Musk has come a long way from sleeping at factory
Tesla head’s days of twitter rants in rear-view mirror
Just over a year ago, the Securities and Exchange Commission had launched an investigation into Elon Musk after he tweeted that he planned to take Tesla public. He was facing criticism, and a defamation lawsuit, for calling a Thai-cave rescuer a “pedo guy” and “child rapist.” And when Musk took a hit off a joint during an internet broadcast, it triggered a safety review from NASA that was concerned the billionaire maverick was going off the rails.
But now, Musk is on a roll, literally dancing his way forward past a thicket of controversies. Tesla’s stock price has quadrupled, and the company’s market value now is greater than GM’s and Ford’s combined. A jury acquitted him in the defamation suit. And SpaceX is on the cusp of its first human space flight, having just completed what Musk called “a picture-perfect” test flight.
Most notable for some is that Musk, known for taking to Twitter to tout his successes and lash out at his critics, has demonstrated restraint. He hasn’t tweeted any sensitive numbers about the publicly traded Tesla, and he kept silent after NASA pronounced the software in Boeing’s Starliner capsule — SpaceX’s competitor for sending people into space — so flawed that more than a million lines of code must be meticulously reviewed, a process that could take months. People who follow Musk closely say they’ve noticed the change. Rebukes by regulators and the serious responsibility of sending astronauts to space, now weeks away, have humbled him, they say.
“Elon’s not dealing like he’s under the vice anymore, and he is acting more reasonable,” said Gene Munster, managing partner of analyst firm Loup Ventures.
That doesn’t mean there aren’t challenges ahead. Tesla is launching its new crossover SUV in the first quarter, and new vehicles in the past have become a production stumbling block. Tesla also revealed last week that it’s again under investigation by the SEC.
Musk’s relentless focus on Tesla, in particular, has begun to pay off. Musk’s goal of injecting electric cars into the mainstream is becoming reality, and Wall Street has begun to accept that. The company’s stock has long been besieged by short sellers, gambling that the company won’t achieve its goals. But the short sellers are reeling.
“There are still things they need to work through,” said Munster. “It’s still going to be bumpy. But as far as the core concept — ‘Will Tesla make it or not make it?’ — that question has now been decided. Tesla is going to be around for decades.”
Musk, who was bullied as a child in South Africa and made his way to North America as a teenager, has always had a combative streak that often pitted him against the establishment. He took on the credit card industry with PayPal, where he was CEO until he was ousted in 2000. He founded SpaceX in 2001 and disrupted the military-industrial complex that for years had held a strong hold over America’s space industry. His investment in Tesla didn’t come until 2004, when he was named the company’s chairman of the board. He became CEO in 2008. Forbes estimates his net worth at more than $43 billion.
The low point for Musk came during the summer of 2018. A slate of top executives had left Tesla, which had been struggling and laying off employees in droves. The company was having difficulty delivering on its rosy production promises, and Musk said on Twitter that the company had graduated from one nightmare to another — “from production hell to delivery logistics hell.”
At Tesla, everything started to stabilize once Musk had a new team he could trust to deliver in 2019. Gone were the days when Musk moved into the manufacturing plant, overseeing mundane elements of production personally, such as the Model X production, the company’s paint shop and later the Model 3’s lagging due to overemphasis on automation.
Finally, he began to delegate, more and more, becoming more comfortable after the revolving door of executives finally left him with a team he could trust, former officials and close observers said.
The Model 3 line was ramping up and meeting delivery goals. Tesla opened a factory to produce cars in China. The stock started rising. And Musk did a dance at an event in Shanghai celebrating the first car deliveries in China that went viral and symbolized the sudden turnaround.
Still, there are many perils ahead.
Musk faces serious questions about core pieces of Tesla’s business model that could send the company back to its nearconstant volatility over the last few years, which saw the company’s stock dip to a record low of $177 as recently as June. Even earlier this month, the stock rose nearly 14 per cent to $887 before falling 17 per cent the next day.
It’s also not out of the regulatory line of fire. Tesla revealed earlier this month that the SEC had subpoenaed the company seeking records concerning “certain financial data and contracts including Tesla’s regular financing arrangements” in December, just as the agency closed the investigation into Musk’s tweets.
And then there’s the question of whether Musk can safely fly astronauts — a feat SpaceX hasn’t yet tried. That test is likely to come this spring, when SpaceX is expected to fly two NASA astronauts, Doug Hurley and Bob Behnken, to the International Space Station.
In January, SpaceX nailed a test flight that showed off the capsule’s emergency abort system, paving the way for the first flight with crews on board. Garrett Reisman, a former NASA astronaut who worked at Space X for years and still serves as a consultant, said Musk and the people at SpaceX know “to never believe things are going to be as great as they are during the highs, and not as low during the lows.”
Still, he said, the abort-system test “was a huge morale boost” that fired up Musk and his whole team.
It showed. Hours after the flight, Musk, who turns 49 in June, was loose and in a good mood, holding forth before a gaggle of reporters at the Kennedy Space Center. One of them urged him to show off his dance moves, as he had done in Shanghai when Tesla opened a factory there.
But he demurred, saying maybe he would consider it once he had flown astronauts safely. “I’m not your dancing puppet!”