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

The Spy Who Loved Me
and wants to prove that such a vehicle can be done. “Maybe
we’ll make two or three, but it wouldn’t be more than that,” Musk told the 
Independent
newspaper. “I
think the market for submarine cars is quite small.”

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At the opposite end of the sales spectrum, or so Musk hopes, will be Tesla’s third-generation car, or
the Model 3. Due out in 2017, this four-door car would come in around $35,000 and be the real measure
of Tesla’s impact on the world. The company hopes to sell hundreds of thousands of the Model 3 and
make electric cars truly mainstream. For comparison, BMW sells about 300,000 Minis and 500,000 of its
BMW 3 Series vehicles per year. Tesla would look to match those figures. “I think Tesla is going to make
a lot of cars,” Musk said. “If we continue on the current growth rate, I think Tesla will be one of the most
valuable companies in the world.”
Tesla already consumes a huge portion of the world’s lithium ion battery supply and will need far
more batteries to produce the Model 3. This is why, in 2014, Musk announced plans to build what he
dubbed the Gigafactory, or the world’s largest lithium ion manufacturing facility. Each Gigafactory will
employ about 6,500 people and help Tesla meet a variety of goals. It should first allow Tesla to keep up
with the battery demand created by its cars and the storage units sold by SolarCity. Tesla also expects to
be able to lower the costs of its batteries while improving their energy density. It will build the
Gigafactory in conjunction with longtime battery partner Panasonic, but it will be Tesla that is running the
factory and fine-tuning its operations. According to Straubel, the battery packs coming out of the
Gigafactory should be dramatically cheaper and better than the ones built today, allowing Tesla not only
to hit the $35,000 price target for the Model 3 but also to pave the way for electric vehicles with 500-plus
miles of range.
If Tesla actually can deliver an affordable car with 500 miles of range, it will have built what many
people in the auto industry insisted for years was impossible. To do that while also constructing a
worldwide network of free charging stations, revamping the way cars are sold, and revolutionizing
automotive technology would be an exceptional feat in the history of capitalism.
In early 2014, Tesla raised $2 billion by selling bonds. Tesla’s ability to raise money from eager
investors was a newfound luxury. Tesla had bordered on bankruptcy for much of its existence and been
one major technical gaffe from obsolescence at all times. The money coupled with Tesla’s still-rising
share price and strong sales has put the company in a position to open lots of new stores and service
centers while advancing its manufacturing capabilities. “We don’t necessarily need all of the money for
the Gigafactory right now, but I decided to raise it in advance because you never know when there will be
some bloody meltdown,” Musk said. “There could be external factors or there could be some unexpected
recall and then suddenly we need to raise money on top of dealing with that. I feel a bit like my
grandmother. She lived through the Great Depression and some real hard times. Once you’ve been through
that, it stays with you for a long time. I’m not sure it ever leaves really. So, I do feel joy now, but there’s
still that nagging feeling that it might all go away. Even later in life when my grandmother knew there was
really no possibility of her going hungry, she always had this thing about food. With Tesla, I decided to
raise a huge amount of money just in case something terrible happens.”
Musk felt optimistic enough about Tesla’s future to talk to me about some of his more whimsical
plans. He hopes to redesign the Tesla headquarters in Palo Alto, a change employees would welcome.
The building, with its tiny, 1980s-era lobby and a kitchen that can barely handle a few people making
cereal
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at the same time, has none of the perks of a typical Silicon Valley darling. “I think our Tesla
headquarters looks like crap,” Musk said. “We’re going to spruce things up. Not to sort of the Google
level. You have to be like making money hand over fist in order to be able to spend money the way that
Google does. But we’re going to make our headquarters much nicer and put in a restaurant.” Naturally,
Musk had ideas for some mechanical enhancements as well. “Everybody around here has slides in their
lobbies,” he said. “I’m actually wondering about putting in a roller coaster—like a functional roller
coaster at the factory in Fremont. You’d get in, and it would take you around factory but also up and down.

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Who else has a roller coaster? I’m thinking about doing that with SpaceX, too. That one might be even
bigger since SpaceX has like ten buildings now. It would probably be really expensive, but I like the idea
of it.”
