There’s a reason why Elon Musk is being called the next Steve Jobs. Like Jobs, he’s a visionary, a super successful serial entrepreneur, having made his initial fortune with a company he sold to Compaq before starting Paypal. Like Jobs, he saved his beloved baby Tesla Motors from the brink of oblivion. Like Jobs, he’s a genius generalist with “huge steel balls” (according to his ex-wife) and a knack for paradigm-shifting industry disruption. Which means he’s also demanding. “Like Jobs, Elon does not tolerate C or D players,” SpaceX board member and early Tesla investor Steve Jurvetson told BusinessWeek.
Read also: Elon Musk is a fun name to say
But while Jobs was slinging multi-colored music players and touchable smartphones, Musk is building rocket ships and electric-powered supercars. It’s why his friends describe him as not just Steve Jobs but also John D. Rockefeller and Howard Hughes all wrapped in one. Close pal Jon Favreau used Musk as the real-life inspiration for the big screen version of Tony Stark. Elon Musk is a badass.
“Yes, Elon has huge steel balls,” writes his ex-wife Justine Musk. “He truly does.”
And like how Jobs showed us why a touchscreen smartphone was a must-have device — to the dismay of Blackberry addicts everywhere — Musk is ushering us into the age of electric cars. On Monday, Tesla Motors released its Q3 earnings and announced that the first American carmaker to go public since Ford in 1956 had successfully made the transition to a mass-production car company. In September, Tesla was making only 100 cars a week. By October they had reached 200. Now at 400 electric vehicles a week, they’re on pace to meet their projections of 20,000 cars in 2013.
“Overall, I feel Tesla was really kind of past the point of high risk,” Musk said in a conference call with analysts. “And it’s the classic phrase of ‘going through the Valley of Death’ — and I feel as that we are through that valley at this point.”
The company has been through its fair share of Death Valleys. Just four years ago, Tesla was facing extinction when money dried up amid bloated costs and the 2008 financial crisis — along with Musk’s dreams of creating a fully electric automobile for the masses. Musk invested the last of his fortune — then only $3 million — and was borrowing money from friends for living expenses. Industry blog the Truth About Cars ran an ongoing feature called “Tesla Death Watch.”
Tesla survived, in large part thanks to a partnership with Daimler that meant producing a Tesla powered electric Smart car as well as an investment of $50 million for 10 percent of the company (valuing it at $500 million at the time) — reminiscent of the time Microsoft rescued Apple from a similar fate. A year later, the U.S. government agreed to loan the company $465 million from the United States Department of Energy as part of an $8 billion program for breakthrough vehicle technologies (Advanced Technology Vehicles Manufacturing Loan Program).
The Tesla Model S can seat seven.
Despite loud guffaws from the tech community, Romney’s lumping of Tesla with the likes of Solyndra and Fisker during the second presidential debate, accidental or not, was forgivable only because of how poor Tesla looks on paper. The recently-public car company’s losses widened in the past quarter to $110.8 million. In nearly a decade of existence, Tesla has made less than 3000 electric cars. Toyota sold 629,000 hybrids in the last year alone.
In light of ramped up production however, Wall Street’s unwavering support sent the stock soaring nearly nine percent. It’s a bet on the future of the electric car. A bet on Elon Musk. A bet industry incumbent Toyota was eager to make. The reason? “Musk-chan,” Toyota president Akio Toyoda told reporters during a press conference announcing an ongoing partnership and investment of $50 million. “I love him.”
The Tesla-Toyota love affair. In September Toyota released a second generation RAV4 EV using Tesla’s electric motor and batteries.
After all, this is a guy who successfully sent a rocket to the International Space Station. For savvy investors, short term losses are palatable because this is a supply issue. They know that Musk can deliver a beautiful electric vehicle, and it appears he has. Last week, Tesla’s first four-door sedan, the wicked fast yet spacious Model S was named Car of the Year by Automobile Magazine.
“We weren’t expecting much from the Tesla other than some interesting dinner conversation as we considered “real” candidates like the Subaru BRZ and the Porsche Boxster,” the editors wrote. “In fact, the Tesla blew them, and us, away.” With the Model S, you no longer had to choose between the best car and an electric car. The best car is the electric car, a sexy incentive to kick our addiction to oil. “It reminds me of the first time I used an iPhone,” “gasped” associate web editor Ben Timmins. Of course, that was always part of the plan, writes Automobile Mag:
There’s much about the Model S, which Musk himself refers to as “Tesla’s Macintosh,” that has an innovative, Apple flavor. As with the tech giant’s slickest products, there’s a sense that even the smallest details here have been lavished with attention in order to be as distinctive and elegant as possible. To open the panoramic sunroof, for instance, one brings up an overhead image of the car on the touchscreen and literally drags the roof as far back as desired. Why didn’t anyone think of that before? Then there’s Tesla’s controversial but intriguing strategy of distributing its products through company-owned boutiques rather than conventional dealers. It’s being run by George Blankenship, who set up those posh Apple stores. Finally, it’s hard to ignore that Tesla has in Musk a Steve Jobs-like figure, a relentless leader who guides the company’s direction. “They’re both brilliant, both thinking about things that other people won’t be thinking about for twenty years,” Blankenship says.
Like Jobs, Musk has the uncanny ability to get the best out of the best people, including Blankenship. He recruited Franz von Holzhausen to design the Model S, the guy who produced Mazda’s Kabura concept as well as GM’s successful Pontiac Solstice and Saturn Sky. Musk’s top Model S engineer is Peter Rawlinson of Jaguar and Lotus fame. To lead manufacturing, he picked up Gilbert Passin, the former Toyota executive in charge of the Nummi factory that used to make cars for General Motors, but is now making Musk’s vision for the future. And just as Jobs entranced a legion of employees into believing they were changing the world, Musk inspires with ease. “Since we are not appropriately pricing the CO2 capacity of the oceans and atmosphere, then the only way I could think to address that was with innovation,” Musk said of Tesla’s mission.
With the growing public discourse on man made climate change in the wake of Hurricane Sandy, Musk’s vision has never seemed more relevant. Critics will point to the Model S’s price, nearly $80,000 for the top of the line 85-kilowatt-hour battery and 265 mile EPA-rated range. But costs will come down as the company grows, and Tesla is still firmly targeting the luxury market. It was always Musk’s strategy to subsidize his groundbreaking innovations with the rich. There’s a fair share of people who buy cars in that price range and suddenly, the Tesla is best in class depending on your driving needs. Remember, the first iPhone started at $600. Once prices fall, Tesla will be for everyone.
And like Jobs, Musk is preparing Tesla’s ecosystem, a network of “Superchargers” that can juice an upgraded Model S in just 30 minutes (for 3 hours of driving at 60 mph). Best of all, these stations (for Tesla cars only of course) are not only solar powered but net energy positive. “Each solar power system is designed to generate more energy from the sun over the course of a year than is consumed by Tesla vehicles using the Supercharger,” the company wrote in a release in September. Imagine one day driving cross country for free. In Elon Musk’s mind, it’s already possible. In our reality, it could be only a few years away.
Follow Alec on Twitter: @sfnuop