comscore Despite roadblocks for Tesla, Elon Musk is moving full speed ahead

Despite roadblocks for Tesla, Elon Musk is moving full speed ahead

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FREMONT, Calif. >> Elon Musk, chief executive of Tesla Motors, sat in a glass-walled conference room here last week in the company’s auto factory. Around him, workers and robots were building the $70,000 luxury vehicles that have redefined how people think about electric cars.

But autos are just one of Musk’s many projects. A South African-born billionaire and entrepreneur, he is the top investor in the country’s largest provider of rooftop solar power, runs a private rocket company, and in a blog post Wednesday pledged to create a ride-sharing car service and battery-powered trucks and buses.

And then there is his plan for the world’s largest battery factory. Based in Nevada, the Gigafactory is to be unveiled this week.

“What’s going to be really crazy about the Gigafactory is not just that it’s giant,” Musk said. “You can’t change the world with tiny factories that move slowly,” he said. “We need big factories with high-velocity output.”

Scale and speed are watchwords for Musk and his save-the-world view of business, which addresses some of the biggest pressure points in climate change. Musk wants to create an alternative to fossil fuels by popularizing solar power and by using batteries to store energy from the sun and wind to power homes, cars and businesses at any time of day and in any season.

But while his clean-energy empire is viewed as visionary — even urgently necessary — by scientists worried about climate change, it has hit a major speed bump. In late June, federal safety officials opened an investigation into the death of Joshua Brown, who was killed when his Tesla Model S smashed into a tractor-trailer that had turned across its path.

It was the first known fatality of someone operating Tesla’s Autopilot system, a technology meant to prevent such disasters by controlling both steering and braking. Tesla acknowledges that neither the car nor Brown engaged the brakes, and it says that the Autopilot system failed to see the white trailer against a bright Florida sky.

Critics say Tesla was premature in putting the collision-avoidance system on the market in October — technology that Musk hailed soon after as “probably better than a person right now.”

And they say Tesla sent a dangerous message by calling it Autopilot, suggesting that the system could operate the car by itself, even though it requires drivers to stay completely engaged in case something goes wrong.

“Tesla shouldn’t make guinea pigs of its buyers,” said Joan Claybrook, a former administrator of the National Highway Traffic Safety Administration.

In essence, critics say, a company bent on speed needs to understand when to slow down. But Musk said a regret of his was not having introduced Autopilot even sooner.

With a view of the Tesla factory floor, and searching an invisible horizon as he collected his thoughts, he said Brown’s death was “very sad.” Still, the technology enhances safety, he insisted, and one death in what the company counts as 140 million miles driven using Autopilot does not undermine that idea.

“The easy decision would be to, or easier, I suppose, from the standpoint of minimizing attacks and criticism, would be to delay it and try to wait for some point where it’s theoretically better,” Musk said of Autopilot. “But if you wait for any point past the point that it’s better than the cars that exist, you’re making a decision to kill people with statistics.”

But many on Wall Street say it matters little whether Tesla changes the world if it also keeps losing hundreds of millions of dollars a year. Electric utility companies also view Musk warily, filing regulatory challenges to his bid to revolutionize the way energy is generated, transported, stored and paid for.

In June, Tesla announced a bid to take over SolarCity, which is valued at roughly $2.6 billion. Musk, the SolarCity chairman, described the acquisition as a way to complete his vision of a single company capable of providing solar power, electric cars and battery storage.

Although many in the financial community dismiss the merger proposal as mainly a way for Musk to have Tesla shareholders protect his investment in SolarCity, environmentalists say the consolidation plan makes a lot of sense.

Musk devotees say his great talent is taking green-energy ideas, which others have long discussed in theory, and turning them into realities.

“He makes a reasonable bid to be the Henry Ford of this era,” said Bill McKibben, the environmental activist and author. “He’s trying to kick off the mass market for renewable energy.”

To help make his electric cars less expensive, Musk is intent on picking up the pace at Tesla’s car factory. It produces 2,000 cars a week, only about a third as many as a conventional automaker’s factory might crank out in the same period.

Ramping up production is crucial to the next stage of the master plan: building a lower-cost version of the Tesla car. The new Model 3, which will be priced at $35,000 — half as much as the Model S — is expected to come out at the end of 2017 and already has 315,000 orders.

Musk has positioned Tesla as an agile responder that can help consumers save the planet while the policymakers are still drafting position papers. Still, he has had his share of government help.

Along with benefits like government subsidies to consumers of solar panels and electric cars, Tesla received $465 million in loans in 2010 from the Energy Department to work on fuel-saving vehicle technology. Those loans were repaid in 2013.

And it is with heavy financial assistance from New York state that SolarCity is building a 1.2-million-square-foot factory in Buffalo. (Tesla points out that oil and gas companies benefit from far greater subsidies).

Even if Tesla meets its goals, of course, Musk alone cannot reverse climate change. If Tesla winds up with a half-million of its cars on the road in the next three years, for example, that would be a scant fraction of the country’s more than 260 million motor vehicles.

“Will these cars make a meaningful difference themselves? No,” David Keith, an assistant professor at the MIT Sloan School of Management, said of Tesla. The greater influence, Keith said, is cultural.

“It’s the first time, possibly ever,” he said, “that a green product, with significant environmental credentials, has been the thing that everybody wanted.”

One nagging question about the Tesla quest involves the company’s reliance on lithium-ion batteries. The chemistry can be volatile, and several early Teslas caught fire before the company built a titanium shield under the vehicle to guard against fire or damage.

Another question: Can the batteries, even at the Gigafactory’s massive scale, be made cheap enough to persuade most consumers to kick their fossil-fuel habit?

“He’s got to get a little lucky,” said John B. Goodenough, who turns 94 on Monday, the physicist who helped pioneer the rechargeable lithium-ion battery at Oxford University in the 1970s and ’80s. “I do give him credit just for audacity.”

Musk says his ventures should eventually be judged on “the degree to which they have accelerated the advent of sustainable energy.” If he speeds up adoption by five to 10 years, he said, that would be a good outcome.

“I honestly don’t really care about business all that much,” said Musk, whose net worth Forbes estimates to be $12.5 billion. “It’s not really my first motivation.”

Yet Tesla exists in a business world, where many competitors and critics may be rooting for his failure. The Autopilot story, and the death of Joshua Brown, gave them a narrative with more than money at stake.

“Things are like especially intense right now,” Musk acknowledged.

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