Elon Musk: His way or highway

12 May 2020

Over the last decade Elon Musk has become one of the world’s more polarising figures and the demarcation between supporters and detractors can be quite caustic. Pejoratives like 'fanboy' are levelled against Musk’s supporters, while they see critics as purveyors of negativity trussed up as authoritative analysis. There seems to be no reconciling these camps. All of Musk’s achievements are worth examining, but as an automotive magazine we’re most interested in Tesla, although it’s much more than just a car company. 

Musk wasn’t one of the company’s first founders in 2003. He met them in 2004 and their commitment to electric cars matched his own, so he invested a considerable amount of money and became chairman. By 2007 Musk had decided that the CEO at the time wasn’t the person to expand the company or solve the problems it had, so he took control. This was a most fortunate turn of events because the so-called ‘automotive industry crisis’ was just taking hold. During this period, Tesla, under Musk’s control, received tax breaks and credits just like GM, Ford and Fiat Chrysler. It was also granted a Department of Energy loan of $465 million, as were the big three car manufacturers. The receipt of this government money provided critics with a catch for their negative pronouncements. However, unlike the other car companies Tesla paid back the DOE loan plus interest by 2013, which was several years early.

While conventional automakers’ sales and revenue dropped throughout the crisis, Tesla’s grew. Many critics were saying that Tesla was doomed but obviously they were wrong, although the company certainly came close to failure. It was eleventh-hour cash raising by Musk that saved it. The lack of profits over the years has been another constant criticism, but Musk is a long term thinker/planner. Some of his investors and customers are, too. Total revenue has grown year on year and the company was profitable in Q3 and Q4 last year. In Q1 2019, profits had disappeared once again and the stock price dropped.

Predictably, rumours of the company’s immanent failure are being circulated once again. Short-sellers (investors who profit when share prices drop) have been rubbing their hands together, but shorting this company could be a risky move because the share price might rise. Indeed, one investment group is predicting the share price could be $4,000 by about 2024! Trying to understand this company in conventional terms misses a very important point: Musk isn’t interested in doing things in accordance with conventional corporate paradigms. Rather, his companies exist to fulfil his vision of clean energy, pollution free transport systems and getting people to Mars. 

Grandiose delusions? 

Forward-thinking investors don’t think so and they’re willing to continue funding such efforts in expectation of significant future profits and widespread social benefits. Tesla burns through cash because it’s building an ever expanding manufacturing base to support Musk’s lofty objectives. Tesla is one of the most vertically integrated companies around. Musk’s policy has always been to manufacture everything possible in-house and push relentlessly to cut costs. Conventional car companies don’t operate like this (apart from the drive to cut costs), but it’s been a successful approach for Tesla and for Musk’s other businesses, too. The most recent example of this approach was revealed on the company’s Autonomy Day in April when Tesla’s dedicated autonomous driving computer was shown. It had been fitted to production S and X models since March and the Model 3 since April. This makes the cars ready for the biggest change to personal transport since the invention of the car. 

Meanwhile, the development of the next-generation version is already half completed. It can also be retrofitted. Innovation like this is what keeps people investing. Another advantage Tesla has is that all Tesla models constantly gather information that’s sent back to the company and used to train neural networks. No other car company can match the volume and varied data available for this. What’s more, specific data relating to particular situations in which the neural network hasn’t performed well can be requested from the Tesla fleet. This makes possible tightly targeted training for the network. Tesla has access to billions of kilometers of such data.

Musk is often criticised for taking credit for these advances, when teams of extremely intelligent engineers behind the scenes are really responsible. This is more willful misinterpretation than fact. He doesn’t talk about what he has done. He always uses ‘we’ as the subjective pronoun during talks and interviews. Another popular but short-sighted criticism of electric cars generally, and Tesla’s models in particular, is that when the whole manufacturing sequence is considered along with the source of the electricity to power them, plug-in electric cars are no better for the environment than conventional cars. Some suggest that they’re possibly even worse. The overlooked point here is that even if such analysis is true, at the moment these cars are the forbears of future cars that will be more environmentally friendly. We have to start somewhere.

Interestingly, Musk sees Transport as a Service (TaaS) as the dominant transportation model of the future and is positioning Tesla to operate its own fleet of vehicles to participate in, and probably dominate, this market. Musk absorbs information and ideas from everywhere and re-purposes them to make better Teslas. Take, for instance, the gullwing doors on the Model X (Tesla calls them falcon-wing doors). Critics will point out quite correctly that they’re not new. On the Model X they were added to help parents get young children in and out of booster seats more easily, which is why they’re only fitted to the rear stations. Tesla has improved the basic design by adding a second hinge in about the middle of the door that allows greater flexibility for opening in tight spaces.

Many of the refinements on Tesla vehicles are at the behest of Musk himself. One account tells of his test driving a Model X prototype, in which he didn’t like the sun visors or the way they were attached. He instructed his designers to seek out the world’s best sun visors and start there. Doing so resulted in the unique double folding design that swings forward from above the door (because of the continuous windscreen). As a nice touch, it’s secured in place by a magnetic stub that pops out or retracts automatically, rather than a standard clip arrangement.

