Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future

Iron Man
thing in which he’s presented as a
cartoonish businessman—this very unusual animal at the zoo. But there is now a degree to which you have
to ask whether his success is an indictment on the rest of us who have been working on much more
incremental things. To the extent that the world still doubts Elon, I think it’s a reflection on the insanity of
the world and not on the supposed insanity of Elon.”
SolarCity, like the rest of Musk’s ventures, did not represent a business opportunity so much as it

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represented a worldview. Musk had decided long ago—in his very rational manner—that solar made
sense. Enough solar energy hits the Earth’s surface in about an hour to equal a year’s worth of worldwide
energy consumption from all sources put together.
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Improvements in the efficiency of solar panels have
been happening at a steady clip. If solar is destined to be mankind’s preferred energy source in the future,
then this future ought to be brought about as quickly as possible.
Starting in 2014, SolarCity began to make the full extent of its ambitions more obvious. First, the
company began selling energy storage systems. These units were built through a partnership with Tesla
Motors. Battery packs were manufactured at the Tesla factory and stacked inside refrigerator-sized metal
cases. Businesses and consumers could purchase these storage systems to augment their solar panel
arrays. Once they were charged up, the battery units could be used to help large customers get through the
night or during unexpected outages. Customers could also pull from the batteries instead of the grid during
peak energy use periods, when utilities tend to tack on extra charges. While SolarCity rolled the storage
units out in a modest, experimental fashion, the company expects most of its customers to buy the systems
in the years ahead to smooth out the solar experience and help people and businesses leave the electrical
grid altogether.
Then, in June 2014, SolarCity acquired a solar cell maker called Silevo for $200 million. This deal
marked a huge shift in strategy. SolarCity would no longer buy its solar panels. It would make them at a
factory in New York State. Silevo’s cells were said to be 18.5 percent efficient at turning light into
energy, compared to 14.5 percent for most cells, and the expectations were that the company could reach
24 percent efficiency with the right manufacturing techniques. Buying, rather than manufacturing, solar
panels had been one of SolarCity’s great advantages. It could capitalize on the glut in the solar cell market
and avoid the large capital expenditures tied to building and running factories. With 110,000 customers,
however, SolarCity had started to consume so many solar panels that it needed to ensure a consistent
supply and price. “We are currently installing more solar than most of the companies are manufacturing,”
said Peter Rive, the cofounder and chief technology officer at SolarCity. “If we do the manufacturing
ourselves and take advantage of some different technology, our costs will be lower—and this business
has always been about lowering the costs.”
After adding the leases, the storage units, and the solar cell manufacturing together, it became clear to
close observers of SolarCity that the company had morphed into something resembling a utility. It had
built out a network of solar systems all under its control and managed by the company’s software. By the
end of 2015, SolarCity expects to have installed 2 gigawatts’ worth of solar panels, producing 2.8
terawatt-hours of electricity per year. “This would put us on a path to fulfill our goal to become one of the
largest suppliers of electricity in the United States,” the company said after announcing these figures in a
quarterly earnings statement. The reality is that SolarCity accounts for a tiny fraction of the United States’
annual energy consumption and has a long way to go to become a major supplier of electricity in the
country. There can, however, be little doubt that Musk intends for the company to be a dominant force in
the solar industry and in the energy industry overall.
What’s more, SolarCity is a key part of what can be thought of as the unified field theory of Musk.
Each one of his businesses is interconnected in the short term and the long term. Tesla makes battery
packs that SolarCity can then sell to end customers. SolarCity supplies Tesla’s charging stations with
solar panels, helping Tesla to provide free recharging to its drivers. Newly minted Model S owners
regularly opt to begin living the Musk Lifestyle and outfit their homes with solar panels. Tesla and
SpaceX help each other as well. They exchange knowledge around materials, manufacturing techniques,
and the intricacies of operating factories that build so much stuff from the ground up.
For most of their histories, SolarCity, Tesla, and SpaceX have been the clear underdogs in their

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respective markets and gone to war against deep-pocketed, entrenched competitors. The solar,
automotive, and aerospace industries remain larded down by regulation and bureaucracy, which favors
incumbents. To people in these industries Musk came off as a wide-eyed technologist who could be easily
dismissed and ridiculed and who, as a competitor, fell somewhere on the spectrum between annoying and
full of shit. The incumbents did their usual thing using their connections in Washington to make life as
miserable as possible on all three of Musk’s companies, and they were pretty good at it.
As of 2012, Musk Co. turned into a real threat, and it became harder to go at SolarCity, Tesla, or
SpaceX as individual companies. Musk’s star power had surged and washed over all three ventures at the
same time. When Tesla’s shares jumped, quite often SolarCity’s did, too. Similar optimistic feelings
accompanied successful SpaceX launches. They proved Musk knew how to accomplish the most difficult
of things, and investors seemed to buy in more to the risks Musk took with his other enterprises. The
executives and lobbyists of aerospace, energy, and automotive companies were suddenly going up against
a rising star of big business—an industrialist celebrity. Some of Musk’s opponents started to fear being on
the wrong side of history or at least the wrong side of his glow. Others began playing really dirty.
Musk has spent years buttering up the Democrats. He’s visited the White House several times and has
the ear of President Obama. Musk, however, is not a blind loyalist. He first and foremost backs the beliefs
behind Musk Co. and then uses any pragmatic means at his disposal to advance his cause. Musk plays the
part of the ruthless industrialist with a fierce capitalist streak better than most Republicans and has the
credentials to back it up and earn support. The politicians in states like Alabama looking to protect some
factory jobs for Lockheed or in New Jersey trying to help out the automobile dealership lobby now have
to contend with a guy who has an employment and manufacturing empire spread across the entire United
States. As of this writing, SpaceX had a factory in Los Angeles, a rocket test facility in central Texas, and
had just started construction on a spaceport in South Texas. (SpaceX does a lot of business at existing
launch sites in California and Florida, as well.) Tesla had its car factory in Silicon Valley, the design
center in Los Angeles, and had started construction on a battery factory in Nevada. (Politicians from
Nevada, Texas, California, New Mexico, and Arizona threw themselves at Musk over the battery factory,
with Nevada ultimately winning the business by offering Tesla $1.4 billion in incentives. This event
confirmed not only Musk’s soaring celebrity but also his unmatched ability to raise funds.) SolarCity has
created thousands of white- and blue-collar clean-tech jobs, and it will create manufacturing jobs at the
solar panel factory that’s being built in Buffalo, New York. All together, Musk Co. employed about fifteen
thousand people at the end of 2014. Far from stopping there, the plan for Musk Co. calls for tens of
thousands of more jobs to be created on the back of ever more ambitious products.
Tesla’s primary focus throughout 2015 will be bringing the Model X to market. Musk expects the SUV
to sell at least as well as the Model S and wants Tesla’s factories to be capable of making 100,000 cars
per year by the end of 2015 to keep up with demand for both vehicles. The major downside accompanying
the Model X is its price. The SUV will start at the same lofty prices as the Model S, which limits the
potential customer base. The hope, though, is that the Model X turns into the luxury vehicle of choice for
families and solidifies the Tesla brand’s connection with women. Musk has pledged that the Supercharger
network, service centers, and the battery-swap stations will be built out even more in 2015 to greet the
arrival of the new vehicle. Beyond the Model X, Tesla has started work on the second version of the
Roadster, talked about making a truck, and, in all seriousness, has begun modeling a type of submarine car
that could transition from road to water. Musk paid $1 million for the Lotus Esprit that Roger Moore
drove underwater in