Pictured: Musk (in brown suit) walks with US President Barack Obama at the Space X facilities
He just turned 42 in late June, but electric vehicles have been on Elon Musk’s mind for two decades. The entrepreneur and investor best known for co-founding PayPal and Tesla Motors, is also spinning many creative plates at the minute, including space-rocket company SpaceX and the US solar-power pioneer SolarCity, which filed for an IPO last October. We take a look at what is propelling Musk to innovate in these three areas.
Starting off with Tesla, the reason why Siliconrepublic.com is zeroing in on Musk today is because Tesla has just revealed its earnings for the second quarter of 2013.
Tesla is an electric vehicle start-up that is headquartered in Palo Alto, California. Musk co-founded Tesla in 2003.
At Tesla, Musk has overseen product development and design from the beginning, including the all-electric Tesla Roadster (no longer being produced), Model S (coming to Europe as of this week) and the Model X crossover (set to appear in 2014).
In 2008, the first Roadster arrived in Ireland after it was purchased by a couple in Co Cork.
As chairman and product architect, Musk was instrumental in helping design the Tesla Roadster, for which he won a Global Green award.
The Roadster was discontinued from the production line in 2012. Tesla apparently lost around US$1bn when striving to sell the Roadster.
The all-electric car was hailed by car lovers at the time for its grace, sporty look and speed.
The nifty all-electric Roadster, which accelerates from 0 to 96.5km/h in just 3.7 seconds, can travel for 394km on a single battery charge apparently.
In 2011 the car would have set US customers back by about US$101,500 if they had the cash to splash to get their hands on a Roadster. This would have included the US$7,500 tax incentive.
In that year US customers looking to buy the Roadster in the United States would have received a US$7,500 tax credit, in addition to individual state incentives like US$5,000 tax credits and sales tax waivers, when purchasing the car.
Looking to families and affordability
Then, in 2012, Musk led Tesla to look at making electric cars more affordable.
In that year, Tesla introduced the Model S, the first mass-produced, all-electric family sedan, to the North American market. At the time, the car came at a base price of US$49,900, with a reservation payment of US$5,000.
And Tesla’s next all-electric vehicle is set to be on the roads in 2014.
It’s a crossover that Tesla is calling the Model X. The SUV-type vehicle will feature futuristic falcon-wing doors and is apparently set to go into production in late 2013.
Tesla today
As for today’s financial results, it seems that Tesla’s financial spreadsheet is looking more positive, with the company having told its shareholders today that its financial position and balance sheet have ‘never been stronger’.
In a letter to shareholders, Musk, chairman and CEO at Tesla, and Deepak Ahuja, CFO at Tesla, revealed that while profits were still modest in absolute terms and not the company’s “primary mission”, net income increased by 70pc from last quarter.
Musk reported a strong balance sheet with almost US$750m in cash and no government debt. Together with Ahuja, he told shareholders that total cash was US$747m at quarter end – an increase of US$516m from Q1.
With Tesla’s recent US$1bn capital raise and subsequent repayment of the US$440m outstanding loan from the DoE, Musk and Ahuja pointed to how the brand’s cash balance grew to almost US$750m during Q2 2013. “Our financial position and balance sheet have never been stronger.”
What’s the scope for space technologies and travel?
As well as Tesla, however, Musk is dipping his creative fingers into many pies.
In addition to co-founding PayPal, Musk is the chief designer and founder of the space-technology development company SpaceX,
Musk is overseeing the development of rockets and spacecraft for missions to Earth orbit and potentially to other planets via SpaceX.
The company has been collaborating with NASA for the past few years.
In 2008, SpaceX’s Falcon 9 rocket and Dragon spacecraft won the NASA contract to provide a commercial replacement for the cargo transport function of the Space Shuttle, which retired in 2011.
SpaceX was first private company to ever launch a spacecraft to the International Space Station (ISS) in May 2012.
It then carried out the first contracted cargo resupply flight to the ISS in October 2012.
Solar power
And, if that were not enough, Musk is also non-executive chairman and principal shareholder of SolarCity, which he helped create.
SolarCity, it seems, is now one of the leading providers of solar power systems in the US.
The company filed for an IPO in late 2012.
