Elon the Dropout: Early Successes
Elon Musk was born in South Africa, and moved to California via Canada and Pennsylvania. He had meant to achieve a PhD in energy physics at Stanford, but his plans changed when the world around him changed.
Elon Musk headed to Stanford University in California to pursue a Ph.D in energy physics. However, his move was timed perfectly with the Internet boom, and he dropped out of Stanford after just two days to become a part of it, launching his first company, Zip2 Corporation.
… Also in 1999, Musk co-founded X.com, an online financial services/payments company. An X.com acquisition the following year led to the creation of PayPal as it is known today, and in October 2002, PayPal was acquired by eBay for $1.5 billion in stock. Before the sale, Musk owned 11 percent of PayPal stock.
… Musk founded his third company, Space Exploration Technologies Corporation, or SpaceX, in 2002 with the intention of building spacecraft for commercial space travel. By 2008, SpaceX was well established, and NASA awarded the company the contract to handle cargo transport for the International Space Station—with plans for astronaut transport in the future—in a move to replace NASA’s own space shuttle missions. __ Elon Musk the Inventive Engineering Entrepreneur
PayPal helped fund SpaceX, which looks to become an astounding business success. The same cannot be said for subsequent startups dealing with renewable energy and electric cars, among other unlikely concepts for a savvy inventor.
SolarCity Beginning to Show Signs of Cracking
With fewer homeowners and businesses opting for a SolarCity solar-power array, the company will have trouble keeping its installation costs down. After three-quarters of foiled expectations, SolarCity’s “credibility is likely at an all-time low,” analysts at Roth Capital said in a note to clients Tuesday. The stock lost more than 25% on Tuesday, on track for its lowest close and its largest one-day decrease since February. Shares are down more than 44% so far this month, and more than 66% year-to-date. Shares traded as low as $16.50 earlier Tuesday, off more than 80% from an all-time high of $86.14 in February 2014. – MarketWatch, 10 May 2016 __ Quoted in WUWT
“Renewable” energy — better known as intermittent, low-quality, unreliable energy — has always been a bad idea when more reliable, higher quality, and more affordable options are available. But many people — including Musk — form sentimental attachments to these ancient forms of low efficiency, unpredictable, low-quality energy. And by latching onto multi-billion dollar government give-aways, such people can give the appearance of making their bad choices appear shiny — until the markets make their pronouncements in an unmistakeable way.
Tesla Motors Has Received Large Amounts of US Government Help — And Continues Losing Money
Over the past few years the company has perpetually burned cash and relied heavily on government subsidies. Though sales are increasing, the company has reported a loss in each of the past 4 quarters. Fiscal 2015 produced a net loss of $888.7 million, a 67% increase from 2014, with total long term debt rising to $2.674 billion. __ http://www.valuewalk.com/2016/05/tesla-motors-inc-tsla-lose-money/
Electric cars suffer from fatal weaknesses: Short driving range, long recharge times, high initial costs, and expensive batteries ($44,000 for the Tesla) that go bad too quickly — making most owners wonder why they fell for the faddish scheme.
Hyperloop Hangs on Future Government Corporate Welfare
In August 2013, he released a concept for a new form of transportation called the “Hyperloop,” an invention that would foster commuting between major cities while severely cutting travel time. Ideally resistant to weather and powered by renewable energy, the Hyperloop would propel riders in pods through a network of low-pressure tubes at speeds reaching more than 700 mph. Musk noted that the Hyperloop could take from seven to 10 years to be built and ready for use.
Musk must know that the “seven to 10 years” prediction for building the Hyperloop is pure fantasy. How many tens of $billions will the Hyperloop have to burn through before it begins to crash and burn like Solarcity?
All of Musk’s ideas since PayPal have relied on significant amounts of government money. But only SpaceX ever had a reasonable chance of paying for itself eventually — by helping to build significant and sustainable markets in earth orbit, the cis-lunar environment, and beyond. Taxpayer money spent on the sentiment-based businesses is essentially squandered, with Musk himself and his private backers as the primary beneficiaries.
Good Elon, Bad Elon
When Elon sticks to solving engineering problems that help to facilitate an abundant and expansive human future — such as outer space exploration and commercial markets — he proves to be ahead of his time. When he wastes time and public resources on old technologies that markets have rejected time and again, he proves himself a sentimental dunce.
Photovoltaics, electric batteries, and electric powered automobiles are all quite old technologies with only the potential for incremental improvements into the foreseeable future. The high cost and lifespan problems of grid scale photovoltaics and large electric battery banks, suggest a limited ability to scale systems based upon those technologies — at least in an affordable and sustainable manner, without massive government subsidies.
High speed intercity and inter-regional mass transit systems (Hyperloop) fall into a different category, and might be affordable if the underlying economy were booming. But an economy cannot boom when governments squander scarce resources on loser technologies such as big wind, big solar, and big batteries. Nuclear power is the best option to provide the abundant, affordable, reliable, high quality form of electric power that might drive Musk’s sentimental technologies (besides the obvious loser — photovoltaics). Elon should be backing advanced nuclear power, like his fellow tech billionaires Peter Thiel, Bill Gates, Jeff Bezos, and others are doing.
Some People Only Have One or Two Good Ideas In Them
Most people have no really good ideas in them. But of those with good ideas, most have only one — or a few. The fact that Elon has both good and bad ideas which he seems to pursue with equal enthusiasm, indicates that he may not yet have developed a rational vision of the world, beyond a handful of sentimental notions.
That would be humanity’s loss, since Elon certainly has the capacity to drive innovation and think outside of the box, when he has to.
The Most Revolutionary Idea is the Development of Human Minds
If Elon were to take all the money he has squandered on SolarCity, Tesla, and Hyperloop, and invest it in the development of educational methods that boost the practical competence and thinking skills of coming human generations, he would leave a far more beneficial and revolutionary mark upon the human future than anything else he has worked on thus far. Assuming that is what he truly wishes to do.
Update – September 2016:
We spoke too soon:
… it eventually emerged that Musk had borrowed money from SpaceX, apparently to help fund Tesla, and also that the rocket venture had been buying SolarCity’s bonds. Since then, the ties between the Musk family of companies has only deepened. __ https://www.bloomberg.com/gadfly/articles/2016-09-01/solarcity-tesla-deal-new-red-flags
It looks as if Musk is indeed putting SpaceX on the block alongside SolarCity and Tesla, if perhaps with slightly less a degree of risk.
This is a perfect illustration of the sheer idiocy that even billionaires can be reduced to, once they fall into the sticky trap of green delusional beliefs. They are not just risking their own money. By using their political connections they are risking the future prosperity of much of the developed world.