Elon Musk's year has been eventful, to say the least. There were the forays into Bitcoin, his Twitter spats with politicians and the influence on the stock market – which almost eclipsed his (occasional) title as the world's richest man. In today's Business Extra Mustafa Alrawi and Kelsey Warner take a look at Time's Person of the Year for 2021.
In this episode
Elon Musk's 2021 overview (1m)
Elon Musk's persona (5m 50s)
The role of social media (8m 32s)
Tesla stock and future (9m 58s)
Is Elon Musk human enough? (14m 23s)
US regulation (17m 5s)
Transcript edited for clarity.
Mustafa Alrawi (co-host, assistant editor-in-chief at The National) 0:07
Elon Musk became the richest person in the world in 2021.
But that was not the most interesting thing he did all year. Space, transportation, Bitcoin have all felt his influence. But he's also been dogged by controversy these past 12 months.
Kelsey Warner (co-host, Future editor at The National) 0:43
Here we are again, talking Elon Musk. But I think today's the day to do it. We are looking at a year in review of Elon Musk. What’s he been up to?
I would just like to say that you and I and our producer were talking about what we should do this week, a few days ago. And we said we should talk about Elon Musk. And then, lo and behold, Time magazine named him Person of the Year. But I think we were talking about this first. And we do believe that this is a worthwhile conversation: to have a year in review, given his outsized influence on our collective future.
So I'm just gonna do a roll call of things associated with him. He became the richest person in the world in January, subsequently lost that title to somebody else …
… his arch nemesis Jeff Bezos.
… and then got it back again, as we speak, he is according to his paper wealth, everyone's paper wealth, the richest.
That was starting the year with a bang but not really what really caught our attention. That's almost mundane for him. He was involved during the year in a very public discourse about Bitcoin, and how useful or relevant the cryptocurrency is. At one point announcing that Tesla, the company that he is chief executive of, owned about $1.5 billion worth of Bitcoin, then he subsequently said that they would accept Bitcoin if you wanted to buy your own Tesla.
And then he kind of, as they say in the business, reverse-ferreted on Bitcoin and then started talking about its problems, including its massive energy use for mining. But he became a massive hero to those that believe in Bitcoin and cryptocurrencies.
Yeah, he marshals a large following from his very controversial Twitter handle and the Gamestop saga as well. He became a bit of a folk hero for the day-trader jockeys that have emerged in the last year or two following the pandemic.
But outside of his role in Bitcoin and his role in Tesla, we have to think about him as a, you know, space pioneer and energy transition pioneer and incredibly controversial figure.
He holds in tension all of the possibilities of our long-term future with the really immediate realities of just how damaged and upsetting an individual human person can be on a day-to-day basis.
All of his diatribes the last last few years, and he really came on the scene and you and I first spoke about Elon Musk back in 2018, when he ran afoul of the SEC, when he tweeted that he had secured funding to take Tesla private and was then was assigned some babysitters on his board, too, and also had to actually step down as chairman of Tesla as a result of this Twitter behaviour.
I think 2018 was really when he stepped on to the scene, as you know, not just as a serial entrepreneur with ambitions of space or electric vehicles but as this Barnum-type or Edison-esque comparison that we now make of him. 2018 was when he stepped to the fore in that way.
In the last few years, we've all just been rapt and headline by headline, the story feels like it's developing but he also is prolific in his production. He is one of the most substantive producers of products this century has seen, and in April hit a major milestone when SpaceX sent a reusable rocket up to the ISS for the first time in human history. And here's Elon Musk actually talking about his vision for space travel. Here it is.
Elon Musk 4:48
Now almost half a century since humans were last on the Moon. That's too long. We need to get back there and and have a permanent base on the Moon. I think like big, permanently occupied based on the Moon and then build a city on Mars and become a spacefaring, like spacefaring civilisation, a multi-planet species. We don't want to be one of those single planet species, we want to be a multi-planet species.
When you think about his visions to colonise Mars, he has pioneered the reusable rocket industry as a step towards that goal, his idea that we will implant AI chips into our human brains to make us smarter and augment our capabilities through his company, Neuralink.
Tesla, if you think of Tesla not as a transportation company but as an energy company, with batteries capable of storing energy, when the sun is not shining and the wind is not blowing.