SolarCity develops rooftop solar-power systems for homes, government agencies and businesses such as Wal-Mart and Intel. SolarCity also offers a leasing option for homeowners so they can pay monthly fees for their solar installation, for example.
In its IPO filing last October SolarCity said it has raised US$1.57bn through 23 investment funds and related financing facilities forged with banks and other companies such as Credit Suisse, Google, PG&E Corporation and U.S. Bancorp.
Musk’s education and electric-vehicle leanings
Born in Pretoria, South Africa to a Canadian mother, Musk has a degree from Queen’s University in Canada, a physics degree from University of Pennsylvania and a business degree from Wharton.
Many moons ago, Musk worked briefly on ultracapacitors at Pinnacle Research in Silicon Valley to understand their potential as an energy-storage mechanism for electric vehicles.
He says he has been fascinated by electric cars for two decades.
He also gives back to the clean-tech community.
In July 2011, Musk donated US$250,000 via the philanthropic Musk Foundation to fund a solar-power project in the city of Soma, Japan. This was in the wake of the Fukushima Daiichi nuclear power plant disaster. Suma was also devastated by the earthquake and tsunami that struck Japan in March 2011.
Back to Tesla – its supercharging map for North America
Reversing back to Tesla, again. Turning to North America, Model S owners now have access to free ‘Supercharging’ between Portland and Vancouver, between St. Louis and Chicago, and apparently across a number of major inter-city routes in the North-east, California and Florida.
“Given the popularity of the Superchargers, we are expanding the size of some locations to enable charging of 10 to 12 Model S vehicles simultaneously. Over the next several weeks, our first European Superchargers will be placed in service with an initial focus on Norway, where we will cover almost 80pc of the population of that country,” Musk and Ahuja told shareholders today.
In addition to its Model S deliveries, Tesla is planning to continue supplying full electric powertrains to Toyota for the RAV4 EV.
“We also completed various deliverables under the Mercedes Benz B-Class EV programme which contributed to development services revenue of almost US$4m.”
Vision for Europe: Norway comes first
This week, Tesla also began its aggressive international expansion by delivering the first Model S vehicles to customers in Europe.
“As demand for Model S grows, we are continuing to expand our manufacturing capacity as well as our global footprint of service centre, retail and Supercharger networks,” said the company today.
What’s the deal for 2013?
As for the remainder of 2013, Musk indicated that the company expects to dole out about US$150m on capital expenditures. This encompasses its recent purchase of 31 acres of land adjacent to its factory for future expansion.
“The growing demand for Model S gives us the confidence to invest in additional production capacity.”
Musk and Ahuja said there are also still some bottlenecks in Tesla’s supply chain that need to be resolved.
“While we are dealing with these bottlenecks, there remains some uncertainty in our ability to increase production as rapidly as we would like.”
Tesla will continue to invest in its sales and service infrastructure.
“All these investments, funded in part by our profitable operations, position us for further expansion of our product portfolio and growth globally,” they told shareholders.
Future of electro-mobility
On its Investors Overview page, Tesla has this to say about the way it believes electric mobility has been overshadowed since the late 1800s in favour of the internal combustion engine, and how it believes that the automobile industry may have hindered innovation in the electric-vehicle space up to now.
This could especially ring true as the auto giants vie to come up with the latest, cheapest and most energy-efficient electric vehicles, with the world facing finite supplies of resources such as oil.
“We believe that more than 100 years after the invention of the internal combustion engine, incumbent automobile manufacturers are at a crossroads and face significant industry-wide challenges,” explains Tesla.
“The reliance on the gasoline-powered internal combustion engine as the principal automobile powertrain technology has raised environmental concerns, created dependence among industrialised and developing nations on oil largely imported from foreign nations and exposed consumers to volatile fuel prices.”
Who killed the electric car?
In addition, Tesla says it believes the legacy investments made by incumbent automobile manufacturers in manufacturing and technology related to the internal combustion engine have to date “inhibited rapid innovation in alternative-fuel powertrain technologies”.
“We believe these challenges offer a historic opportunity for companies with innovative electric powertrain technologies and that are unencumbered with legacy investments in the internal combustion engine to lead the next technological era of the automotive industry.
Watch this space to see who in Ireland will become the first owner of a Model S … !
