Archived how did elon musk make his billions? i know paypal rips off people a lot but what lse did he do? (AskVoat)
submitted ago by JonReed
Posted by: JonReed
Posting time: 3.4 years ago on
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Archived on: 9/29/2017 10:00:00 AM
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Archived how did elon musk make his billions? i know paypal rips off people a lot but what lse did he do? (AskVoat)
submitted ago by JonReed
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[–] JohnPaulJones 0 points 1 point 1 point (+1|-0) ago
I'm not saying what this guy does isn't valuable but to answer the question where does he get his money the answer is clearly government subsidies. Both Tesla and Solar City are losing money with market evaluations that make no sense and have largely only been able to remain open by the use of government subsidy. Space X is a bit of a wild card because they aren't public yet but much of the funding there is once again public money.
Acting on vision is great but pretending that what this guys career has amounted to is the "American Way" is BS. The American way unitl recently has been creating value and bringing products to market that people want to buy above the cost of bringing those products to market. Subsidies by the way aren't investments. We aren't going to get that money back. It's a transfer of money from public taxes to a private entity. There are plenty of firms working on many of the same issues (private space travel included). It turns out that this guy just gives the government the warm fuzzies.
[–] CrustyBeaver52 ago (edited ago)
Warm fuzzies:) Don't get me wrong - he is a big time insider - plenty of top contacts in inner circles - access to top classified materials - the whole nine yards.
The big thing about Space X is the lifting costs - space shuttle was something like $10,000 per kilo to lift an object into orbit - SpaceX does the same thing for $500 right now, and that is projected to drop to $50 - $50 opens the door to private industry in outer space - not unlike how the steam engine and steel rails opened the American interior to industrialization away from rivers - it is a really big deal - much more so than people realize. What private industry is waiting for right now is a reliable, low cost, heavy lift work horse - to do the heavy lifting that is required to enable the industrialization of space. That is what Musk is building - and the rocket is reusable.
The electric car thing is a different aspect - electric is dramatically more powerful and more efficient than oil in every way except for a few key areas - the big ones being storage and transmission. Production of electricity is practically free, totally green, and virtually unlimited... on the large scale. Smaller scale is entirely a different matter. Most of our vehicles now use oil because it is stored in barrels - it is easy to transport. Electricity storage and transport requires expensive batteries and expensive transmission lines.
Now the guy wants to mass produce cars but there are not enough batteries on the entire planet to do that - so he is building a battery factory to supply the batteries. These cars can serve a duel purpose as both transportation and energy storage - recharging at stations is time consuming and impractical - so better to charge them when they are parked - at home and at work - hence the investment in solar. Produced energy is stored in the car batteries, and also the same batteries at home and at work. It makes sense - and again, once it is scaled up it cuts costs dramatically. More importantly, it addresses the storage and transportation issues for electricity, and allows the elimination of the power grid to a decentralized and more robust power system. Big energy doesn't like that - but if Musk doesn't build it, somebody else will - the tech is already here. Oil will still be used - just not for transportation - we still need it for materials.
On the surface, Musk's ideas seem pie in the sky - but if you dig down into it you do find an actual business case for each part of what he is doing - a real financial competitive advantage exists here - and that is the path to real profit - THAT is what is attracting the heavy investment - they are not giving him the money because they like the way he cuts his hair.
Another thing to note about this - I don't know the Solar city guys - but Tesla is really Mitsubishi and they know how to build excellent cars - and SpaceX is pretty much really NASA - and they know how to build rockets as well as anybody on the planet - it's not like Musk is just pulling this shit out of his ass. There is a huge collection of the world's leading engineers involved in these projects. Yes he has insider contacts, and yes he has money coming in from all over the place - but these guys are building transformational technologies here - just like the invention of Railways transformed the world - Musk's inventions have the promise to achieve the same types of forward leaps.
Think Howard Hughes, Henry Ford, The Wright Brothers - this kind of thinking is totally, completely, iconically American - as is the usual public disbelief that goes hand in hand with this kind of entrepreneurship.
[–] JohnPaulJones 0 points 1 point 1 point (+1|-0) ago
He isn't Hughes, Ford, or Wright. Those guys built something from the ground up with their own ingenuity. Musk is essentially just using government funds to put together other peoples know how and doing it for a loss. While Space X is definitely the most viable option among his efforts post-paypal, it's not like Musk is in the lab doing this shit by himself. People have this overinflated sense of who he is. Nothing he has done post paypal has been in any way surprising. He took a bunch of government money to fund labs to pursue ideas that were essentially already out there. People having been working on solar cells, electric cars, and private space travel for a while now. It hasn't seen the success that Musk has had because it hasn't gotten the type of funding Musk has. Engineering for the most part isn't as magical as people think it is. If you throw enough money behind competent engineers you are going to see some measure of results. The issue here is Musk has created a largely undeserved cult of personality around himself.
Electric cars and solar cells are just technologies that aren't ready yet. They are great ideas on paper but the science hasn't been cracked yet (if it ever will). While we are getting incrementally better in both regards, his efforts by and large are a bit of a shell game. His electric car amounted to the government handing him a bunch of money to make cars for rich people on the premise that the technology would develop but the battery issue makes the technology at best under developed and in reality an ecological nightmare. Those things are hard to produce and even harder to dispose of. Long story short we just aren't close enough to the fundamental tech needed to make battery powered electric cars a good idea. Everyone involved knows this too. Solar cells are much of the same story. Musk took a bunch of money to fund Obama's war on coal. Solar cells have not been anywhere near efficient enough. This is why they needed ridiculous tax breaks otherwise the lifecycle payout remains a marginal positive or a net negative (depending on local energy costs). Solar cells (in America) remain only viable when people are willing to pay above cost for the benefit of being energy independent. SpaceX is more or less a result of defunding NASA's space efforts (to redirect funds into climate research). Once again handing over the intellectual property of the American people to private enterprise. This guys whole career here has been vastly overstated. His companies are vastly over priced bubble markets. Many of the smart investors are only investing because of the massive subsidy not the "magic" of Musk.