The VW Scandal is growing in intensity and its repercussions are rippling across the globe. It’s widely predicted that the electric vehicle market will get a boost from this diesel disaster. Prius drivers may be feeling smug, but what of electric car makers like Tesla?
Yesterday, the BBC invited me to join the World Service’s Business Matters to discuss the scandal and its implications on the auto industry. Having attended last week’s launch of Tesla’s Model X all-electric SUV – where CEO, Elon Musk emphasized the company’s focus on air quality – I shared my perspective and that of George Blankenship, former Tesla VP, whom I interviewed at the launch.
Host of the BBC’s Business Matters, Fergus Nicoll, asked me:
“Is there schaudenfraude in the U.S. auto industry as VW scrambles?” BBC’s Fergus Nicoll
Here’s a transcript of our interview, edited for length and clarity.
Fergus Nicoll: Thursday is likely to be another painful day for the carmaker, VW. On Capital Hill, its US president and CEO, Michael Horn is scheduled to testify…he’s not the only one in the hot seat. His counterpart in South Korea, local VW boss, Johannes Thammer is due to attend a parliamentary audit in Seoul in about an hour from now. It’s all about the emissions scandal of course…
Let’s get Alison van Diggelen with us from Silicon Valley. Is there schadenfreude in the US auto industry as VW scrambles or is it: there but for the grace of the EPA go we?
Alison van Diggelen: Good to join you Fergus. I think the former. I was at the Model X launch last week in Silicon Valley and Elon Musk referred to it obliquely – about their work on a new air filter and how “air quality is very important” to them. So there is definitely a bit of schadenfreude.
I spoke with George Blankenship, former Tesla VP…he actually addressed the issue of (VW) cheating straight on. We have a clip here:
George Blankenship: I think his (Elon Musk’s) message has always been: the reason he’s doing this is to save the planet. Everything he does rolls up to that. Everything for him, whether you look at SolarCity, Tesla, SpaceX…it’s all about the survival of this planet and the atmosphere is what’s going to make it possible to live here for a long time, or not.
Alison van Diggelen: Any comment…on the VW scandal and their attitude to emissions?
George Blankenship: It’s unfortunate that others feel that they have to do things like that to try to compete. It’s the absolute opposite of what Tesla does…. Tesla comes up with a problem: we can’t get the falcon wing doors to work…we need sonar that goes through metal. They find a solution. It’s unfortunate when another company feels like they have to do something like that, as opposed to taking that same energy that they used to come up with that kind of a solution and put it into a solution that could have done something ground breaking in the car.
Elon Musk handed over Tesla Model X keys to five lucky new owners in Fremont last Tuesday. Thanks to the super sleuth investigation work of Dana Hull and Evan Adams, we’ve identified the first six Model X SUV buyers:
#1 Elon Musk
#2 Steve Jurvetson
#3 Mark Templeton
#4 Sergey Brin
#5 Mark Tebbe
#6 Ira Ehrenpreis
Tesla Board member, Steve Jurvetson, pictured above with Elon Musk, is the owner of the first Model S. He told me this week that Elon beat him to #1 this time round, by producing a check for the Model X at an early Tesla Board meeting.
I interviewed some of the heady buyers – and would be buyers – at the launch event. Several had come as far afield as Michigan, Florida and San Diego. Here’s my very small non-scientific study (I mean, how many people can you talk to when music like Lana Del Rey’s “Young and Beautiful” is blaring all night?) I have identified four types of Model X buyer:
1. The Electric Vehicle enthusiast
Mark Templeton, CEO of Citrix was the delighted owner of Tesla Model X number 3 and is planning to ship his SUV back to Florida. Here’s what he told me backstage:
“Once you go electric, you never want to go back!” Mark Templeton
2. The car collector
Several people I spoke with said they already own the Tesla Roadster and the Model S, so buying the Model X would be the finishing touch on their “Tesla Triple Crown.”
