for more than $300 million—Justine came too, sharing an apartment that doubled as staff flophouse and corporate headquarters. The pair married in 2000, shortly after Elon founded X.com, a company that became PayPal, and was acquired by Ebay in a $1.5-billion stock swap in 2002. (Musk pocketed more than $170 million in the two deals.)

The current court battle is over a “post-nup” agreement Justine signed six weeks after their wedding. In the event of divorce, it limited her share of the marital assets to $20 million—half in the form of a house, and half in support payments. On her blog, the writer has suggested she was duped into signing the “harsh” deal, and listed her demands: the Bel Air house, alimony and child support, $6 million cash, 10 per cent of his stock in Tesla, five per cent of his stock in SpaceX, and one of the car company’s “awesome” $100,000 electric roadsters. “Is this what I deserve? I don’t know. Who exactly deserves that kind of wealth?” she writes. “But based on our life and history together, is that reasonable? I think so. And I want to do good things with it (and bring my parents down from Canada, so they can live near their grandchildren).”

Justine acknowledges that the marriage had been in trouble for a while, suggesting her voracious reading habits may have been part of the problem. But she maintains the divorce was Elon’s idea alone. They had completed just three counselling sessions when he cut off her credit cards, and according to her version, had someone else tell her their life together was finished.

Musk has always been a man in a hurry. A workaholic, he regularly turns in 100-hour weeks, relying on his private jet for the commute between corporate gigs. More than an investor or boss, he likes to be involved in every aspect of design. (At SpaceX he is CEO and chief technology officer; at Tesla, CEO and product engineer.) “I’ve found that being an outsider helps,” he once said. “When people have been doing things the same way for years, they stop questioning their methods even if they defy common sense.”

At Tesla he has aggressively pushed a strategy of courting a customer base of elite, early-adopters with the high-performance and high-cost roadster. (Brad Pitt, Leonardo DiCaprio and George Clooney are among the 1,100 people worldwide who own an electric vehicle that can go from zero to 60 in under four seconds.) A luxury Model S sedan, priced at $57,000, is scheduled to launch in 2012, with production ramping up to 20,000 vehicles a year. The mass market will have to wait for Tesla’s third-generation compact.

SpaceX’s goal is similarly audacious: to build a relatively cheap, fully reusable rocket that will bring the cost of a space launch down into the tens of millions versus the $450 million spent each time the shuttle lifts off. The firm already has $2.5 billion in contracts, including a $1.6-billion deal with NASA for a minimum 12 flights to the space station, starting in 2012. And Musk, whose interests tend toward transformative technologies, has already waxed poetic about the next step—colonies on Mars and beyond. “I want to make humanity a spacefaring civilization,” he said a few years ago.

Like many visionaries, he isn’t noted for his patience or tact. Martin Eberhard, one of the co-founders of Tesla, sued him for slander, libel and breach of contract after he was removed as CEO in 2007. (The suit settled out of court last year.) Even friends admit Musk can be prickly. “I know him to be a person of extremely high character and integrity who is committed to achieving his final objective with a drive and a passion unlike any I have ever seen,” Greg Kouri, a former business partner, wrote recently in an online forum. “The downside of this type of personality is that his determination can create challenges for some of the people who work with him, and eventually fallout will be inevitable.” The more important thing, argues Kouri, is that everyone who has ever invested with Elon has ended up making money.

Right now, notwithstanding his poverty claims, that includes the entrepreneur himself. Last month’s IPO netted Tesla $226 million and Musk as much as $24 million when he put close to a million of his shares on the block. Negotiations for a divorce settlement continue, although not entirely amicably. “In attempting to maximize the financial outcome of those discussions, [Justine] has applied every possible legal and public relations pressure tactic,” he complained in his Huffington Post rant. Musk and Riley—recently featured in the U.K. Esquire in her knickers and currently starring in Inception—will marry next year. “I never really thought the word genius could be applied to anyone before I met Elon, but I really believe that is what he is,” she says. “If you watch his face, you can see his brain working.” (Justine also has a new love, the head of a green charity she refers to only as “The Dude” on her blog.)

Last week, Tesla made two major splashes. First, the company announced the hiring of George Blankenship, the brains behind Apple’s retail stores, to create stylish, inviting and evangelical auto showrooms for its products. (Customers in Tokyo, Toronto and Washington will be the guinea pigs.) Soon after, the carmaker formalized a deal with Toyota to produce a battery-powered version of their popular RAV4 sports ute, starting in 2012. Elon Musk was back in the news. This time, just the way he likes it.




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