By Russ Mitchell
Los Angeles Times
Those who pay close attention to Elon Musk tend to fall into one of two camps.
One camp worships him as a modern-day hero at a time when heroes are in short supply. He’s a green-energy wizard devoted to saving humanity from greenhouse gas destruction, and if that proves impossible, he wants to create colonies on Mars to save the human race from total destruction. He’s a brilliant entrepreneur who can wipe clean the ossified auto and space industries with paradigm-shifting innovations, Silicon Valley style. He reignited interest in space exploration. He made electric cars sexy.
The other camp believes none of that and denigrates Musk as a big talker and government-subsidy hound who promises far more than he’ll ever be able to deliver. Critics blast him as a hypocrite who traverses the globe in his greenhouse-gas-spewing private jet and contend he uses financial legerdemain to distract from the fact that he’s unprofitably burning through other people’s billions while making himself rich.
In his new book “Ludicrous: The Unvarnished Story of Tesla Motors,” journalist Edward Niedermeyer hews close to the critics’ interpretation, while also giving Musk his due.
Potential readers should keep in mind that the book is about Tesla, the electric car and energy company, not a deep dive into Musk or his many other projects.
Niedermeyer possesses a deep understanding of how the auto industry works (and often doesn’t). He’s in a good position to assess the foibles of Musk as Tesla struggles to prove it can earn sustainable profits after 16 years of surviving on cash from lenders and investors with no return to show for it.
In the book’s introduction, Niedermeyer writes that “the more I questioned and the deeper I dug, the more I found evidence that the company’s popular image was a consciously constructed facade that concealed underlying dysfunction.”
The book details the CEO’s origin story: how Musk helped found fintech pioneer PayPal before he got fired and left with a pile of riches to finance Tesla Motors. The company had been founded by Martin Eberhard and Marc Tarpenning. They brought in Musk as a major investor, but he eventually ousted them. The origin story behind him, Niedermeyer turns to the meat of the book: Musk’s so-far-quixotic attempt to make money making cars.
Right now, auto industry consultants say, nobody in the auto industry earns a profit on electric cars. The batteries, while coming down in cost as sales rise, are still too expensive.
Musk thought he could apply Silicon Valley innovation to electric car making and Silicon Valley money-raising methods as well. He planned to scale up fast to get costs down and apply software techniques to product design and manufacturing to build better cars, cheaper.
Niedermeyer praises Musk for building an innovative culture and introducing new and important innovations to the auto industry — particularly over-the-air software, which can beam fixes and updates to Tesla cars via cell signal while capturing detailed customer data.
But Silicon Valley is known not only for innovation. It’s also become the world capital of business hubris, and that has not translated into high-quality automobile manufacturing at Tesla. Consumer Reports and other quality lists rank its cars low; its service centers are overwhelmed.
Auto manufacturing, Niedermeyer writes, is all about “planning, structure and regimentation.” Tesla, by contrast, has a seat-of-the-pants approach to problems, with “minimal cost controls and a constantly changing timeline.”
The Tesla story isn’t over. Musk plans to start selling semi-trucks, pickup trucks and a crossover vehicle. A new assembly plant, to complement its lone plant in Fremont, Calif., is set to open this year. It’s possible Musk will raise more cash in the financial markets.
Whether Tesla succeeds or fails, whether Musk ends up regarded as a hero or a clown, “Ludicrous” does a fine job of documenting the company’s story and setting the stage for what comes next.