3. The safety-first, anti-minivan family
Eric (who wouldn’t share his last name) is an East Bay father of three. He told me that Tesla’s safety record and the Model X’s seven seats was a big attraction for him and his wife. How could you think of doing the school carpool and the soccer runs without one? He put a $5,000 deposit down in December 2014 and thinks he’s about 15,000th on the waiting list. He’s happy to wait, but he’s not willing to pony up for the ludicrous mode and the hefty price premium it commands.
“I want the functionality of a minivan and the style of a high end car, but I will never ever buy a minivan.” Eric (East Bay)
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.(Tesla CTO JB Straubel and family get some stroller assistance from Elon Musk, Photo: Fresh Dialogues)
4. The Elon Musk fan club
These are the people who talk about Elon Musk in whispered tones, who can’t mention his name without drawing comparisons to the genius of Thomas Edison or Steve Jobs. These are the people who’d buy a plant pot or garbage disposal from Elon Musk, if he was involved in its creation.
Of course, it goes without saying that having a high income (or net worth) is a prerequisite to buying the Tesla Model X. Perhaps even ludicrously high? Did anyone say 1%?
The SUVs starting price is about $80,000, though the ones that changed hands on Tuesday came fully loaded at $132,000 plus.
For those without that kind of pocket change, you’ll have to hold your breath for the long awaited $35,000 Model 3. Musk says they’ll be releasing details and taking orders March 2016. I wonder who’ll be first in line this time?
Read more about Tesla and Elon Musk at Fresh Dialogues
Last night, the long awaited Tesla Model X was launched and Elon Musk took great pleasure in underlining its clean air qualities. Musk reiterated the mission of Tesla: to accelerate the advent of sustainable transport and show that any car can go electric. But he couldn’t contain a smile, as he talked about air quality and referred to “recent events” i.e. the VW DieselGate scandal.
Musk showed off the SUV’s giant air filter (10 times the size of a typical one) and said:
“Recent events have illustrated the importance of air safety…(in the Model X) you can have air quality levels comparable to a hospital operating room.”
Musk then got somber, put on his superhero hat and showed the massive crowd estimates of how air quality can reduce life expectancy in some of the world’s most polluted cities: Beijing, 22 months; Los Angeles, 8 months and Paris, 7 months.
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According to Musk, using the high quality “X-size” air filter plus a smaller one (still larger than an average car’s air filter) gives the Model X a 700 fold improvement in city smog filtering. The company claims it’s also 300 times better at filtering bacteria, 500 times better at filtering allergens, and 800 times better at filtering viruses.
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But the biggest cheer of all came when Musk made this surprise announcement:
“If there’s ever an apocalyptic scenario, you just press the bio-weapon defence button – this is a real button.”
I asked George Blankenship, former VP at Tesla, about Tesla’s clean air focus.
“Who else is going to think in that magnitude with something as normal as an air filter? These are the kinds of things that Elon pushes to the limit and delivers products that no one else can deliver. The reason he’s doing it is to save the planet. It’s all about the survival of this planet and the atmosphere.” George Blankenship
We discussed how VW’s emissions cheating scandal might impact electric car makers like Tesla.
“It’s unfortunate that others feel they have to do things like that in order to compete. It’s the absolute opposite of what Tesla does…they find a solution. It reinforces that innovative companies that come up with a solution that others don’t…there’s a reward for it: 5 star crash ratings, cleaner air than a surgical room. That’s what innovative companies do as opposed to companies that try to figure out how to bend the rules to get an advantage.” George Blankenship
After a thorough tour of the Model X features, including the elegant falcon wings, Elon delivered keys to some of the first Model X buyers. This time round, Elon beat his friend, and first Model S owner, Steve Jurvetson and got the number one Tesla Model X. There’s definitely admiration, perhaps a little envy, captured in my photo below.
Update: Jurvetson told me this morning that Elon had a check made out in advance at an early Tesla Board meeting, to make sure he secured the first Model X.
