CHAPTER 8
THE WHEEL, REINVENTED
While Elon guided SpaceX and Tesla through those tricky years, Tesla had also been working on plans for a new model: the Model S.
In that awful year, 2008, there was a bright spot. Elon had hired the best car designer he could find: a man named Franz von Holzhausen.
Franz von Holzhausen (front) with Elon Musk. (Photo by Jurvetson.)
As a kid, Franz filled his notebooks and drawing paper with sketches of cars. As an adult, he helped reimagine Volkswagen’s iconic Beetle. The original debuted in 1939, and reached peak popularity in the 1960s. The New Beetle launched in 1997 and took the U.S. market by storm—the car was a surprise megahit. After nearly eight years at VW, Franz’s career took him to General Motors and then to Mazda. Along the way, he began taking green materials into account when designing cars.
Now, Franz could focus his clear talent and experience on designing the Model S. The car needed to stand out. He settled on a look that was futuristic but still accessible, something you’d want to be seen driving and could still haul you and your stuff from place to place.
Working in a tent in a corner of the SpaceX factory, Franz and his team began work. In just three months, they had a workable design, and a prototype began to take shape. Inspired by the feel of the greatest sports cars in the world but also the demands of family life—let’s face it, a two-seater means a family of four will face an impossible choice of whom to strap to the roof—the Model S was well underway.
Meeting with Franz and the design team every Friday, Elon pored over every detail, “every nuance of the car. Every bumper, every curve, every little tiny piece of the car. What’s right. What’s wrong. And then that has to be filtered against the engineering needs, the ergonomic needs, regulatory requirements,”118 he explained. He believed you had to care about every millimeter in order to produce a “good product.” Translation, they were shooting for nothing less than perfect.
In spring 2009, the press and invited guests walked into SpaceX headquarters. With a factory backdrop worthy of Tony Stark, the Model S was on proud display. It was the first luxury all-electric sedan. The car was not anywhere close to complete, but again, Elon succeeded in wowing the media and reengaging the public in a now familiar plot line: Elon was molding the impossible into reality. As with the Roadster, orders of the Model S poured in.
Tesla Model S. (Photo by Tesla Motors, Inc.)
And other car makers noticed Tesla’s technology. Daimler, maker of Mercedes, ordered four thousand Tesla battery packs that it took back to Germany to install in its cars. Then Tesla provided batteries for Daimler’s Smart car.
“Coils of aluminum and plastic pellets come in and cars come out,”119 Elon explained to journalist Sarah Lacy, who covers the start-up world. “We do real hard-core manufacturing. We do all the vehicle engineering, all the power train engineering, all the software, and we also of course do all the styling and design of the car.”120
Almost a year after that flashy press event, Tesla received an enormous loan from the U.S. government to keep making electric batteries and to build electric vehicles in the United States. The green energy loan was for $465 million.
Tesla quickly scooped up a car factory. In 2010, after the Great Recession had taken its toll, you could get a car factory for quite a bargain. Plunking down $42 million for a 5.3-million-square-foot facility, Tesla now had a place to make the Model S.
Okay, $42 million doesn’t exactly sound like pocket change, but that being said, the factory, previously owned by both Toyota and GM, was once worth a billion dollars. Suddenly $42 million doesn’t seem like a lot.
It was another important step in solving the world’s oil problem. The plan was for the Roadster to pay for the Model S, which would pay for the Model X, which would pay for a car the masses could afford—in the same way that televisions and smartphones always work. The first model comes out and is usually out of reach for most. But as more models come out with time, the price comes down.
PUBLIC
On June 29, 2010, in New York City, Tesla was about to hit a milestone: becoming a publicly traded company. Elon took his place above the trading floor. Talulah stood next to him smiling. Each held one of his boys on their hip. Other members of Tesla’s team crowded in with them.
Elon Musk celebrates Tesla’s initial public offering at the NASDAQ opening bell on June 29, 2010. (Photo by Mark Lennihan/AP Images.)