Musk’s vision is all-encompassing and Tesla acquired SolarCity in 2016 because it’s such a good fit with electric cars. This company makes and installs both conventional-looking solar cells and cells that look just like roof tiles. SolarCity has great products, enormous potential, and huge debt. Pundits have worried, justifiably, that it will be too great a drain on Tesla’s resources. However, Musk has been busy making changes to the subsidiary designed to integrate it into the Tesla sales structure, which has also been changing. Musk says that as Model 3 production becomes more manageable, more resources will be allocated to SolarCity.

Tesla’s disruption of the automotive industry is profound. Musk says he set out to force the mainstream manufacturers to take electric cars seriously and he’s done just that. Arguably, SpaceX, which he founded before he even met the original Tesla team, has caused even greater disruption in the space industry. Musk originally attempted to buy rockets from Russia to get this company off the ground, so to speak. When that didn’t work he simply decided to make his own. Not only did SpaceX make it’s own rockets, it also developed its own engines. The first three rockets failed and Musk recounts that if the fourth didn’t work the company was finished. The fourth launch was successful and SpaceX has gone on to secure contracts from NASA to re-supply the International Space Station using its own internally designed and constructed re-usable capsule. This will carry people before long. 

The SpaceX launch rate continues to increase steadily, as has its development of new rockets and rocket engines. Recoverable first-stage booster technology is also becoming reliable despite naysayer delight over earlier failures. What seems absolutely undeniable is that Musk has achieved a lot, yet his most enthusiastic critics disagree. It’s been suggested that SpaceX’s development of the Dragon capsule is nothing more than a reinvention of the Apollo command module. Indeed, it is true that SpaceX has had access to all of the original technical material for the command module and other components from NASA. However, just because things look similar does not mean they are the same, and complications arise when anything changes in a space vehicle. Recently, SpaceX launched the first 60 of its eventual constellation of more than 7,000 satellites that will encircle the globe and make low latency internet connections available to everyone on the planet. That’s quite a revenue opportunity. Everything is interconnected in Musk’s mind and you can bet that the Tesla vehicle fleet will also be connected to the Starlink network, as it’s called.

Recently, Tesla acquired Maxwell Technologies, a US manufacturer of batteries and ultra-capacitors. The company has developed dry electrode battery cells which increase manufacturing efficiency by around 20 percent. Now Tesla owns that technology and will incorporate it into its battery manufacturing operations. Batteries undergo physical strain during charging and discharging. So, rapid acceleration and deceleration during regenerative braking creates strain in automotive batteries and shortens service life. Combining an ultra-capacitor with a battery pack will absorb and release energy almost instantly during high strain periods of operation.

We certainly admire Musk and the challenging ideas he’s hammering into reality, but there are some things of which we’re skeptical. Colonising Mars is one of them. Why? It’s a horrible place. 
There are many challenges to putting humans on the surface of Mars permanently, but two of the most significant are cosmic radiation and dust. Martian dust is extremely fine, toxic and will get into every crack or crevice. It’s also whipped up by intense dust storms that can last for up to one month and encircle the entire planet. The Martian atmosphere is much less dense than on Earth, so such storms are less severe, but they do blow a great deal of dust about. The airlock seals on any habitat would have to be faultless and remain so. Also, the rarefied atmosphere offers no protection from cosmic rays. Further, Mars has no magnetosphere to protect earthlings from the damaging effects of such rays. Still, if anyone can find solutions to these problems it would be Musk and his very talented cohort. We’ll see.

Hyperloop also comes in for a good deal of criticism, some of it fair, some not. Hyperloop is a very long tube. Creating and maintaining an extremely strong vacuum over such a distance is challenging and expensive. The chance of a failure somewhere along this exposed pipe hundreds of kilometres long is far from small. A sudden loss of vacuum could prove fatal for the occupants of the pods hurtling through it at nearly supersonic speed, or maybe not. The sudden collapse of sealed trailer tanks shown on YouTube occur because such tanks are designed for the very opposite of vacuum. Failure in the Hyperloop might be catastrophically quick, but could also be more in the form of a leak or minor damage that would not result in a major collapse.
The steel Hyperloop tube would expand with temperature differences between day and night and between the upper side exposed to the sun and the shaded underside. However, there is well-established seal technology that could deal with the problem, but it’s expensive because of the number required. These would also have to be very well maintained. The clearance between wall and Hyperloop pod is extremely small and any inward irregularity due to external damage might contact the pod, which would be bad. It seems that the Hyperloop might remain a concept. So what’s the difference between Musk’s usual critics and us on these few matters? Simple - we hope we’re wrong. 

Overall, Tesla’s cars are selling, there is future demand for them, SpaceX continues to develop and launch rockets, solar cells are set to cover the world’s roofs and the world is going to need a lot of batteries. Tesla continues to position itself for dominance in all of these areas and others besides. We await Musk’s next moves with great interest. 

View article and accompanying imagery in the August 2019 issue of Australian Automotive, page 36.