Elon Musk is known to be a progressive pioneer of modern technology and unparalleled skill in the business world, with his companies including Tesla Motors and SpaceX. But where did Musk start from to become the enigmatic entrepreneur that he is today?
Given Musk’s skill in technology, you might be surprised to learn that he studied finance, economics, and physics at the University of Pennsylvania in 1992 before heading off to launch his first venture. Musk’s first business was an online-based venture called Zip2, a directory and web-publishing software that helped customers create, track and maintain their business information. Zip2 was created in 1995 and proved profitable within three years, which then enabled Musk investments in other projects. As well as this, Musk invested his own money in Zip2 and it subsequently developed into an industry leader.
From Zip2, Elon Musk then went on to create X.com, an online financial services company, in 1999. After one year, the company merged with Confinity and the merged company took the PayPal name. At the sale of PayPal, Elon was estimated to have earned over $1 billion in PayPal stock, much of which he used to found his next operations – Tesla Motors, SpaceX and SolarCity.
Zachary Wolf, an author for FoxBusiness.com, comments that “With his sale of PayPal, Musk established himself as one of the most successful serial entrepreneurs ever. With the money he earned from the sale, he changed the lives of millions with his vision for the futuristic Tesla Motors.”
In July 2003, Elon Musk founded Tesla Motors, a publicly held company based in San Carlos, California. His initial plan was to build a high-end thoroughbred electric sports car and make money off of them by selling them in high-end markets where there was a clear demand for such a product. This car was Tesla Roadster, a sports car that accelerated nearly as fast as the Ferrari. After the success of Tesla Roadster, Tesla Motors then went on to manufacture the award-winning Model S. Tesla Motors is now the leading manufacturer of electric cars in the U.S.
In 2002, Musk founded Space Exploration Technologies, or SpaceX, with the aspiration of creating technology capable of transporting human life to Mars. With backing from the U.S. government and further investment from private investors, SpaceX successfully put a satellite into orbit in 2008 and, with Teslas help, created a successful resupply effort for NASA.
SolarCity
SolarCity was founded by two brothers, Peter and Lyndon Rive, and Musk in 2006. SolarCity is an American company based in San Mateo, California. It specializes in the design, financing, and installation of solar panel systems. SolarCity has been the leading provider of solar power systems in the United States and the largest provider in California.
SolarCity has partnered with national and regional government agencies, municipalities, schools, and utilities. It has installed solar panel systems on the White House, the U.S. Capitol, the Pentagon, and more. As of 2015, SolarCity had installed solar energy systems on over a quarter-million rooftops in 27 states as well as Washington, D.C. and Puerto Rico. Elon Musk was named chairman of the SolarCity board in 2014.
In a 2006 interview with Peter Rive, he said: “Adding someone like Elon to our team is something that takes us to another level. He understands solar, he understands business and he understands the capital markets.”
Tesla Acquisition of SolarCity
In 2016, Elon Musk made all of his companies even more interconnected by having Tesla Motors acquire SolarCity. This acquisition provided a breakthrough moment for Musk’s companies, allowing them to become intertwined to create a fully integrated sustainable energy company. This transition created access to economies of scale, technology synergies, and cost savings.
Kirk Sorensen, a former NASA engineer, points out that “You’ve got Tesla Motors, SolarCity and home batteries coming together to form an integrated energy company that’s now on the cutting edge of energy storage and power.”
Combining Tesla Motors, SpaceX and SolarCity helps Musk become a verified leader in the clean energy business that supplies sustainable energy sources for all of its operations.
Environmental Impact
By unifying his three companies, Musk has revolutionized the way electricity is produced and consumed and ultimately, held the answer to reduce industrial carbon emissions. Last year, Tesla announced a revised seasonally adjusted annualized production rate of 500,000 vehicles as well as a targeted production rate of 10,000 vehicles per week. SpaceX has reduced their price per rocket launch by more than sixty percent while SolarCity has installed solar energy systems on over a quarter-million roofs.
The environmental impact of Tesla, SpaceX, and SolarCity has been immeasurable. According to Lilian Kue, the vice president of great operations at Tesla, the “Tesla and SolarCity products help save the planet by providing clean solar energy and high-efficiency electric vehicles.”
She also goes on to suggest that “Tesla and SolarCity products help decrease cost of energy produced from clean solar sources, which allow more people to access and save clean energy.” This in turn has reduced global pollution with an estimated growth of 69% in the number of electric vehicles in 2017.
Financials
Since its inception, Tesla Motors has seen dramatic growth as well as positive market performance. As of 2021, Tesla Motors is estimated to be worth $800 billion and in late 2020, Tesla became the most valuable automobile company in the world, surpassing giants such as Toyota, General Motors, and Volkswagen.
In November 2020, the US government passed legislation in support of electric vehicles that provided Tesla with $14.5 billion of loan guarantees aimed at vehicle production. This was followed by a wave of investment from banks, private investors, and Wall Street. According to UBS, quarterly electric vehicle sales are now valued at $43 billion and are set to double by 2025, making the company one of the most successful and rapidly growing businesses in the world.
Competition
Tesla Motors is now facing a wave of competition from other companies developing electric vehicles including General Motors and Volkswagen. Volkswagen is estimated to be investing up to $86 billion into electric vehicles and aims to become the “world’s leading electric car” manufacturer. General Motors has also invested around $ 20 billion in the development of electric vehicles and has the vision to roll out 24 electric vehicles by 2023.
However, experts suggest that Tesla Motors still maintain a competitive advantage with technological capabilities including Autopilot and Supercharge. The company is currently leading the industry in terms of autonomous driving technology and is focused on developing advanced battery technology and manufacturing facilities that can match the success of Tesla Motors.
Public Response
Overall, the public response to Elon Musk’s companies has been overwhelmingly positive. The three companies have seen a surge in demand and investments from private investors, which shows no signs of slowing down. There is a great deal of admiration for Musk’s ambition and vision- helping him to become known as a leader in the tech and energy industry.
In November 2020, Musk was identified as the world’s fourth-richest person as extensive investments in Tesla Motors, SpaceX, and Solar City helped to propel his net worth to $117 billion. Tesla’s stock gained more than seven times its value over the course of 2020 and the price of Tesla shares has risen by more than 600% since the start of the year.
Rob Toews, a professor of marketing, comments that “The public has responded positively to what Elon has accomplished and his companies have played an important role in the growth of the global market for electric vehicles and clean energy. Musk’s success is a testament to the power of ambition and vision and has inspired many entrepreneurs to pursue their dreams.”