What’s fascinating is that Musk remains willing to lose it all. He doesn’t want to build just one
Gigafactory but several. And he needs these facilities to be built quickly and flawlessly, so that they’re
cranking out massive quantities of batteries right as the Model 3 arrives. If need be, Musk will build a
second Gigafactory to compete with the Nevada site and place his own employees in competition with
each other in a race to make the batteries first. “We’re not really trying to sort of yank anyone’s chain
here,” Musk said. “It’s just like this thing needs to be completed on time. If we suddenly find that we’re
leveling the ground and laying the foundation and we’re on a bloody Indian burial ground, then fuck. We
can’t say, ‘Oh shit. Let’s go back to the other place that we were thinking about and get a six-month reset.’
Six months for this factory is a huge deal. Do the basic math and it’s more than a billion dollars a month in
lost revenue,
*
 assuming we use it to capacity. From a different standpoint, if we spend all the money to
prepare the car factory in Fremont to triple the volume from 150,000 per year to 450,000 or 500,000 cars
and hire and train all the people, and we’re just sitting there waiting for the factory to come on line, we’d
be burning money like it was going out of fashion. I think that could kill the company.
“A six-month offset would be like, like Gallipoli. You have to make sure you charge right after the
bombardment. Don’t fucking sit around for two hours so that the Turks can go back in the trenches. Timing
is important. We have to do everything we can to minimize the timing risk.”
What Musk struggles to fathom is why other automakers with deeper pockets aren’t making similar
moves. At a minimum, Tesla seems to have influenced consumers and the auto industry enough for there to
be an expected surge in demand for electric vehicles. “I think we have moved the needle for almost every
car company,” Musk said. “Just the twenty-two thousand cars we sold in 2013 had a highly leveraged
effect in pushing the industry toward sustainable technology.” It’s true that the supply for lithium ion
batteries is already constrained, and Tesla looks like the only company addressing the problem in a
meaningful way.
“The competitors are all sort of pooh-poohing the Gigafactory,” Musk said. “They think it’s a stupid
idea, that the battery supplier should just go build something like that. But I know all the suppliers, and I
can tell you that they don’t like the idea of spending several billion dollars on a battery factory. You’ve
got a chicken-and-egg problem where the car companies are not going to commit to a giant volume
because they’re not sure you can sell enough electric cars. So, I know we can’t get enough lithium ion
batteries unless we build this bloody factory, and I know no one else is building this thing.”
There’s the potential that Tesla is setting itself up to capitalize on a situation like the one Apple found
itself in when it first introduced the iPhone. Apple’s rivals spent the initial year after the iPhone’s release
dismissing the product. Once it became clear Apple had a hit, the competitors had to catch up. Even with
the device right in their hands, it took companies like HTC and Samsung years to produce anything
comparable. Other once-great companies like Nokia and BlackBerry didn’t withstand the shock. If, and
it’s a big if, Tesla’s Model 3 turned into a massive hit—the thing that everyone with enough money wanted
because buying something else would just be paying for the past—then the rival automakers would be in a
terrible bind. Most of the car companies dabbling in electric vehicles continue to buy bulky, off-the-shelf
batteries rather than developing their own technology. No matter how much they wanted to respond to the
Model 3, the automakers would need years to come up with a real challenger and even then they might not
have a ready supply of batteries for their vehicles.
“I think it is going to be a bit like that,” Musk said. “When will the first non-Tesla Gigafactory get
built? Probably no sooner than six years from now. The big car companies are so derivative. They want to

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see it work somewhere else before they will approve the project and move forward. They’re probably
more like seven years away. But I hope I’m wrong.”
Musk speaks about the cars, solar panels, and batteries with such passion that it’s easy to forget they
are more or less sideline projects. He believes in the technologies to the extent that he thinks they’re the
right things to pursue for the betterment of mankind. They’ve also brought him fame and fortune. Musk’s
ultimate goal, though, remains turning humans into an interplanetary species. This may sound silly to
some, but there can be no doubt that this is Musk’s raison d’être. Musk has decided that man’s survival
depends on setting up another colony on another planet and that he should dedicate his life to making this
happen.
Musk is now quite rich on paper. He was worth about $10 billion at the time of this writing. When he
started SpaceX more than a decade ago, however, he had far less capital at his disposal. He didn’t have
the fuck-you money of a Jeff Bezos, who handed his space company Blue Origin a kingly pile of cash and
asked it to make Bezos’s dreams come true. If Musk wanted to get to Mars, he would have to earn it by
building SpaceX into a real business. This all seems to have worked in Musk’s favor. SpaceX has learned
to make cheap and effective rockets and to push the limits of aerospace technology.
