A Kink in the Hyperloop

One person who’s confident about the company’s prospects is the author of the Forbes article that put it on the map, Bruce Upbin, who in May joined the company as its vice-president of strategic communications.* Pishevar, who has said that he expects there to be a working passenger hyperloop, somewhere in the world, by 2021, insists that the company is stronger than ever, and he shrugs off the suit, which is ongoing, as a speed bump he doesn’t spend much time thinking about. “I think this idea is bigger than any one person, including myself, and in many ways this is a movement, and anyone that begins to feel like they’re indispensable, or that they’re bigger than the idea, doesn’t fit the culture anymore.” He mentioned famous founder schisms at other tech companies. “The people that we sometimes start our journeys with are not the people we end the journeys with.”

But in Silicon Valley, traditional venture capitalists have for the most part steered clear of the company, finding it too speculative, capital-intensive, and long-term to meet their investing criteria. (An exception, Vinod Khosla, told me he was “only a token investor.”) “Most people thought it was not a scam but a fantasy,” says a seasoned Valley insider who knows the players and who allows that Pishevar’s enthusiasm is genuine: “He believes this bullshit.” The lawsuit hasn’t helped. “No one was taking it seriously. Now it’s like, Who are these clowns?

“He reminds me of Voltaire,” says Kara Swisher, co-founder of Recode and a fan of Pishevar’s, referring to the philosophe’s ever-sunny Candide.“People get attacked and there’s war, and he’s like, ‘All for the best, in the best of all possible worlds.’ ” As we walked around the neighborhood near the company headquarters, Pishevar stopped to hand a few crumpled bills to a homeless man on a crate, and pointed out a retro typeface on the old Sears building. “When I look at cities now, I don’t see them in the present,” he said. “This is the decaying infrastructure of our existing cities. Years from now, none of this is going to be here. New cities are going to rise.”

Maybe the best thing going for hyperloop the concept — if not Hyperloop the company — is that Musk has not abandoned the idea. At last summer’s Code conference, a month before the lawsuit was filed, he said: “I think if the companies that are trying to make it happen now, if for whatever reason that doesn’t work out, then I think, you know, I’ll, I might do something myself in the future.”

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Elon Musk’s House of Gigacards

“Master plan part deux” relies on a bold new sales and marketing strategy as well. Rather than continue hiring thousands of door-to-door and telephone reps to sell solar panels, Tesla intends to push SolarCity’s business through its rapidly growing chain of retail stores by converting them into one-stop shops for environmentally conscious consumers. Instead of buying an electric car only to have it use electricity from a far-off coal plant, a customer would be able to lease or buy solar panels as well as Tesla Powerwall storage units so power is available on cloudy days and at night—or to sell back into the grid. Musk hasn’t provided details on what such a package would cost, but Shah, the Generate Capital executive, thinks Tesla could charge $900 a month on a 20-year contract to get a Tesla, a solar roof, a storage unit, and the right to upgrade to a newer-model Tesla twice during the life of the contract.

Like so much else with Elon Musk, the vision is elegant and ripe with potential. So far, only around one million of the world’s 2.5 billion cars are electric, and only 1 percent of U.S. homes have gone solar. Sales of the Powerwall and a higher-capacity version designed for businesses have been disappointing. Tesla says production problems are to blame, though it’s not clear that fixing those issues will be enough make the Powerwall a cost-effective way to run a home entirely on solar power. But if consumers do decide to buy these soup-to-nuts renewable-power setups, and if solar penetration rises to 15 percent, as it has in Australia in recent years, the overall market opportunity just in the U.S. will be $470 billion, says Shah. And Tesla is also hoping to become a leading provider of equipment and services to large utilities. The company recently announced a deal to provide 20 megawatts of power storage to Southern California Edison for the “largest lithium-ion battery storage project in the world.”

That said, Tesla has yet to show it can build a world-class industrial sales organization. And how many people are really going to go to their local Tesla store and buy in to Musk’s dream? Even Tesla’s affluent true believers might balk, says Gerber. “Elon seems to think that green-minded rich guys like me will decide to put solar on my house, and buy a car or two while they’re at it,” he says. “That’s not how people think.” What’s more, 63 percent of homes in the U.S. are not owned by the resident but by landlords or condo associations, according to the National Multifamily Housing Council. These owners have little incentive to invest in solar and storage.

Possibly the biggest risk is that Musk loses credibility by taking on so many huge challenges at once. While he’s delivered on many bold product promises in the past, his luster could fade with a few well-publicized misses. Tesla is facing criticism for the aggressive way it marketed its Autopilot feature, leading some people to believe they could leave the driving to the car. “They’re pushing hard to be seen as being on the leading edge, and I’m not sure safety is their number-one priority,” says Fisher of Consumer Reports. After a Florida man was killed in May, Tesla updated the cars’ software so that drivers who ignore too many warnings to keep their hands on the wheel won’t be able to reactivate Autopilot for the rest of the trip.

