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