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Elon Musk: The dangerous entrepreneur

Elon Musk is as powerful as ever - and acts as erratically as ever. Until now, the Musk factor has been Tesla's greatest strength.
© Tesla
 

Within 15 years, Elon Musk has turned the ridiculed electric car start-up into the most valuable carmaker in the world, highly profitable and a role model for an entire industry on many levels. His space company SpaceX lands rockets on ships after transport flights into space. He drills tunnels, wants to upgrade the human brain with computer chips and even go to Mars.

With his radical visions and constant entertainment via his Twitter account, Elon Musk has become an icon of pop culture and capitalism in the 21st century in equal measure. Millions of fans admire him, even analysts and investors followed him almost blindly for a long time. His incredible wealth - currently around 200 billion dollars - seems to many to be the ultimate proof of his uniqueness.

But the myth is crumbling. Elon Musk now wields so much power and is so unpredictable that many people, even those closest to him, find it scary. In addition to his economic dominance, his military influence is also growing. With SpaceX, Musk develops satellites for the US military that are elementary for American defence systems against hypersonic missiles. Without the Starlink satellite system, which Musk also controls, Ukrainian soldiers would be severely limited in the war against Russia. He has threatened to simply switch off the satellites - after all, he was met with opposition in Ukraine with his proposal to please leave occupied Crimea to Russia.

Sometimes former executives talk about Elon Musk like a toddler having a tantrum. From time to time, the Tesla boss is seized by "negative emotions", says one of the former executives. Fear" then spreads in the room, Musk becomes "unpredictable". Even loyal lieutenants can be fired from one second to the next in such moments; the richest man in the world thinks nothing of advance warnings. Previous merits: irrelevant. The rampages of Elon Musk  have long been known in Tesla circles. Outside of it, only a few have been interested until now. 

But now Elon Musk also rules Twitter. He practically runs the most important public communication platform in the world in autocracy, the co-investors have nothing to say. The richest man on earth is thus finally also becoming a political figure, more powerful than any other entrepreneur of his time - and more dangerous.

Musk's impulsive behaviour strengthens the unease, it is seen by critics as proof that "the idolisation of innovators has gone completely off the rails", as marketing professor Scott Galloway from New York University says. Their company, SpaceX, should distance itself from Musk, employees demanded months ago after Musk publicly mocked allegations of sexual assault at SpaceX; Musk had become "a source of embarrassment".

Meanwhile, doubts are also growing among backers of Tesla, by far the most important of Musk's five companies. Since its high in November 2021, the company's stock market value has lost about 50 per cent. The enthusiasm for Musk threatens to turn into the opposite. The months of wrangling over the Twitter takeover and Musk's failed attempt to escape the deal showed the entire globe how haphazardly the electric hero sometimes acts.

The magic of Elon Musk - it is fading. And more and more critics and former admirers are asking themselves: what risk does Musk pose for his companies? Tesla is a one-Musk show: few other companies in this category have so much riding on a single person. Tech companies like Apple, Alphabet or Amazon were also strongly shaped by their founders. But long before they came anywhere near Tesla's valuation regions, professional leadership teams established themselves. Amazon CEO Andy Jassy had been with the company since 1997 before taking the top job in 2021. Apple CEO Tim Cook joined in 1998 - and many in the leadership circle have been there much longer.

At SpaceX, Elon Musk has a long-time confidante in Gwynne Shotwell, who manages the company on a day-to-day basis. But Tesla, with around 100,000 employees about ten times the size of SpaceX, lacks an experienced management team. Instead, at least 26 managers and two female managers report directly to Musk; and they are swapped regularly.

In March, Musk set about acquiring Twitter. Again, he acted impulsively, only this time it was a $44 billion takeover. What was also new was that Musk's routines were on display for all to see this time. When he tried to wriggle out of the deal and the matter went to court, private text messages also became public. Financially, the deal is a disaster for Musk anyway. He "paid too much", the Tesla boss himself admits. It was four to five times Twitter's actual market value, estimates Richard Greenfield, media equity analyst at LightShed Partners. The interest payments of around one billion dollars per year that are now due already exceed the operating cash flow of 630 million dollars that Twitter generated last year.

Musk is caught up with reality, including autonomous driving. He sells a driving assistance system that must always be monitored by the driver as "Autopilot" or "Full Self-Driving", charging $15,000 for it in the US. But most experts consider it practically impossible that the good three million Teslas that Musk has sold with the hardware will ever drive autonomously. The hardware that has been installed since 2016 is far too weak. The new, stronger one is also considered insufficient.

Meanwhile, according to media reports, not only the US National Highway Traffic Safety Administration (NHTSA) but also the US Attorney General's Office is investigating Tesla. It is about the extent to which the false marketing promises have promoted partly fatal accidents because Tesla drivers relied on the promises. 15 deaths from Autopilot crashes have now been documented. 

The public debate surrounding the Twitter takeover and the new unease about Musk's political power are becoming a danger. The Tesla brand is intimately linked to Elon Musk. If Musk's rockets supply space stations, this also radiates onto Tesla's image and course. Conversely, every tweet from Musk, a private citizen, becomes a public statement from the company. "Musk is Tesla, and Tesla is Musk," notes analyst Dan Ives of investment bank Wedbush. For better or worse. For the Tesla brand, another Musk drift would be a disaster.