These three things alone would transform the century. But it's the day-to-day Elon Musk and his Bitcoin market roiling that always, I think, gets our attention and distracts us. He can't help himself. And that's what makes him so interesting.
Well, the persona that has emerged, thanks to social media and his use of social media, whether it's Bitcoin or whether it's asking the internet if he should sell part of his stake in Tesla worth billions, or his public row with the head of the UN's World Food Programme about how money can be used to feed people who are starving.
And whether it is a debate about money or how you use that money, or if it's about quitting his job, or even the world being underpopulated, it is very much a contrarian view. Given everything we've been discussing about climate change these past few months in particular, and the devastation on the planet because there's simply too many people and not enough resources. And he's inserted himself into every facet of life.
At the moment, he talked about space. We're looking at this sort of commercial space race, this new era of thinking outside of this world, and his rockets, as you said, his SpaceX rocket was the first to take civilian astronauts out of the atmosphere. And he proved that this year, which was really important, because the whole SpaceX cycle had been up and down, if you excuse the pun, but you know, also his PR style, I think, kindly, we can say it's reckless but portrays him almost as a sociopath in many ways.
But to come back to Tesla, and Tesla shares, doesn't seem to really impact this insatiable appetite for his stock. And it is an outsized influence on the wider US stock market. And so many investors in so many funds are literally making their money largely out of Tesla. And it's to me, it's frightening. It is really scary, to have one individual have so much sway and so much influence. But to your point, you talk about his influence, his legacy. I think he's a product of our times, or at least his outsized persona is a product of our times because he can use social media because of connectivity rather than he being the one driving these trends.
He is absolutely a product of our time but he is not singular. I was speaking to our social media editor Cody Combs earlier about what Elon Musk's Twitter presence actually means when put in context. And Cody was just saying, you know, he's really occupied some attention space that was left empty by Donald Trump. And Twitter is a medium that's sort of hungry for a protagonist. And so we were gifted with Elon Musk's Twitter presence in 2021, a bit in part as a result of the end of the Trump administration and his removal from the platform.
But this outsized influence you're speaking of is a total reflection of this globalisation of communication that we are now in. And he has also benefited as a businessman from the globalisation of manufacturing. He's opening a giga-factory in Germany, in China. Tesla has a global footprint and then SpaceX with ambitions for going beyond our atmosphere. We are going beyond planet Earth to build opportunity this century. And so he's a product of that opportunity as well.
We've never had a space economy. And we do now. And Elon Musk was a first mover on that opportunity with SpaceX and Starlink. He's going to connect much of the developing world with internet access, which has huge implications.
So yeah, he's a product of our time. He's a driver of our time, and the chief beneficiary of that so far has been Tesla and its sky-high valuation of $1 trillion of market cap as we speak right now. That is half the valuation of Saudi Aramco, often quoted, it's the valuation of the entire automaker industry in the US combined. So where do we go from here on that valuation? That's what I'm currently wondering today is: what happens if the Tesla's stock crashes?
I mean, I would argue that Tesla's valuation is very much connected to how people perceive Elon Musk, yes.
Tesla as a company is often surprising to the upside on its production of cars. Every time people doubt its ability to deliver it seems to make it through, but it has its problems, haemorrhages, a lot of cash-to-cash business. And the car business is notoriously risky, which is why there's only a few companies out there really doing it of any note.
But also, there is so much uncertainty about what the future is going to look like, about what consumers really want, about how technology is going to play its part, that Elon Musk's levels of conviction can't help but drag people along with him. Especially those who don't have the gumption or the creativity, or his genius, his evil genius or good genius, depending on what you categorise it as but a genius, nonetheless, it was genius to come up with his own ideas.
So when he succeeds, particularly when people put him down and then he proves them wrong, he gathers more followers. But that I think you compared him to Trump in terms of Twitter. It's also the same thing, the very nature that Musk never apologises, or rarely apologises, and never seems to be down for very long, or ever, wins him a lot of followers. And I would say that the auto industry, and is very much just my humble, you know, largely uninformed opinion, compared to all the analysts out there, that the auto industry will pay a big price down the line for sort of falling into line, if you like, behind Musk's vision for cars, not all of them are, I'd say that, you know, the Japanese, perhaps through culture, are able to kind of try and carve their own path. But certainly the US automakers and even the European automakers, roiled by so many scandals, so many problems, so much change. And he's proved them wrong on a small level, so they're gonna follow him. And that's why Tesla is worth as much as everybody else.