In the near term, SpaceX will begin testing its ability to take people into space. It wants to perform a
manned test flight by 2016 and to fly astronauts to the International Space Station for NASA the next year.
The company will also likely make a major move into building and selling satellites, which would mark
an expansion into one of the most lucrative parts of the aerospace business. Along with these efforts,
SpaceX has been testing the Falcon Heavy—its giant rocket capable of flying the biggest payloads in the
world—and its reusable-rocket technology. In early 2015, SpaceX almost managed to land the first stage
of its rocket on a platform in the ocean. Once it succeeds, it will begin performing tests on land.
In 2014, SpaceX also began construction on its own spaceport in South Texas. It has acquired dozens
of acres where it plans to construct a modern rocket launch facility unlike anything the world has seen.
Musk wants to automate a great deal of the launch process, so that the rockets can be refueled, stood up,
and fired on their own with computers handling the safety procedures. SpaceX wants to fly rockets
several times a month for its business, and having its own spaceport should help speed up such
capabilities. Getting to Mars will require an even more impressive set of skills and technology.
“We need to figure out how to launch multiple times a day,” Musk said. “The thing that’s important in
the long run is establishing a self-sustaining base on Mars. In order for that to work—in order to have a
self-sustaining city on Mars—there would need to be millions of tons of equipment and probably millions
of people. So how many launches is that? Well, if you send up 100 people at a time, which is a lot to go
on such a long journey, you’d need to do 10,000 flights to get to a million people. So 10,000 flights over
what period of time? Given that you can only really depart for Mars once every two years, that means you
would need like forty or fifty years.
“And then I think for each flight that departs to Mars you want to sort of launch the spacecraft into
orbit and then have it be in a parking orbit and refuel its tanks with propellant. Essentially, the spacecraft
would use a bunch of its propellant to get to orbit, but then you send up a tanker spacecraft to fill up the
propellant tanks of the spacecraft so that it can depart for Mars at high speed and can do so and get there
in three months instead of six months and with a large payload. I don’t have a detailed plan for Mars but I
know of something at least that would work, which is sort of this all-methane system with a big booster, a
spacecraft, and a tanker potentially. I think SpaceX will have developed a booster and spaceship in the
2025 time frame capable of taking large quantities of people and cargo to Mars.
“The thing that’s important is to reach an economic threshold around the cost per person for a trip to
Mars. If it costs $1 billion per person, there will be no Mars colony. At around $1 million or $500,000

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per person, I think it’s highly likely that there will be a self-sustaining Martian colony. There will be
enough people interested who will sell their stuff on Earth and move. It’s not about tourism. It’s like
people coming to America back in the New World days. You move, get a job there, and make things work.
If you solve the transport problem, it’s not that hard to make a pressurized transparent greenhouse to live
in. But if you can’t get there in the first place, it doesn’t matter.
“Eventually, you’d need to heat Mars up if you want it to be an Earthlike planet, and I don’t have a
plan for that. That would take a long time in the best of circumstances. It would probably take, I don’t
know, somewhere between a century and a millennium. There’s zero chance of it being terraformed and
Earthlike in my lifetime. Not zero, but 0.001 percent chance, and you would have to take real drastic
measures with Mars.”
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Musk spent months pacing around his home in Los Angeles late at night thinking about these plans for
Mars and bouncing them off Riley, whom he remarried near the end of 2012.
*
 “I mean, there aren’t that
many people you can talk to about this sort of thing,” Musk said. These chats included Musk daydreaming
aloud about becoming the first man to set foot on the Red Planet. “He definitely wants to be the first man
on Mars,” Riley said. “I have begged him not to be.” Perhaps Musk enjoys teasing his wife or maybe he’s
playing coy, but he denied this ambition during one of our late-night chats. “I would only be on the first
trip to Mars if I was confident that SpaceX would be fine if I die,” he said. “I’d like to go, but I don’t
have to go. The point is not about me visiting Mars but about enabling large numbers of people to go to
the planet.” Musk may not even go into space. He does not plan to participate in SpaceX’s upcoming
human test flights. “I don’t think that would be wise,” he said. “It would be like the head of Boeing being
a test pilot for a new plane. It’s not the right thing for SpaceX or the future of space exploration. I might be
on there if it’s been flying for three or four years. Honestly, if I never go to space, that will be okay. The
point is to maximize the probable life span of humanity.”