Read more about Tesla and Elon Musk at Fresh Dialogues
The new Elon Musk biography by Ashlee Vance will “likely serve as the definitive account” of the most successful entrepreneur in the world, writes Jon Gertner in the New York Times. But it can also be read as a manual of how to succeed in business. Here are six big lessons for entrepreneurs, young and old:
1. Think Big
While Musk was at college, he decided the three things that would have the biggest positive impact on the human race were: sustainable energy, the Internet, and making life multi-planetary.
Here’s how Vance describes Musk’s big thinking:
“What Musk has developed that so many of the entrepreneurs in Silicon Valley lack is a meaningful worldview. He’s the possessed genius on the grandest quest anyone has ever concocted. He’s less a CEO chasing riches than a general marshaling troops to secure victory. Where Mark Zuckerberg wants to help you share baby photos, Musk wants to…well…save the human race from self-imposed or accidental annihilation.”
This passage comes early in the book, and feels as though Vance has been drinking Musk’s Kool Aid. By the last page, however, he’s painted a vivid and balanced picture of a driven man, focused intently on changing the world in a big way, no matter the cost to himself or his family (see No.6 below). So, if you want to succeed like Elon Musk, don’t waste time building a widget that’ll be 10% better than the competition:
Think big, really big, and go for it.
2. Learn to be a Better Boss
Elon Musk was ousted as CEO from two early startups Zip2 and X.com (the precursor to PayPal) because he was a bad boss. In his early days, Musk was a controlling, micro-manager whose “one upmanship” tactics were brutal.
Vance writes,
“Musk’s traits as a confrontational know-it-all and his abundant ego created deep, lasting fractures within his companies.”
According to a colleague at Zip2, he’d rip into junior and senior executives alike, especially when employees told him that his demands were impossible.
“You would see people come out of the meetings with this disgusted look on their face…You don’t get to where Elon is now by always being a nice guy, and he was just so driven and sure of himself.”
These days, he’s still very demanding but has got better at being a decent boss at Tesla and SpaceX and his longtime employees are fiercely loyal.
Of course, part of being a good boss is inspiring your team with an awesome mission (see No.1 above) and articulating that clearly. Early employees of SpaceX were told that “the mission would be to emerge as the South-west Airlines* of Space.” More recently of course, the Mars mission dominates the company’s focus. Who wouldn’t be on board with the mind-blowing goal of making humans a multi-planetary species?
So don’t fret if you’re not getting “Boss of the Year” awards in your early days, but learn from your mistakes, and motivate your team with a grand vision.
3. Hire with Care, Fire fast
Musk is renowned for hiring top talent and for several years, he even insisted on personally interviewing employees fairly low on the totem pole. For key technical hires, once he decides he wants someone, he’ll go above and beyond to hire them. He even cold-calls them himself. A SpaceX employee recalls receiving a call from Musk in his college dorm room and thinking it was a prank call.
But on the flip side, if you’re not a fit for the team, then you’ll soon know about it, according to Steve Jurvetson, a Tesla, SpaceX board member and close ally to Musk.
“Like (Steve) Jobs, Elon does not tolerate C or D players. He’s like Jobs in that neither of them suffer fools. But I’d say he’s nicer than Jobs and a bit more refined than Bill Gates.”
The lesson: hire strategically with great care, and if an employee doesn’t fit, don’t wait.
Some of his “bombastic counteroffensives” worked, others were arguably counter productive and alienated potential allies and supporters.
Yet Vance also offers a more sympathetic interpretation of his tirades as “a quest for truth” as opposed to pure vindictiveness. As Vance writes,
“Musk is wired like a scientist and suffers mental anguish at the sight of a factual error. A mistake on a printed page would gnaw at his soul – forever.”
Although taking things personally and seeking war has generally worked for Musk, it’s a highly risky strategy. Setting the record straight is one thing, but how many bridges can you burn? One key consideration is this: going to war demands a lot of time and energy which might be better spent on getting your mission accomplished.
Choose your battles carefully.
