Elon Musk says he wants to be generous with his critics. But after years of battling an army of doubters in the rest of the auto industry and on Wall Street, the Tesla chief executive’s frustration is hard to contain.
It is almost a decade since his company’s Model S proved that electric cars could compete with the best on style and performance, and four years since its Model 3 brought the technology to a wider market. Over those years, Musk has not only had to build a market for electric vehicles almost single-handedly while fighting off bankruptcy, he has also waged a running battle with short sellers on Wall Street and started spats with regulators.
This year has brought a measure of vindication, as companies ranging from Ford to Volkswagen to Mercedes-Benz have unequivocally committed their futures to electric vehicles. Toyota became the latest on Tuesday, announcing a $35bn investment into building EVs.
“For a long time, the rest of the auto industry was basically calling Tesla and me fools and frauds,” Musk says in an interview with the Financial Times. “They were saying electric cars wouldn’t work, you can’t achieve the range and performance. And even if you did that, nobody would buy them.”
Musk believes climate change activists helped to nudge carmakers towards more sustainable technology. But he claims there is one overriding reason they are finally ready to go electric: “Until we started taking market share from them in a meaningful way, they didn’t react.”
He is far from alone in that view. Bob Lutz, a former vice-chair of General Motors and president of Chrysler who was once doubtful about Tesla’s chances of survival, now calls Musk’s impact on the auto industry “unbelievable — nothing short of incredible”. Pointing to the inroads it has made even in Europe’s luxury car markets, Lutz says: “This is why Mercedes-Benz and BMW are so afraid of him.”
Elon Musk has been everywhere this year — and not only in ways that mark him out as one of the most consequential if controversial business figures of recent times.
Armed with 66.3m followers, he has used his hyperactive Twitter account to promote dogecoin, a cryptocurrency that initially started as a joke and whose name is a homage to an internet meme featuring a Shiba Inu dog. He has also continued his goading of regulators, including the SEC, despite paying a $20m fine in 2018 after the securities regulator accused him of committing securities fraud with his tweets.
Although almost 800,000 Americans have died of the virus, Musk, who turned 50 this year, has spent the pandemic sniping at Covid restrictions — and at the politicians who have accused him of not paying enough tax.
Dogecoin is the people’s crypto
— Elon Musk (@elonmusk) February 4, 2021
Even some of his biggest supporters acknowledge a whiff of hype around Tesla. In the midst of a stock market boom, its valuation smashed through the £1tn barrier this year, making Musk the world’s richest person — despite shipping fewer than 2 per cent of the world’s new cars and trucks.
Yet behind the noise, the speculative frenzy and the apparent flouting of rules, there is an achievement of great substance. The FT is naming Elon Musk its Person of the Year because he has triggered a historic shift in the world’s auto industry towards electric vehicles. Even if Tesla were to somehow collapse next year — something that, unlike two years ago, no one is now predicting — Musk would have transformed one of the world’s most important industries in ways that could have profound implications for governments, investors — and for the climate.
In an era often defined by new technology, Musk is staking a claim to be the most genuinely innovative entrepreneur of his generation.
The results of Musk’s unusual brand of risk-taking and boundary-pushing have not been limited to cars. His private space company, SpaceX, brought human space flight back to US soil last year for the first time since the Space Shuttle. Its Starlink network is closing in on the launch of the world’s first commercial satellite broadband service, and a giant new rocket that could change the economics of getting to orbit, dubbed Starship, is awaiting its first test launch.
Musk can sometimes sound tongue-tied and stumble over ideas, before throwing out sweeping pronouncements — often about the future and about how technology will reshape it. His declarations are presented as brazen statements of fact, as though daring the listener to challenge him. To admirers, it makes him a visionary unbound by the mental constraints that limit other business people. But to critics, he embodies a blinkered technocratic arrogance that blithely disregards its impact on the world.
So does Musk think the stated goal he set for Tesla more than 15 years ago, to lead a transport revolution, has finally been achieved? “I’m quite encouraged by at least what they [other carmakers] are saying. At least we have the talk.