It’s difficult to gauge just how seriously the average person takes Musk when he talks like this. A few
years ago, most people would have lumped him into the category of people who hype up jet packs and
robots and whatever else Silicon Valley decided to fixate on for the moment. Then Musk filed away one
accomplishment after another, transforming himself from big talker to one of Silicon Valley’s most
revered doers. Thiel has watched Musk go through this maturation—from the driven but insecure CEO of
PayPal to a confident CEO who commands the respect of thousands. “I think there are ways he has
dramatically improved over time,” said Thiel. Most impressive to Thiel has been Musk’s ability to find
bright, ambitious people and lure them to his companies. “He has the most talented people in the
aerospace industry working for him, and the same case can be made for Tesla, where, if you’re a talented
mechanical engineer who likes building cars, then you’re going to Tesla because it’s probably the only
company in the U.S. where you can do interesting new things. Both companies were designed with this
vision of motivating a critical mass of talented people to work on inspiring things.” Thiel thinks Musk’s
goal of getting humans to Mars should be taken seriously and believes it gives the public hope. Not
everyone will identify with the mission but the fact that there’s someone out there pushing exploration and
our technical abilities to their limits is important. “The goal of sending a man to Mars is so much more
inspiring than what other people are trying to do in space,” Thiel said. “It’s this going-back-to-the-future
idea. There’s been this long wind-down of the space program, and people have abandoned the optimistic
visions of the future that we had in the early 1970s. SpaceX shows there is a way toward bringing back
that future. There’s great value in what Elon is doing.”
The true believers came out in full force in August 2013 when Musk unveiled something called the
Hyperloop. Billed as a new mode of transportation, this machine was a large-scale pneumatic tube like
the ones used to send mail around offices. Musk proposed linking cities like Los Angeles and San

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Francisco via an elevated version of this kind of tube that would transport people and cars in pods.
Similar ideas had been proposed before, but Musk’s creation had some unique elements. He called for the
tube to run under low pressure and for the pods to float on a bed of air produced by skis at their base.
Each pod would be thrust forward by an electromagnetic pulse, and motors placed throughout the tube
would give the pods added boosts as needed. These mechanisms could keep the pods going at 800 mph,
allowing someone to travel from Los Angeles to San Francisco in about thirty minutes. The whole thing
would, of course, be solar-powered and aimed at linking cities less than a thousand miles apart. “It makes
sense for things like L.A. to San Francisco, New York to D.C., New York to Boston,” Musk said at the
time. “Over one thousand miles, the tube cost starts to become prohibitive, and you don’t want tubes
every which way. You don’t want to live in Tube Land.”
Musk had been thinking about the Hyperloop for a number of months, describing it to friends in
private. The first time he talked about it to anyone outside of his inner circle was during one of our
interviews. Musk told me that the idea originated out of his hatred for California’s proposed high-speed
rail system. “The sixty-billion-dollar bullet train they’re proposing in California would be the slowest
bullet train in the world at the highest cost per mile,” Musk said. “They’re going for records in all the
wrong ways.” California’s high-speed rail is meant to allow people to go from Los Angeles to San
Francisco in about two and a half hours upon its completion in—wait for it—2029. It takes about an hour
to fly between the cities today and five hours to drive, placing the train right in the zone of mediocrity,
which particularly gnawed at Musk. He insisted the Hyperloop would cost about $6 billion to $10 billion,
go faster than a plane, and let people drive their cars onto a pod and drive out into a new city.
At the time, it seemed that Musk had dished out the Hyperloop proposal just to make the public and
legislators rethink the high-speed train. He didn’t actually intend to build the thing. It was more that he
wanted to show people that more creative ideas were out there for things that might actually solve
problems and push the state forward. With any luck, the high-speed rail would be canceled. Musk said as
much to me during a series of e-mails and phone calls leading up to the announcement. “Down the road, I
might fund or advise on a Hyperloop project, but right now I can’t take my eye off the ball at either
SpaceX or Tesla,” he wrote.
Musk’s tune, however, started to change after he released the paper detailing the Hyperloop.