More than just a visionary, Elon Musk is a gambler.
But while his creation of rocket and electric car companies out of thin air built a solid corps of supporters, his latest venture is antagonizing those very same loyalists.
The entrepreneur billionaire’s decision to serve on President Donald Trump’s influential 16-member business advisory panel has set off a storm of criticism from liberals, many of whom demanded that he step down late last month when the president imposed a 90-day ban on immigrants from seven Middle Eastern and North African countries.
Much of the back-and-forth between Musk and his critics has played out on Twitter, a favored form of communication for the founder of Hawthorne-based SpaceX and Tesla.
A South African immigrant himself, Musk took to Twitter to calmly denounce Trump’s action, but he also chided activists who wanted him to take an aggressive stand.
“Activists should be pushing for more moderates to advise President, not fewer. How could having only extremists advise him possibly be good?” he tweeted.
Some Tesla customers reportedly canceled their luxury auto orders. And Musk’s Twitter page filled with angry messages:
“You have sold your brand to the devil. Wake up. We are watching,” one person wrote. Another messaged, “there are a *lot* of people who have been and will be damaged by his policies who may not forgive you for that.”
Futurist Alex Steffen captured the feeling of many angry customers with this tweet: “Hey @elonmusk, that squeak you’re hearing is @tesla’s brand integrity leaking out. Might want to patch the leak with a rejection of Trump.”
Tries to reassure supporters
But Musk doesn’t seem concerned about his gamble backfiring as he pursues his lofty ambitions. Even as Uber CEO Travis Kalanick stepped down from the presidential panel to avoid losing customers, Musk continued his regular meetings with Trump and key officials in his administration.
He reassured his fans that he was pushing for climate-change talks at the White House and also joined the nationwide legal fight against the immigration ban.
“Many in America don’t realize how proud they should be of the legal system. Not perfect, but nowhere is the cause of justice better served,” he tweeted.
Such customer criticism is one of the reasons most company leaders avoid politics as much as possible, said USC marketing professor and author Ira Kalb.
“Corporations with employees and stockholders should avoid the political trap if they can, since you usually cannot win going down that road,” Kalb said. “The problem is you have many different constituencies with different political beliefs. Whatever you say that is not down the middle or politically correct risks angering the ones that don’t agree.”
So why would this darling of the left do something to irritate so many environmental activists as he buddied up to Trump, a Republican who has called climate-change science into question?
A clean-air empire
On a sunny afternoon late last month in front of SpaceX headquarters, at a competition to advance his futuristic, pod-based transportation system known as Hyperloop, Musk made it clear that he’s less interested in politics than finding new ways to improve sustainable-energy transportation.
Arriving at the event with his mother, sister, and a group of children, Musk praised the work of 30 student engineering teams.
Then, despite the controversy swirling from the immigration order two days prior, he delved into his latest swashbuckling scheme.
“We started digging a hole on Crenshaw just in front of SpaceX,” he said. “We’re going to try to figure out what it takes to improve tunneling speed between 500 and 1,000 percent.”
Laughed off by tunneling engineers, Musk’s Herculean plan has been mocked as arrogant and ignorant. After all, why should he be able to do what generations of the world’s greatest engineers haven’t?
Cut from same mold as Trump
Like Trump, Musk takes big risks in hopes of big rewards, said Michael Genovese, director of the Institute for Leadership Studies at Loyola Marymount University.
“I think (Musk and Trump) are kind of cut from the same mold in the sense that their approach to life is you don’t get big rewards unless you take big risks,” Genovese said. “Musk is a risk-taker like Trump. He may very well be horrified by Trump, but he also sees an opportunity. It’s more than just business, it’s a game. He gets a thrill out of it; it’s a challenge: ‘Can I do what everyone says I can’t do?’ ”
Musk built his empire doing things that at first appear impossible.
SpaceX seemlessly recovered from a devastating Sept. 1 rocket explosion with a flawless launch last month and has another planned Feb. 18 mission from a brand-new Florida launchpad. SpaceX is the first private company to bring rocket boosters back from orbit intact — landing both on land and at sea and ready for reuse — so they can be reused at a fraction of the price of legacy aerospace companies.
And work already has begun on Musk’s plan to make it economically and technically feasible for humans to colonize Mars.
At the same time, Musk’s electric car company, Tesla, enjoyed its highest sales ever last quarter, though the company has been dogged by a campaign to unionize workers concerned about pay, safety and workplace conditions at its auto-assembly plant in the Bay Area
This month, Tesla dropped “Motors” from its name, as its massive $5 billion lithium-ion battery factory outside Reno begins mass production with partner Panasonic. The company, based in Palo Alto with a design studio in Hawthorne, is developing battery-powered storage devices, “empowering the individual as their own utility,” Musk wrote in his “Master Plan.”
He anticipates ramping up car deliveries with the release of the Model 3, just as SpaceX increases rocket launches to twice-monthly from Vandenberg Air Force Base near Lompoc and at its new launchpad at Cape Canaveral’s Kennedy Space Center. The next launch is scheduled to deliver supplies for NASA to the International Space Station.
He’s also betting on a merger with SolarCity to hasten battery-powered solar storage technology.
But the future of Musk’s companies depend on a sea change in energy production from the old fossil-fuel model.
As activists derided him for rubbing elbows with conservatives, Musk ignored them and praised Secretary of State Rex Tillerson, the former CEO of ExxonMobil, for supporting a carbon tax to spur reductions in harmful emissions — and, probably not coincidentally, buoy Tesla and its Gigafactory.
“Rex Tillerson supports a carbon tax,” Musk wrote on Twitter. “This is what is really needed to move the needle.”
Next step: Carbon tax
Trump’s White House is able to embrace Musk because it is at odds with the “old Chamber of Commerce”-style Republicans, Genovese said. This gives Musk a unique opportunity to put a traditionally Democratic priority on the agenda of a Republican administration.
“The new entrepreneurial Republicans include libertarians, conservatives and liberals. They pride themselves on being disruptive of the establishment,” Genovese said. “(Musk) is more interested in the game rather than the player. I think he sees in Trump someone who, on this particular issue, he might be able to influence, and he’s trying to take advantage. Musk has been really consistent (about his goals). It’s the (political) parties who always flip-flop.”
The potential benefits are as big as the risks for Musk and his grandiose plans, Kalb said.
“Elon is not about focusing on company profits. He is about doing what he thinks is right for the greater good, and in the longer run,” Kalb said. “You can do business with someone without agreeing with them politically. Having a seat at the table gives him some opportunity to influence policy. If Trump respects him, that is good for Elon, his companies, and for all of us.”
But, this is a gamble that could backfire.
“There’s a lot that could go wrong,” Genovese said. “The Musk empire could collapse. And if it does, he’ll dust himself off and try again, which is what Donald Trump did.
“The best-case scenario is the carbon tax is put into effect, it works, pollution decreases and the common good is advanced.
“When the Musks of the world take risks, they win sometimes. And you want to be on the gravy train when it comes in. In the kind of casino capitalism we’re in today, that’s the name of the game.”
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