Just how safe Tesla investors are is another matter, judging from the daunting degree of difficulty facing Musk. Many investors think Tesla was assuming appropriate levels of risk with its crisp plan to take on Detroit. Others believe the company’s best opportunity is to become the leading maker of batteries for storing solar power and powering multiple manufacturers’ electric cars. That could be lucrative even if Musk can’t dominate the electric-car or solar-installation businesses. But unless shareholders shoot down the SolarCity merger, Tesla investors will not be taking one of those routes.

Instead, Musk will ask them to go along with something far bolder. His record as an innovator and visionary is beyond question. But the next year or two will determine whether he can do what ­Edison failed to do: translate his sweeping vision into historic business success.

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Elon Musk’s Wild Ride

Elon Musk recently took the stage in Guadalajara, Mexico, for the performance he’s waited a lifetime to give. Sporting a new, oddly manicured mustache, Musk did his best shy Tony Stark impersonation, informing a crowd of space enthusiasts that, yes, he does plan to colonize Mars. Musk’s aerospace company, SpaceX, will send thousands of rockets and people to the Red Planet—perhaps within the decade and perhaps at a cost of just $10 billion. Some of the astronauts will die as part of the experiment. Others will live out their days in … well, Musk was not very specific on that.

Musk continues to befuddle planet earth. He’s part techno messiah—a being sent here from the future to save mankind from itself—and part charlatan—a slick businessman dragging foolish investors along on ever grander, cash-burning bets. Every time one of his companies stumbles, Musk seems to have another spectacular thing to announce—a new mode of transportation, the space internet, or a Martian colony—to thrill and confuse. Is Musk trying to distract us from the troubling aspects of his companies, or are the doubters just the shortsighted, risk-averse people holding us all back from a fantastic future?

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Elon Musk is pushing the Tesla-SolarCity merger through despite naysayers and lawsuits

In an SEC form filed on Oct. 7, Elon Musk indicated that the company “is currently planning to raise additional funds by the end of this year, including through potential equity or debt offerings, subject to market conditions and recognizing that Tesla cannot be certain that additional funds would be available to it on favorable terms or at all.”

But in a tweet on Sunday, Musk walked back that statement and said neither SolarCity nor Tesla will have to raise equity or debt in either the end of this year or in the first quarter of 2017. In a revised form, filed on Oct. 11, the company changed the language to “Tesla may raise funds in the future, including through potential equity or debt offering.”

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Elon Musk makes cryptic comments about Tesla competing with Uber

Tesla CEO Elon Musk suggested Wednesday that he can create a car-sharing network that’s so good, customers will abandon Uber and other ride-sharing companies in droves to adopt it.

During an earnings call Wednesday, Musk was asked to explain whether his proposed car sharing network, dubbed the Tesla Network, would generate revenue for Tesla or help Tesla owners offset the costs of their vehicles. In response, Musk made some cryptic comments about the scope of his so-called “Tesla Network.”

Musk said people have been characterizing his car-sharing proposal as “Tesla versus Uber or Lyft or something like that. It’s not Tesla versus Uber, it’s the people versus Uber.” There was no follow-up question, so Musk’s statement was left hanging like that.

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Tesla Confirms-And Ends-Discounts, But Why Were They Offered In The First Place?

In an email sent to all employees, Tesla CEO Elon Musk has confirmed what some customers have been saying online for months; that the company was offering discounts on some new Tesla vehicles despite company policy that all customers pay 100% of the advertised retail price.

This discovery began when a customer posted on Reddit his dilemma: Tesla couldn’t deliver the P90 he purchased until the following week, but the salesperson wanted him to pay for the vehicle in full prior to delivery, or else he wouldn’t honor the discount they negotiated. The thread was shared with Musk on Twitter TWTR +0.17%, who responded immediately that the company never discounts.

It turned out that he was wrong.

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Coal Miner’s CEO Calls Tesla a ‘Fraud’ and Elon Musk Tweets It

For its part, Tesla was downgraded to neutral from a buy rating by Goldman Sachs Group Inc. last week. The company’s shares have dropped as it moves forward with its plan to buy rooftop solar installer SolarCity Corp., which some analysts have deemed a risky bet. Musk is chairman of SolarCity, and his cousin Lyndon Rive serves as its chief executive officer.

Customers who purchase an electric vehicle can claim a $7,500 federal income tax credit and several states offer additional incentives, according to Tesla’s website.

Tesla will let Musk’s tweet “stand as a comment,” spokeswoman Alexis Georgeson said in an e-mail. The Clinton campaign didn’t immediately respond to a request for comment.

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