The crowd screamed as Elon rang the opening bell at NASDAQ. Only eighteen months earlier, Tesla had been on the verge of collapse. And now? Elon and the members of Team Tesla clapped, smiled, waved their arms, and shouted in celebration. Tesla was officially a publicly traded company. The stock offered at $17 a share. Tesla became the first American car company to go public since Ford in 1956.
The reasons to celebrate did not stop there. Later that year, in September, private planes and helicopters dropped off wedding guests in a small town in the Scottish Highlands. Gathering at a stone cathedral built in the thirteenth century, guests waited for the arrival of the bride and groom. Elon and Talulah did not disappoint, pulling up in a white Rolls-Royce. The couple exchanged vows, and just like a fairy tale, they left in a horse-drawn carriage and danced the night away in a nearby castle. Elon and Talulah were finally husband and wife.
Back in Silicon Valley, the team at Tesla threw themselves into car development. And Elon was not easy to please. Once the prototypes were made, he would drive them, sometimes for an entire weekend, then return the car with a list of changes that needed to be made.
“Tesla is a hard-core technology company. We do really serious engineering. The only bulk value in a company is if you are doing hard work to solve tough problems,”121 Elon explained. He wanted Tesla’s cars to be nothing less than, well, perfect. Period.
IT’S COMPLICATED
Remember when Elon discovered that the price of rockets was overly inflated? He made a similar discovery about the parts used to make rockets. They were way overpriced. Elon found that irritating. If something cost pennies to make, it shouldn’t cost thousands of dollars to buy. What does Elon do in such a situation? Makes the parts himself.
So SpaceX began manufacturing its own. And just like Tesla would not simply assemble a bunch of parts from somewhere else into a car at the Tesla factory, neither would SpaceX. The rocket company would make as many of the parts as it could, which would continue to bring the cost of getting to space down.
It’s hard to overstate just how much this approach broke new ground. It was that same attitude Elon had always had of not going along with the status quo, always questioning why thing are the way they are. And if there wasn’t a good answer to that question, he looked for a new way.
This level of extreme innovation took tremendous intellectual and physical energy. And that often bumped up against a harsh reality: There are only twenty-four hours in a day. And in theory, you are supposed to sleep for some portion of that.
Elon tried to get six hours of sleep a night. Attached to his smartphone, he could read and reply to e-mail from both SpaceX and Tesla—whether being chauffeured to the office, lying in bed, or sitting in the bathroom.
Having shared custody of his kids often meant bringing them along to work events.
“They’re remarkably unimpressed,”122 he said.
After ringing in 2012, a single tweet turned the spotlight back on Elon’s personal life. “@rileytalulah It was an amazing four years. I will love you forever. You will make someone very happy one day.”123
Elon and Talulah separated. In an interview with Forbes magazine, Elon admitted he had simply fallen out of love with Talulah. They had been living apart for six months.
“We took some time apart for several months to see if absence makes the heart grow fonder, and unfortunately it did not,” he continued. “I still love her, but I’m not in love with her. And I can’t really give her what she wants.”124 Unlike Justine, Talulah was not publicly discussing the breakup, and she and Elon were still very close friends.
Next, it was Tesla’s turn to garner international attention. In February 2012, the governor of California, Jerry Brown, stood in the center of a stage in Los Angeles. Brown’s voice echoed as he gushed about California’s special culture of innovation and talent for great design. The crowd cheered, ready for the main event.
Introduced as the person who “pushes the ideal that nothing is impossible,”125 Elon took the stage.
“We created Tesla to make a difference in the world. The world desperately needs sustainable transport,” he said to the audience. “So the thing is, if you don’t make compelling electric cars, if you don’t make electric cars that are—not almost as good as gasoline cars, not as good as gasoline cars—but if you don’t make electric cars that are better, then it’s not going to happen.”
On the stage, he was at ease, making his case, working the room, selling his vision. Whether painting a grand vision for the bigger picture of Tesla’s mission or delving into technical detail, his delivery developed a special Elon signature, a combination of confidence, technical knowledge, and unbridled enthusiasm. The performance was a far cry from the school days when he was tormented by bullies and struggled to make friends.
“What if you could have a car that has more functionality than a minivan, more style than an SUV, and more performance than a sports car?” Elon asked the crowd, pausing. “That’s the Model X!”
