Elon Musk may be an inspiration for the movie Iron Man, but Musk’s companies have real-world problems to solve.
For many of us, Elon Musk is Tony Stark. The 46-year old has found wildly ambitious tech companies, including SpaceX and Tesla. Musk makes emission-free electric vehicles that have uncommon features like massive touchscreens. He talks about making humanity a multi-planetary species and wants to bring people to Mars.
The billionaire genius actually served as inspiration for Robert Downey Jr., while the latter was filming Iron Man. Musk gave Downey a personal tour of SpaceX, and afterward, Downey suggested a Tesla Roadster be in Tony Stark’s workshop. Musk even made a brief cameo as himself in Iron Man 2.
Unlike Tony Stark, Elon Musk was not born rich; the South African-born Musk is self-made. And it’s worth remembering that pursuing wildly ambitious tech dreams have nearly finished him. By 2008, SpaceX had launched three rockets. All them had blown up before reaching orbit, and Musk only had funds left for one more launch.
In the meantime, Tesla had yet to deliver one car to market. The US$180 million that Musk had pocketed from selling PayPal had been plowed into these companies and was essentially gone.
Fast forward to 2018. SpaceX has made incredible leaps in the past 10 years. Its Falcon Heavy has the highest payload capacity of any current rocket. It has the world’s first and only reusable first stage rockets, which can autonomously return to Earth. SpaceX has contracts from agencies like NASA and the United States Department of Defense. The company is privately held, so outsiders can’t tell how well it’s doing. But in end-2017, Equidate, a platform for trading shares in private firms, valued SpaceX at
US$21.5 billion. Tesla’s story is different. The car company enjoys the same hallowed glow as SpaceX and Musk, but because it’s a public company, we know that Tesla is hemorrhaging money. In fact, Tesla has never made money in its 15-year history.
Tesla posted a quarterly loss of almost US$710 million for the first three months of 2018. That’s more than double for the same period in 2017. Since September of 2017, the company’s shares have fallen by about a quarter. It now has the dubious honor of being the most shorted stock in the US. That means more people bet Tesla’s shares will plunge than any other company.
In the first quarter of the year, Tesla sold fewer than 30,000 cars. It’s not for lack of demand, customers had reserved nearly half a million Model 3s by August. The problem is scale; Tesla can’t make Model 3s fast enough. Its production lines only managed to make 9,800 Model 3s in the first quarter. Tesla has a goal of making 5,000 Model 3s a week by the middle of the year and plans to do 10,000 a week by end 2018. But even that wouldn’t put Tesla among the ranks of established car companies like Toyota, which sells about 2.5 million cars a quarter.
Adding to Tesla’s credibility problems, Musk has recently gone on a bizarre PR offensive. When analysts asked Musk on a recent earnings call about Tesla’s finances, he interrupted with, “Boring, bonehead questions are not cool.” He then turned over questions to YouTuber Galileo Russell, an acknowledged fanboy investor.
Musk has also gone on a recent Twitter war against journalists. He floated an idea of creating a site where the public can rate the trustworthiness of articles and journalists. The name of the proposed site would be Pravda or Russian for ‘truth.’ Apparently, the idea of a billionaire creating a website to attack critics, using a Russian name no less, didn’t appear disingenuous to Musk.
Like with the fictional Tony Stark, we want to believe in Musk, even with his eccentricities. We want to believe in a billionaire genius who can create revolutionary rockets and electric cars, because those are fantastic things. And it makes for a great story. Plus, even if we don’t know Musk the man, we can suppose that Musk is a true believer. The man nearly burnt his substantial fortune chasing visions, when less ambitious people would have disappeared into early retirement.
But we shouldn’t let optimism blind us to realities. Existence doesn’t bend to our will simply from charm and belief. Musk may be a visionary, but whether Tesla will overcome its troubles remains a question. Unlike Tony Stark, Elon Musk has to deal with the practical challenges of real life.