Already a Bloomberg.com user?
Sign in with the same account.
The CEO of Tesla and SpaceX is plunging his money and skills into revolutionary ventures to drive consumers into electric cars and someday colonize Mars
When Jon Favreau, director of the Marvel (MVL) superhero film Iron Man, needed a corporate executive for actor Robert Downey Jr. to use as a role model for the flick's hero Tony Stark, he sought out Elon Musk. Like the fictional Stark, an engineering genius who runs a weaponry company and designs many of its armaments, the 38-year-old Musk is the CEO of a company—two, in fact—while serving as the top technologist for both. The two tech execs even tool around in flashy cars: Stark in a superpowered Audi, Musk in a $109,000 electric sports car that was the first vehicle off the assembly line at Tesla Motors, one of his two companies.
Musk appropriately got a smallish role as a scientist in Iron Man. In fact, throw in Musk's one-third interest in SolarCity, a company started by two cousins that has become a leader in solar panels for homes and business, and you have a guy who is probably as close to an industrialist as the Internet has ever spawned. The son of an electrical engineer, the South African-born Musk holds both economics and physics degrees from the University of Pennsylvania. By the time he was 31, Musk had started and sold off two tech companies—the second being PayPal, which was snapped up by eBay (EBAY) in 2002 for $1.5 billion. That made Musk worth about $350 million, but over lunch recently he was very cagey about what he's worth now. "I have a very thin net worth outside my companies, maybe 5% of that."
That's because Musk has decided to plow much of his fortune into the areas he figures will most transform mankind over the next few years—and perhaps not so incidentally make him another fortune. The areas are the Internet, space travel, and improving the environment, he tells me, "and I've already done the Internet."
Nothing Funny About Musk's Designs
Musk eventually intends to create a business ferrying tourists to the moon and back, and ultimately establish a colony on Mars. He has invested $100 million or so to start rocketmaker Space Exploration Technologies, or SpaceX, which next year intends to launch the first of 12 cargo flights to the International Space Station. "We're still very much interested in getting to Mars, but not until we can get the price down," says Musk of his Mars Oasis project. Closer to terra firma, he has put around $75 million into launching Tesla and another $10 million or so in SolarCity.
It would be easy to laugh off a man who peppered much of our one-hour lunch with technology chatter about aerodynamics and gear ratios that I could barely understand. But the guy knows his stuff. As SpaceX's chief technology officer, Musk helped design the company's rockets. As Tesla's CEO and product architect, he stepped in to overhaul the car design, creating a superfast, carbon-fiber roadster that's able to hit 60 miles an hour in 3.9 seconds, with a range of 244 miles.
The federal government clearly takes the tall, blue-eyed entrepreneur seriously. Last year, NASA awarded SpaceX a $1.6 billion contract to haul cargo to the space station. And in June, the Energy Dept. gave $465 million in low-interest loans to Tesla Motors (others went to Ford (F) and Nissan (NSANY)) that will allow Musk's company to begin building a plant in California to churn out an all-electric sedan for the masses. That one will sell for $49,000 after a $7,500 federal tax credit.
A BlackBerry for Each Enterprise
Musk figures America needs to end its oil dependency and to do it fast. "You could have the entire country driving the Prius and we'd still be addicted to oil," he says of Toyota's hybrid gasoline-electric car. Such talk hasn't made Musk a popular guy. Until recently he was fighting a lawsuit filed by former Tesla CEO Martin Eberhard, who accused Musk of defamation of character and of "rewriting" Tesla's history to make himself a founder. In mid-August, Eberhard withdrew the suit after a California judge turned aside his attempt to keep Musk from calling himself a founder.
The two sides are now in mediation, but before Eberhard withdrew the suit Musk blasted him in a sharply worded blog on Tesla's corporate site, accusing the former CEO of seeking to "perpetuate a vision of Tesla's history that is at odds with the truth." In a move that surely must have made his lawyers grimace, Musk also included a string of e-mails that attested to his early efforts to get Tesla off the ground.
Meanwhile, Musk, like Tony Stark, is involved in nearly every aspect of his far-flung empire. As we leave the restaurant, he is juggling two BlackBerrys, one for each of his companies. Tesla is profitable—at least this quarter—but will soon plunge into the red, he says, when it ramps up production and fills out a dealer network that will have outlets in New York, Los Angeles, and other cities. Will Tesla become the major car company Musk envisions? Will SpaceX eventually ferry folks to the moon and beyond?
That's hard to tell. But you have to admire a guy who is betting most of his money on his own skills to find out.