Cue the dance club music and lighting. Franz drove the Model X onto the stage with six of the car’s engineers and designers piled inside. And when they were ready to step out, the doors lifted open—like batwings.
Tesla Model X. (Photo by Tesla Motors Inc.)
Okay, technically they are called falcon wings. Whatever you want to call them, they were a showstopper. Sure, the Model S hadn’t been delivered yet. But it didn’t seem to matter much. Customers were fans, and they were willing to wait.
CHARGED
That summer of 2012, Elon circled a Model S, crouching down, opening the doors, and taking a long, careful inventory of every detail. The men and women who built the car looked on with pride, teary eyed.
After inspecting each car, Elon handed them over to their new owners—confident in the quality, craftsmanship, and design.
It was an emotional moment of triumph, captured by the media and cheered by invited guests. Delays meant that delivery of the first Model S cars was at least a year and a half late, but it still happened. Those first owners drove their sedans home. Elon and his team had delivered on a promise that most car experts had thought was impossible. He was late but he did it.
In the fall, Elon expanded Tesla’s business. Now it wasn’t just making cars, it was charging them too. Remember, Elon wanted Tesla to replace traditional gas-powered cars, so they not only needed to look good, they needed to handle everything traditional cars could—including long distances.
Three hundred miles on a single charge was certainly a game changer—unless you needed to drive across the country or even from Los Angeles to San Francisco. To solve this issue, Tesla decided to make charging stations for their cars. They started with six stations in California as far north as Sacramento, where Tesla owners could plug in midtrip and recharge with just a thirty-minute stop. And it was free. As of this writing, there are more than 1,300 Supercharger stations throughout North America, Asia, Europe, and the Middle East. Tesla also offered turn-by-turn directions for drivers, complete with en-route charging station locations.
Tesla Supercharger stations in Rochester, New York.
All that triumph and expansion seemed an unlikely buildup to a moment of national humiliation. But everyone across the United States and around the world who tuned to watch the presidential debate between Barack Obama and Governor Mitt Romney was in for a surprise. Tesla was about to make a cameo—as a loser.
Remember that loan from the U.S. government? Well, in a charged exchange, Romney brought up Obama’s green energy loans. Tesla wasn’t the only company who received one. So did a handful of other green energy companies, some of which had gone bankrupt.
Romney spouted at Obama, “But don’t forget, you put $90 billion, like fifty years’ worth of breaks, into—into solar and wind, to Solyndra and Fisker and Tesla and Ener1. I mean, I had a friend who said you don’t just pick the winners and losers, you pick the losers, all right? So this—this is not—this is not the kind of policy you want to have if you want to get America energy secure.”126
So at a moment when the world was watching, Tesla was branded a loser. Yikes. The media seized on the exchange. A month later, Romney had lost the election.
And by the next spring, Elon went on national television to reveal the final tally. Tesla had just repaid that loan in full—nine years ahead of schedule127 and with interest.
“Ultimately, the U.S. taxpayers actually made a profit of over twenty million dollars on this loan,”128 he told Bloomberg Television.
Elon loved paying back that loan. It proved his naysayers dead wrong.
What Do You Do When You Are Out of Batteries?
Tesla Gigafactory in Sparks, Nevada. (Photo by Tesla Motors Inc.)
Tesla’s demand for lithium-ion batteries quickly outran the world’s supply.
Not having the batteries on time delayed car production.
In 2014, Elon found himself back in the desert, looking for the right spot to build a factory—where Tesla could make its own batteries.
Meet the Gigafactory, located in, um … Sparks, Nevada, on Electric Avenue.
The $5 billion factory is designed to be built in phases, but once complete, the total size will be 5.8 million square feet. How big is that? Big enough to fit more than two hundred White Houses inside.
In a TED Talk, Elon was asked how many Gigafactories it would take to get us to a future where we don’t need to feel guilty about energy use. That means enough lithium-ion batteries to run everything that’s currently powered by fossil fuels in the world. Without flinching, Elon said, “It’s about a hundred roughly. It’s not ten or a thousand. Most likely a hundred.”129 As of 2018, there are plans to build Gigafactories in China and Europe.