Serial entrepreneur Elon Musk has just endured the toughest week in what has been a whirlwind year, but the Tesla boss refuses to let that stop him from pondering a future that could involve everything from electric planes to hyperloops and driverless vehicles.
The past week has, however, further enlightened Musk as to the challenges of running a company with the kind of hype previously reserved only for Apple. It means any news – good, bad or indifferent – is greatly exaggerated.
In the latest case, the third Model S fire in two months led investors to flee the company’s stock as rumours swirled about the safety of Tesla’s flagship car.
In a Q&A session at the Opportunities for Tomorrow conference in New York, Musk points out, with constrained frustration, that there are over 150,000 car fires a year – the overwhelming majority of which are left unreported.
“The reaction is inaccurate and unreasonable,” he stresses.
While the latest episode in Tesla’s history has not been the most jubilant, it doesn’t take away from the achievements of the year, which include turning its first ever profit; seeing its stock rise as much as 474 per cent; and achieving record high reviews all while receiving (largely) great press and making a splash in popular culture.
The share price, however, doesn’t have Musk jumping for joy like you would expect.
“I actually think the high stock price is somewhat distracting,” he divulges.
“In fact, I went on record saying I thought the price was higher than we had any right to deserve.”
It’s this refreshing honesty that has endeared him to many, but that’s not to say he doesn’t believe strongly in the company.
“I do think long term that the value of the company will be well in excess of [where it is now],” he contends, noting that it has fallen considerably off highs in recent weeks – 22 per cent in a three-day period alone last week.
To achieve the lofty valuations ascribed, Musk needs to take Tesla from potential gamechanger to financial success story and that won’t be easy.
In the near-term, the EV maker needs to boost production of the Model S to meet demand, while longer term it needs to find a way to achieve the ultimate goal of producing a mass-market electric car.
To date, no electric vehicle has captured the imagination at a low enough price point to draw mass adoption. But Musk remains adamant it can be done.
And if he is right about where the world is heading, Tesla is getting in on the ground floor of a major shift in the world’s transport sector.
“I feel confident in predicting in the long-term that all transport will be 100 per cent electric, with the ironic exception of rockets,” he proclaims.
Musk finds it strange that we aren’t already there.
“I think people will look back on this era like we look back on the steam engine,” he asserts.
Musk, who is widely credited as the inspiration for Robert Downey Jr’s portrayal of Iron Man, has been compared to both Steve Jobs and Henry Ford as an innovator of the highest order. To date, his success stories include being co-founder of PayPal as well as being creator of SpaceX and Tesla Motors, but he appears intent on not stopping there as shown by his recent design for a hyperloop.
Next up could well be planes, with the Silicon Valley-based exec revealing a deep-seated passion while talking up the “awesome design” of his favourite aircraft, the 747.
Questioned as to whether this enthusiasm would one day lead him to design and build aircraft, Musk doesn’t shy away from the potential.
“I do think there’s an interesting opportunity to create a supersonic electric vertical take-off/landing jet and I think that would be really great,” he explains.
“If I was to have another company in the future – which will not be anytime soon – I think that will be the thing to do.”
He even confesses to having a design in mind.
Musk isn’t so sure about the concept of a flying car, however, suggesting “it might not be what people want”. The Tesla boss believes there’s significant challenges to overcome such as the risk of mechanical failures (would cars crash land?), noise pollution and the effect on the skyline.
The driverless car, something Google is working heavily on, appears likely to be seen long before a flying car, though Musk explains that it won’t be in the near-term either.
“The threshold for something to be autonomous is it has to be much safer than a person driving a car because it will be held to a higher standard,” he explains, noting that it gets exponentially more difficult to make improvements.
Pressed on timing, Musk says it would be at least a decade away, though we might see it in 20 years. And no one would put it past him teaming with his good friend at Google, chief executive and co-founder Larry Page, to take it to the masses first.
But that’s only if electric planes and hyperloops remain on Musk’s rather elaborate backburner.
Daniel Palmer is Business Spectator's North America correspondent. @Danielbpalmer