5. Have a trusted assistant
Ashley Vance describes Musk’s long-time assistant Mary Beth Brown as:
“A now-legendary character in the lore of both SpaceX and Tesla….establishing a real-life version of the relationship between Iron Man’s Tony Stark and Pepper Potts. If Musk worked a twenty hour day, so too did Mary Beth…She would emerge as the only bridge between Musk and all of his interests and was an invaluable asset to the companies’ employees.”
Sadly for Musk, she’s now moved on, but having worked with her briefly in 2012/13 (to arrange an in-depth interview with Musk), I can attest that she was very charming and an excellent surrogate for Musk. She represented him well in a professional and personal capacity.
Read more about her in the biography and try find someone as loyal, talented and hard-working to be your right-hand man or woman. Good luck!
6. Work hard, very hard
Not only does Musk lead two hard-driving companies (which are 300 miles apart) – SpaceX (L.A.) and Tesla (Silicon Valley) – he’s chairman of SolarCity, and has five boys, two ex-wives and a tight circle of friends, that includes Google’s Larry Page. He claims to sleep an average of six hours a night, but almost every waking hour is devoted to his businesses. His ex-wife Justine Musk, describes his work ethic like this:
“I had friends who complained that their husbands came home at seven or eight. Elon would come home at eleven and work some more. People didn’t always get the sacrifice he made in order to be where he was. He does what he wants, and he is relentless about it. It’s Elon’s world, and the rest of us live in it.”
The only regular downtime he allows is to indulge in long showers, but even then, it’s really work. He says that’s when he has most of his innovative ideas.
So, the lesson for you is the same as that espoused by pioneering giants like Thomas Edison and Andrew Carnegie: there’s nothing like good old fashioned hard work.
Note: Although Musk comes over as a hard-driving maniac in this biography, he does have a more sensitive side. You can see this for yourself in this candid interview. He comes close to tears several times.
Yet the biography is already courting controversy. Today Musk said one passage about his attitude to employees and childbirth was “total BS and hurtful.” He addedthat Vance’s book was “not independently fact-checked” and should be taken “[with] a grain of salt.”
So is there a definitive guide to Musk’s remarkable life? One that doesn’t need fact checked or taken with a grain of salt? You could start with a description of his life from the man himself.
As far as I know, this is the first time Elon Musk has shared his whole life story, so candidly, even tearfully, in front of a live audience.
Watch the video or read the transcript, as Musk takes us on a journey from the suburban streets of South Africa to the tech mecca of Silicon Valley…and beyond. He tells us about his teenage “existential crisis” and his bookish quest for the meaning of life; how the retirement of NASA’s space shuttle both upset him and inspired his space transport startup SpaceX; and why he became the reluctant CEO of electric car company Tesla Motors.
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Interview highlights and key turning points in his career:
The Rebellious Child: Musk grew up in South Africa. At age 6, he desperately wanted to attend his cousin’s birthday party, but was grounded for some long-forgotten transgression. How did he get there? (This was probably the first of his many rule-breaking adventures.)
“It was clear across town, 10 or 12 miles away, further than I realized actually, but I just started walking…I think it took me about four hours…My mother freaked out.”
The Iron Man Inspiration: He was a huge fan of comics and read Iron Man comics. Did he ever imagine he’d be the inspiration for Robert Downey Jr’s movie character, Tony Stark?
“I did not. I would have said zero percent chance…I wasn’t all that much of a loner…at least not willingly. I was very very bookish.”
The Hitchhikers Guide to the Galaxy: How did the novel fire his imagination?
“I was around 12 or 15…I had an existential crisis, and I was reading various books on trying to figure out the meaning of life and what does it all mean? …I read Hitchhikers Guide to the Galaxy and it highlighted an important point which is that a lot of times the question is harder than the answer. And if you can properly phrase the question, then the answer is the easy part. To the degree that we can better understand the universe, then we can better know what questions to ask. Then whatever the question is that most approximates: what’s the meaning of life? That’s the question we can ultimately get closer to understanding. And so I thought to the degree that we can expand the scope and scale of consciousness and knowledge, then that would be a good thing.”
