1) Elon Musk has failed at the very thing others seem to believe he is good at: being an entrepreneur, innovator and business leader in a competitive market. His biggest “successes” (Tesla, SpaceX, SolarCity) are almost entirely dependent on government subsidies, lobbying efforts and tax magic; they are not profitable in themselves and much of their business risk has been socialized. Rather than exemplifying the “American exceptionalism” Musk is always lauding, these enterprises are poster children for crony capitalism and taxpayer-funded ventures.
2) Musk advocated for migrating PayPal’s server architecture from Unix to Windows when he was CEO. That was exceptionally idiotic from both a business and technical standpoint (i.e. Windows has not only always been much less scalable, extensible and stable than Unix, it has also been much more expensive to deploy, license and maintain), and frankly brings his other technology choices into serious question.
3) Musk routinely sacrifices ethics on the altar of his personal vision. For example, SolarCity is probably the most unethical PV installation company in existence, using highly misleading sales tactics to persuade unknowledgeable consumers to commit to what is arguably the worst option available (in terms of bang-for-buck) for their residential solar power. Pro-capitalist folks might argue this is just “business as usual,” and that caveat emptor is the only relevant guideline where exploitation for profit is in play, but in my view ripping people off in the name of green energy is just a form of reprehensible carpet bagging.
My 2 cents.
Comment by Jared Croft: "SpaceX was funded by the government along with competitors, was given less funding than them, and has out competed ULA in price by over 50%. It isn’t a public company, so you are speculating when remarking on its profitability.
Tesla got a bail out in 2008 (along with many other car companies), which they paid back. It got tax breaks and some nearly worthless land in Nevada, but sunk in billions of dollars in exchange. All EVs are subsidized, not just Tesla cars.
Amazon has scarcely been profitable for 20 years. Tesla isn’t profitable because it is investing in rapid expansion rather than resting comfortably on its core revenue stream. If it were resting on its core revenue stream, its stock would immediately plunge because investors like it because they think it will expand. Why else would they value such a small company with a market cap above Chrysler?
So: SpaceX saves us money, government relative to Tesla is unbiased (everyone got a bailout; EV subsidies are general), and lack of profitability for a rapidly changing and expanding business is not an effective criticism (either for most “fanboys” or investors).
I think these criticisms are a reductionist view of the free market vs the government, not a “this is not the most effective way to make the world sustainable or humanity multiplanetary thing”. Engineers care about solving problems, not politics."
Jared 80% of SpaceX funding is from the government. That has been disclosed despite its not being a public company. Whether the American taxpayer will be getting value out of these military and NASA contracts is indeed a different question, but let’s not forget that NASA bailed out Musk in 2008…when SpaceX was, according to Musk himself, about to go under after three failed Falcon tests. The point is that the U.S. taxpayer effectively saved Musk in the midst his failure, just like we did for U.S. automakers, and it was via a contract for future, as yet unproven SpaceX services…so we haven’t been paid back yet. Well good for him; now he’s part of the crony capitalist club and was able to socialize his business risk. That’s simply a fact - not speculation.
As I’ve answered in another comment, the U.S. taxpayer received a 2.4% return on their DOE loan to Tesla - it was paid back early specifically to avoid having to provide Tesla shares which would have improved that return. So…not a noble gesture, but a money-saving one. DOE is estimated to have lost about $1.6 Billion by not structuring the deal the same way Musk did for his own $38 Million investment in Tesla. Could any of this be the result of Musk’s aggressive lobbying efforts in 2009, and his 12 flights to DC in his personal jet? As I also describe in that comment thread, there is also a difference between R&D investment (i.e. the DOE loan), consumer incentives to purchase EVs, and the Treasury bailouts…it is important to tease these differences out. To wit: the American taxpayer directly funded the success of the Model S, a Veblen luxury good - again that’s a fact. Toyota’s tremendous success with the Prius among more average consumers, by contrast, simply did not come about in the same way (yes it’s an apples to oranges comparison, but hopefully you’ll see the point I’m trying to make).
As for how the market values stocks…come on, after so many crazy, bursting bubbles (especially in the tech arena), can you really not appreciate that such valuation is all about hype and psychology, and not reality?
And, perhaps most importantly, throughout all of this Musk continues to trumpet that “the market will come up with the best solution,” and that government subsidies aren’t needed (and of course shouldn’t be given to his competitors). His fans likewise give Musk credit for all of these flashy, taxpayer-funded accomplishments. Really? Is the hypocrisy not glaringly obvious here…?
Comment from Dan Spawl: "Do you have references for the unethical PV business?"
Solar panel company pocketing govt subsidy cash intended for homeowners
(see also SolarCity comes under more criticism for siphoning the subsidies of its small solar customers)
Surprised solar customers find themselves with liens - Watchdog.org (notice the references to SolarCity’s repeated denials to placing such liens)
Solar Panel Leasing Scheme Threatens Home Ownership
SolarCity (consumer complaints)
Solar Industry Under Fire
Why Treasury Is Investigating SolarCity and Solar Third-Party Funds
Elon Musk patent hypocrisy on display in growing SolarCity patent portfolio - IPWatchdog.com | Patents & Patent Law
Lots more…though it appears SolarCity may be scrubbing the Internet of its worst offenses. My own comments (on a PBS story that put SolarCity in a surprisingly favorable light) were…for some odd reason…deleted from every server around the country where I posted them. These were on both moderated AND unmoderated threads. Nothing I said was inflammatory or provocative - I just exposed the leasing vs. owning issues. I’ve been posting on those threads for years without incident…never had one thing deleted in over fifteen years. But the SolarCity comments (again, purely factual) were removed within six hours.
