STAFF NEWS & ANALYSIS
Musk Hypes New Master Plan to Support Increasingly Ambitious Promises
By Daily Bell Staff - July 22, 2016

Tesla’s stock falls after Elon Musk reveals his ‘master plan’ … CEO Elon Musk, has a “master plan” for his company and for the future of electric vehicles and autonomous driving. After more than a week of teasing about its existence, Elon Musk revealed Part 2 of his “master product plan” for Tesla on Wednesday evening. Or, as he calls it, “part deux.”  -LATimes

A visionary and his master plan. Do we believe it?

We previously wrote about Musk HERE:

Elon Musk and Tesla Are the Face of Bubbling Stock Market, but Maybe Not for Long … It is true, that Elon Musk is considered by many to be a true visionary, but in our view, few visionaries turn their dreams into reality with $4.9 billion in government support.

That’s according to the LA Times last summer.

SolarCity, SpaceX and Tesla all received massive funding injections. Musk wasn’t appreciative of the estimates, calling the report “incredibly misleading and deceptive to the reader.”

But according to the Times, Tesla alone received $2.3 billion – and that was last year.

Musk’s companies make electric cars, sell solar panels and launch rockets into space. But none of them make any money. And these past weeks, as The Wall Street Journal pointed out, Musk has seen his publicity sour.

The souring had to do with Musk’s proposal to buy solar-panel manufacturer SolarCity Corp. – a move criticized by Tesla analysts and followers.

Not much later it became public knowledge that a Tesla Model S in self-driving mode crashed with a fatality.

We wrote, “Of course, none of this will probably put a dent in Musk’s progress so long as Tesla’s stock stays up.”

To try to guarantee that, Musk has announced a new “multiyear, four-pronged strategy.”

More:

[The strategy] includes new kinds of Tesla vehicles, expanded solar initiatives, updates on Tesla’s “autopilot” technology and a ride-sharing program.

Tesla’s stock Thursday morning was trading at $222, down about 3%. While the plan is bold and futuristic, financial analysts see it as vague with no hard timelines, a distraction from here-and-now concerns such as getting the upcoming Tesla 3 through the assembly line and onto the market.

Some surmised that the timing of the announcement was a way for Musk to distract from recent headlines that have raised concerns about Tesla’s autopilot function and its troubles hitting vehicle-delivery targets.

Is it possible that Musk has made his fabulous projections one time too many?

Karl Brauer, an analyst at Kelley Blue Book: “It’s sadly not a very unique or original plan. What he’s saying is, ‘I’m going to have autonomous vehicles that are purely electric driving around serving people’s transportation needs.’ Well, every automaker has already envisioned that, and many are already working toward it.”

Michelle Krebs, senior analyst at Autotrader: “As is typical, Elon Musk has laid out a grandiose plan for the future with no time frames and few specifics, and no mention of how and when Tesla will be profitable.”

The Times article rebuts criticism however. It points out that “Musk has emerged as the 21st century’s most audacious, best-known living entrepreneur, replacing the late Steve Jobs as the business world’s leading icon.”

The article cites his cars and his new company, SpaceX, as evidence of Musk’s genius. Also that NASA has given Musk tremendously profitable contracts. (We’re tempted to count that as yet another government giveaway, though admittedly most might not.)

Anyway, the article doesn’t get into Musk’s government funding. Most mainstream articles on the “most important entrepreneur since Steve Jobs” don’t.

And here, in a single quote, is the reason why Musk has such avid followers and, increasingly, determined detractors:

In his new master plan, Musk said, “We must at some point achieve a sustainable energy economy or we will run out of fossil fuels to burn and civilization will collapse. … The faster we achieve sustainability, the better.”

Good Lord. There’s plenty of energy in the world. Civilization is more likely to collapse from fedgov wars and overspending than a lack of “fossil” fuels – which are probably in part geological anyway.

Musk wants to achieve sustainability for the world (in part by traveling to Mars) but he might want to achieve it for his own companies first.

If by some chance you are interested in investing in a Musk production, please understand that he has started very few of his ventures, not even Tesla.

His primary business method seems to be to find companies favored by US federal government policies. He then buys the companies, or invests in them, and approaches fedgov for money.

As an entrepreneurial tactic, it’s reprehensible. As  practical matter it seems to have worked for him thus far.

But as we pointed out in our previous article, Musk may finally be reaching the end of his ability to survive on PR and government resources.

His business, at least some of them, are so big that they will actually have to rise and fall on the revenue they produce. And the stock market will stay up only for so long.

There are increasing elements of an obvious “hustle” about Musk’s various endeavors. People are starting to notice. When the stock market finally collapses, Musk will face significant challenges.