But also, OK, so Tesla owns two thirds of the electric vehicle market globally, so everyone has to look to them to see what they're doing, because they're just the industry leader. But I think we might wake up one day and Elon Musk may have lost interest in cars as a, pardon the pun, as a vehicle for his batteries.
Tesla is slowly transitioning to become more of an energy company than it is a transportation company. And so to understand the underlying value in Tesla is to understand Tesla's ability to store, at utility scale capacity, renewable energy [through its batteries]. So Tesla, over time, its business is transitioning to being one that will be a linchpin of the energy transition as we figure out how to decarbonise our grid. So that's the space I'm watching on Tesla, because the Cybertruck certainly has not delivered.
Well, I mean, people are sheep. Elon Musk is the wolf. The sheep don't realise that they think that he's, I don't know, a slightly more exotic sheep.
He reminds me a lot of the cult of personality around Steve Jobs.
Steve Jobs evolved Apple to the point where it, you know, I don't think it can evolve any more now. And like you said, if Tesla continues to evolve, and disrupts more and more sectors through products as his imagination grows.
But also, with Apple, they gave us the iPhone and access to all these apps. But we didn't regulate it. We didn't put people at the heart of it, we didn't understand the dangers. So, you know, let's say Tesla does transform energy for us. Is he human enough? And I really genuinely mean that as a question: is Elon Musk human enough to ensure that whatever great things he ultimately achieves, however he helps us find the solutions in the future, that it will be a better future for people?
And no one human is human enough to execute on the scale that he is, which is why we need him to pay his taxes and he needs to be regulated. And so his move from California to Texas to headquarter his companies this year I think was the red flag that answers your question of, is he human enough? No one is human enough to rise to this occasion. So we need guardrails for Elon Musk as per usual, which is what we have been talking about since 2018.
So he sold some of his Tesla stock, he's still selling some of his Tesla stock, he was always going to sell some of his Tesla stock, but he made it into a game, the gamification of his life with asking people on Twitter.
I actually respect his very public row with David Beasley of the World Food Programme about whether he should give billions over to feed the world, because he doesn't shy away from appearing to be the guy who's wrong. Because in his mind, I guess he's never wrong. But it did shine a light on an important topic. It's not all bad with him, I don't think.
No, and I'm not shying away from the provocative conversations either. But when he reopened his factory in California at the height of the Covid-19 pandemic, in the face of, you know, it being illegal and him saying, arrest me before you arrest the factory workers.
For somebody who's built his career on science and technology, for him to be a Covid-19 naysayer and to manipulate messaging in order to benefit his company rather than public health. That is evidence of somebody who really cannot be trusted in my mind, and also [there are] the sexual harassment allegations [against management; not EM himself] at some of his companies. There's open lawsuits around autopilot at Tesla, because there's been some really high-profile, very disturbing crashes, and his pursuit of self-driving cars. The path of Elon Musk is littered with issues and controversies. And I'm not saying that we should shy away from any of that by any means. But I also think it's really dangerous for us to put this much hope and power with, as you say, one human.
Well, I think the American attitude to regulation is, you know, don't regulate if it's going to stifle business. But then, you know, it's always that constant battle between big government and small government and state versus federal, and things get lost where there is a real need to look at this guy seriously, and to look at what's happening with regards to the stock markets and Tesla stock to see how he's running his business and what he's doing.
Because we missed the boat with Steve Jobs and Apple. We missed the boat with Mark Zuckerberg and Facebook. We definitely missed the boat with Google. And so now is our chance, you know, the collective we globally, regulators, governments, to ensure that we don't miss the boat. We’re all at the mercy of Elon Musk for a decade or more to come.
Centuries to come. If you believe what he's promising. And I I do.
Let's leave it that Kelsey, thank you so much.
This was fun, thank you.
Transcript edited for clarity.
Produced by Arthur Eddyson and Ayesha Khan