Why was Silicon Valley his mecca at age 17?
“Whenever I read about cool technology, it would tend to be in the United States…I wanted to be where the cutting edge technology was and of course, Silicon Valley is where the heart of things is…it sounded like some mythical place.”
Why did his startup X.com (the precursor to PayPal) come close to dying in 2000?
“The growth in the company was pretty crazy…by the end of the first four or five weeks we had a hundred thousand customers and it wasn’t all good…we had some bugs in the software…Various financial regulatory agencies were trying to shut us down, Visa and Mastercard were trying to shut us down, eBay…the FTC…there were a lot of battles there. (But) we had a really talented group of people at PayPal…It worked out better than we expected.”
After making over $150M from PayPal, why not just buy an island and relax?
“The idea of lying on a beach as my main thing sounds horrible to me…I would go bonkers. I’d have to be on serious drugs…I’d be super duper bored…I like high intensity.”
On the seeds of SpaceX
“I always thought that we’d make much more progress in space…and it just didn’t happen…it was really disappointing, so I was really quite bothered by it. So when we went to the moon, we were supposed to have a base on the moon, we were supposed to send people to Mars and that stuff just didn’t happen. We went backwards. I thought, well maybe it’s a question of there not being enough intention or ‘will’ to do this. This was a wrong assumption. That’s the reason for the greenhouse idea…if there could be a small philanthropic mission to Mars…a small greenhouse with seeds and dehydrated nutrients, you’d have this great shot of a little greenhouse with little green plants on a red background. I thought that would get people excited…you have to imagine the money shot. I thought this would result in a bigger budget for NASA and then we could resume the journey…”
On negotiations with the Russian military to buy two ICBMs
“They just thought I was crazy…I had three quite interesting trips to Russia to try to negotiate purchase of two Russian ICBMs…minus the nukes…I slightly got the feeling that was on the table, which was very alarming. Those were very weird meetings with the Russian military…’remarkably capitalist’ was my impression (of the Russians).”
Why he chose to create his own rocket company, SpaceX
“I came to the conclusion that my initial premise was wrong that in fact that there’s a great deal of will, there’s not such a shortage. But people don’t think there’s a way. And if people thought there was a way or something that wouldn’t break the federal budget, then people would support it. The United States is a distillation of the human spirit of exploration. People came here from other places…people need to believe that it’s possible, so I thought it’s a question of showing people that there’s a way…There wasn’t really a good reason for rockets to be so expensive. If one could make them reusable, like airplanes then the cost of rocketry (and space travel) would drop dramatically.”
How did the vigils for the death of the EV 1 help inspire Tesla Motors?
“It’s crazy. When was the last time you heard about any company, customers holding a candlelight vigil for the demise of that product? Particularly a GM product? I mean, what bigger wake-up call do you need? Like hello, the customers are really upset about this…that kind of blew my mind.”
“I tried really hard not to be the CEO of two startups at the same time…It’s not appealing and shouldn’t be appealing if anyone thinks that’s a good idea. It’s a terrible idea.”
On the idea for SolarCity
“Solar is the obvious primary means of sustainable energy generation…in fact, the earth is almost entirely solar powered today. The only reason we’re not a frozen ice-ball at 3 degrees Kelvin is because of the sun…”
Check back soon for more from Musk on:
where his inspiration strikes (hint: not just Burning Man)
how to build, motivate and retain an excellent team
George Blankenship: I think his (Elon Musk’s) message has always been: the reason he’s doing this is to save the planet. Everything he does rolls up to that. Everything for him, whether you look at SolarCity, Tesla, SpaceX…it’s all about the survival of this planet and the atmosphere is what’s going to make it possible to live here for a long time, or not.
1. The Electric Vehicle enthusiast
How did the vigils for the death of the EV 1 help inspire Tesla Motors?