“We did Tesla essentially out of desperation, not because we thought it would be lucrative, but just to show that it could be done,” he adds.
Maybe so — but it has had spectacular financial results. After struggling for years to prove it could be financially viable, Tesla’s profit margins have turned out to be surprisingly robust, and plenty of investors have been willing to bet that it will lead a big new global industry of electric, autonomous vehicles.
At a time when technologists and billionaires have become objects of growing populist mistrust, Musk has plenty of critics, but still enjoys a higher level of public approval than many. That may partly be because his personal brand has become so intertwined with a popular culture influenced by memes and gaming. Musk thinks it is because of the aspirations that his products aim to satisfy.
“I’m just trying to get people to Mars, and enable freedom of information with Starlink, accelerate sustainable technology with Tesla, free people from the drudgery of driving,” he says. “It’s certainly possible that the road to hell to some degree is paved with good intentions — but the road to hell is mostly paved with bad intentions.”
‘Are you not entertained?’
His pushing of boundaries and courting of controversy have landed him in trouble. Tesla is under investigation by US transport and securities regulators, into the safety of its driver-assistance technology and whether it hid fire risks from its solar panels. Musk’s outspokenness on Twitter brought one regulatory complaint that forced him to give up his chairmanship of Tesla, while his trolling of critics and taunting of regulators have worn the patience even of many of his admirers.
At times, while hurling insults from the safety of his Twitter account, Musk can seem petty and vindictive. The nadir came in 2018 when he dismissed a critic as “pedo guy”, leading to a damages claim and a four-hour court appearance to argue that hadn’t intended a literal accusation of paedophilia.
“He’s like President Trump — he did a lot of good things, but he should have kept his mouth shut and stayed off Twitter,” says Lutz.
Asked why he publicly goads regulators, Musk hits out at what he claims has been a failure by the US Securities and Exchange Commission to protect investors from short sellers. Of the National Transportation Safety Board, he says: “I felt they pursued press headlines over real safety. That’s obviously [something] I do not respect, nor should be respected.” But he denies any disdain for regulation itself.
SEC, three letter acronym, middle word is Elon’s
— Elon Musk (@elonmusk) July 2, 2020
“It’s certainly possible for some asshole to compile the handful of times that I’ve disagreed with regulations, write a story and make it sound as though I’m some, like, madman shooting from the hip.” He adds: “At no point am I suggesting that any regulatory agency be disbanded, or anything like that. I’m not some sort of mad-cap libertarian.”
So is Musk’s bad-boy Twitter persona part of some elaborate marketing plan, a case of letting off steam, or a display of unrestrained id? He laughs at the question. Borrowing a line from the movie Gladiator, he asks: “I mean, are you not entertained?” before adding: “I’m not saying I don’t make foolish tweets, of course I do. There are times when I shoot myself in the foot. But you know, on balance, it’s entertaining and interesting, informative, whatever.”
One result of Musk’s antics has been to make Tesla a well-known brand without a single dollar spent on advertising, says Simon Sproule, a former head of marketing and communications at the company. “He’s torn up the rule book for how CEOs are meant to behave”, in the process becoming almost a counterculture figure and reaching people who would normally have no interest in cars or space, he adds.
An engineer at heart
Musk’s impact on the global auto industry has been a long time coming. After an early success as one of the founders of PayPal, the South African-born serial entrepreneur first invested in Tesla and became its chair in 2004, soon after it was set up.
Before Tesla, Lutz says GM’s engineers steadfastly refused to even believe that the kind of lithium ion batteries used in laptop computers could produce enough power to drive a car. Tesla’s first car, the Roadster, was enough to finally persuade them, he adds, leading directly to the Chevrolet Volt hybrid a decade ago. But GM didn’t follow through.
Daimler and Toyota also seemed to catch an early glimpse of the electric future that was dawning, partnering with Tesla just ahead of its 2010 stock market listing to use its electric drivetrain technology while providing much-needed injections of cash. The alliances did not last.
“They were not taking electric vehicles seriously and it just became clear that they just wanted to do the…
Read More: FT Person of the Year: Elon Musk