Biographer Ashlee Vance examines the troubles at Tesla, SpaceX, and SolarCity.
Elon Musk recently took the stage in Guadalajara, Mexico, for the
performance he’s waited a lifetime to give. Sporting a new, oddly
manicured mustache, Musk did his best shy Tony Stark impersonation,
informing a crowd of space enthusiasts that, yes, he does plan to colonize Mars.
Musk’s aerospace company, SpaceX, will send thousands of rockets and
people to the Red Planet—perhaps within the decade and perhaps at a cost
of just $10 billion. Some of the astronauts will die as part of the
experiment. Others will live out their days in ... well, Musk was not
very specific on that.
Musk continues to befuddle planet earth. He’s part techno
messiah—a being sent here from the future to save mankind from
itself—and part charlatan—a slick businessman dragging foolish investors
along on ever grander, cash-burning bets. Every time one of his
companies stumbles, Musk seems to have another spectacular thing to
announce—a new mode of transportation, the space internet, or a Martian
colony—to thrill and confuse. Is Musk trying to distract us from the
troubling aspects of his companies, or are the doubters just the
shortsighted, risk-averse people holding us all back from a fantastic
future?
By any measure, his companies are in trouble. In the spring, a
driver of a Tesla Motors car engaged in autopilot mode crashed and died,
prompting a forensic examination of the technology by both regulators
and consumers. At a more basic level, the automaker quite often
struggles to manufacture cars at expected rates, and Tesla’s proposed
acquisition of SolarCity, Musk’s solar panel company, has been bedeviled
by shareholder lawsuits. Key engineers at Tesla, along with two top
public-relations people, have left. SpaceX just suffered another rocket
explosion that puts the company’s future in a precarious position.
Instead of hunkering down, Musk has (almost impossibly) become more
vocal, taking to Twitter and Tesla’s blog, going after critics with fingers of fury.
In Silicon Valley, Musk is admired, beloved, and idolized, but people
are starting to wonder whether he’s finally taken on too much. If
that’s the case, there’s a disaster scenario coming: Musk has never had
more to lose. Tesla, SpaceX, and SolarCity are no longer experiments. Tesla
and SolarCity are public companies. SpaceX, meanwhile, 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 for
communications, entertainment, and national security. If his companies
were to crater, it wouldn’t merely be an internet playboy blowing his
millions on a whim. Tens of thousands of jobs would be lost, billions in
capital would be wiped out, and technological progress would be
stunted.
There’s precedent
for how Musk deals with the possibility of self-inflicted apocalypse.
In 2008, both Tesla and SpaceX were days away from collapsing
simultaneously. Trying to get Tesla’s first car, the Roadster, up and
running, and launch SpaceX’s rockets safely into space, Musk had plowed
through most of the $200 million he’d earned from EBay’s acquisition of
PayPal. Musk was forced to borrow money from his friends, while the
parents of his then-girlfriend and future wife, Talulah Riley, offered
to remortgage their house to help keep his companies alive. (He didn’t
take them up on it.) At the time, Musk was going through a very public
divorce from his first wife, Justine, and he took a beating from the
media that had once celebrated him.
“He looked like death itself,” Riley recounted in my biography
on Musk. “I remember thinking this guy would have a heart attack and
die. He seemed like a man on the brink.” During this period, Musk
suffered from what might be thought of as industrialist night terrors.
“He was in physical pain,” Riley said. “He would climb up me and start
screaming while still asleep.”
Musk escaped from this dark time like Houdini in a burning
straitjacket. As proper automakers 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 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 Model S 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 had stared
into the abyss and then pulled off perhaps the greatest entrepreneurial
run in history.
It’s through Tesla that we get the most direct insight into the
state of Musk Land today. For too many years, the company has struggled
to fine-tune its manufacturing operations. Time and again, Tesla is
late to market with its new products. It regularly misses sales and
delivery forecasts because of manufacturing delays, and its $100,000
cars continue to have glitches. As these issues persist, Tesla has moved
forward with its expensive battery factory in Nevada, while struggling
to find a way to post a profit. The short sellers that were burned
during Tesla’s great run following the launch of the Model S have
returned in full force; some have declared with certainty that the
company is hurtling toward a grisly demise....MUCH MORE
Tesla, SpaceX, and SolarCity are no longer experiments. Tesla and SolarCity are public companies. SpaceX, meanwhile, 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 for communications, entertainment, and national security. If his companies were to crater, it wouldn’t merely be an internet playboy blowing his millions on a whim. Tens of thousands of jobs would be lost, billions in capital would be wiped out, and technological progress would be stunted.