Conclusion: It will become clear, then, whether his businesses are real or imaginary, or possibly both.

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  • robertsgt40

    If not for billions in federal subsidies and accounting wizardry, Tesla would be in the toilet.

  • Samarami

    Capitalizing upon the conquerors’ capacity to capture the production of the captured (enslaved) is as old as history itself. The “sustainability” meme is merely one more of the innumerable gambits.

    It’s no doubt a good thing to expose each for what it is. But there comes a time when we all must promote individual anarchy, and urge readers and listeners to take the very first step: abstain from beans:

    http://www.anarchism.net/anarchism_abstainfrombeans.htm

    Sam

  • windsor1

    An entrepreneur is constantly looking for ways to reduce or eliminate personal risk. A guy like Musk can find other investors to share the risk or if there is an opportunity look to the gov’t for a grant. A journalist or critic of a successful entrepreneur might find seeking gov’t financing reprehensible but I am sure that his shareholders would find it reprehensible to avoid gov’t financing when it was available. Remember Solindra; gov’t cronies hopped on for a short ride and bailed out at a hefty premium before the total collapse. Would you prefer gov’t financing for these programs:
    – Paying researchers to play video games
    – A study to research the effects of cocaine on Japanese Quail
    -millions of dollars to train Chinese prostitutes to drink responsibly
    – 750k for a new soccer field for detainees at Guantanamo
    850k to film mountain lions on treadmills
    – $18 million to renovate a low traffic airport that serves a high end ski resort
    – an 800k NIH video to film food fights
    -$43 million on a natural gas filling station in Afghanistan that nobody uses.
    At least Musk is willing to participate in risky ventures that have a shot at creating jobs and new technologies. Reusable launch vehicles is a great idea that the gov’t itself does not want to get involved in through NASA. Musk will bring to bear efficiencies not possible with gov’t agencies. If he can pull it off it means a cheaper way to get people and material into space. His Tesla unit has developed state of the art storage batteries for solar applications. All Musk’s technology efforts are consistent with government objectives. If Musk doesn’t take the grant money, someone else will.

  • ashleydavy

    Well lets look at how much money is saved by USgov and Nasa for each launch of a similar size (small satellite, trip to space station etc)

    Spacex – $60 million per launch, no retainer.
    United Launch Alliance – $140 million per launch (until forced to drop price by Spacex), $1 billion/year retainer.

    Spacex broke the monopoly by ULA and now saves the USgov $80million per trip. They could actually save a billion a year too on top of that but ULA has powerful friends. I think you are looking in the wrong place for excessive government largesse. Poor article, poor research, poor conclusion.

    • We are a good deal more suspicious of Musk than you are.

      • ashleydavy

        Clearly.

        It’s probably quite suspicious too how his companies manufacture everything in the States? Whats up with that? Over 35000 employees across his businesses plus thousands of secondary jobs in external suppliers and subcontractors.

        Clearly the guy is a hard nosed businessman securing good deals for his companies and taking advantage of tax breaks when available. But singling him out while all other companies do the same, or a lot worse?

        I’ve noticed this special attention given to Musk. He has some very powerful enemies in very powerful industries who are firmly attached to government largesse such as ULA mentioned above. Here is a blog post about this type of activity from Nasa Watch. http://nasawatch.com/archives/2016/05/why-does-brad-s.html

        I’m afraid that the Daily Bell might itself have fallen victim to an internet meme….

  • stanleyk

    It’s high time that Elon Musk put a man on the moon.

    It’s been about 44 years since Apollo 17 and no other country has ever gone there.
    Apparently the Russians, Chinese, Japanese have no taste for silver or bronze medals. It should be almost trivial for Mr. Musk, given the advances of 5 decades of technology and the fact that it was done nearly half a century ago.

    Tesla’s stock price could literally go to the moon. Please think about it Mr. Musk–and get back to us.

  • georgesilver

    NASA, in my opinion, is one big money making scam. Take a deep breath….. space travel is NOT possible with present (or past) technology. The Apollo space capsule lacks huge rocket breaking ability against the Earth’s gravitational pull and it’s ridiculous shape would mean it would tumble to Earth burning up in the process.
    The ‘shuttle’ also has NO breaking rockets. Secondly the International Space Station is a scam… you only have to look at the videos to spot the wires attached to the “astronauts”. Plus living in what is tantamount to a sealed cess pit without any internal airlocks. All space walks are filmed at Space City Moscow in the huge water tank mock-up….. you can even spot an air bubble coming from one of the space suits. A friend who is a shareholder in a satellite placing company tells me it’s an in- secret that you can put things into space but you can’t bring them back without a huge rocket breaking force. Forget the Earth’s atmosphere as that is too close to the surface.

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