Comment from Larry Velez: "This week in Tesla’s shareholder meeting Tesla showed the negligible impact that the DOE loan had on Tesla and how they repaid it early with a penalty for doing so. I think the question is whether these companies would exist without any government incentives and the answer is yes - they all would because most of the reason they exist is because of investors. Toyota and Daimler specifically invested in a big way in Tesla. Those investments were life changing, the government incentives were. For that reason I think Point#1 is not valid."
Larry I would encourage you to read the other comments (unfortunately nested ad nauseum as they are - my apologies for that!) that discuss this point. Lots of pertinent info there that discuss SpaceX and SolarCity in addition to Tesla. Regarding your thoughts on Tesla - there actually was a substantial penalty for NOT paying the loan off early: Tesla would have had to begin paying part of the repayment with shares; this is how Treasury made money back on the bailouts, and DOE really missed out on this. Instead of the 2.4% return on their investment that they got, American taxpayers could have received closer to the 3,500% that Musk did on his investment in Tesla. And of course Daimler and Toyota made similarly sweet returns on the measly $50Million they each contributed (I think it totals something close to $1Billion). More to the point: this is why Musk went to the DOE in the first place…the loan was a LOT cheaper and a LOT bigger than standard VC terms. As for its impact, nearly everyone who has been watching Tesla agrees that the DOE loan was the main facilitator of the S Model development. Musk makes a big show of Daimler’s timing and public perception behind Toyota and Daimler’s contract for EV batteries, etc., but all of that is mostly for show. It’s just PR spin compared to the heavy lifting performed by the American taxpayer. Lots of articles on all of these points can be found via credible sources.
That said, this same pattern appears in SpaceX and SolarCity…in some ways much more dramatically. None of these companies would exist…at all…without the U.S. government and crony capitalism. Innovation simply doesn’t occur in the a marketplace of established, mostly monopolized industries, without serious incentives. This is mainly a consequence of price inelastic demand - there’s just no margin for R&D there, and angel investors still want some hope of success, not just impulsive, unsecured risk. Which is almost certainly why Musk focussed on luxury EVs, which are Veblen goods sitting comfortably within price elastic demand. In certain markets - especially high tech - innovation has almost always been instigated by public research. It’s almost humorous to hear the Chicago or Austrian school neoliberal types trumpet the superiority of a competitive market to produce, say, disruptive innovations…when so much that has occurred in the last fifty years was a consequence of public investment (academic research, government research and piloting, government incentives, etc.). Here’s a fun link on Silicon Valley, the pride of crony capitalism: Silicon Valley: Your Tax Dollars at Work
Comment by Kirk Bushell: "You couldn’t actually be more wrong. Space X and Tesla are not alive based on subsidies, though certainly Space X did get its initial business from government. However, so has many other private companies and tbh - government was the first natural business opportunity there.
As for Tesla - lol. No. For one, Tesla is profitable and very quickly paid back a loan from the government within a few years. The fact of the matter is that Musk with every business venture - from Zip 2 through to Space X, has seen an opportunity and worked toward it. The fact that Tesla has 400k preorders on their Model 3 which is yet to be released should tell you a thing or two about what they’re doing. Here’s a hint - people are interested. Very interested.
Now if we want to say what Musk has failed at - education would be one. He left a scholarship early to pursue business opportunities. He’s also not very good with people - he takes offense easily and will get quite defensive. But as far as business is concerned - he is yet to fail in any real way.
Your point about him being essentially a crony capitalist is absolute bullshit. Look at his comments he’s given regarding:
Lockheed Martin getting a 4.6 billion contract for the same work that Space X is doing for 1.6 billion.
His comments regarding General Motors and other companies seeking the production of EV.
Musk wants competition, for numerous reasons - but most importantly of all he simply wants to see the world go beyond fossil fuels and to the stars, and he sees every step in that right direction as the right one - regardless of whether it’s with him or not.
I will happily concede I am a fan of the guy - he’s taken massive risks (not many can say they’v risked 180 million on 2 businesses and nearly sent themselves bankrupt). He’s one of the few people who will put his money where his mouth is.
As for him advocating windows/unix.etc. - this is merely a subjective technological choice, and I don’t think is a reflection of his “failures” - though me personally, I’d say it’s a wrong decision also
I’d love to see references/information regarding Solar city’s sales tactics, because I am yet to hear or see anything. Imho this looks and sounds like rumourmongering simply because people don’t like the guy.
Musk has had his fair share of critics. So far he’s proven every single one wrong."
Kirk I appreciate the thoughtful reply, but I think you may have blinders on. . Here’s why: Musk is constantly contradicting himself in both word and deed. My take (after doing some research and trying to figure out why this is) is that he has a lot of passion directed in a lot of different directions (in the sense of ADHD), and consequently plays fast-and-loose with whatever facts/thoughts/people he has at hand in order to move his goals forward. I don’t know that this is the case, I’m just speculating. However, the evidence of such contradictions is abundant:
1) He’s spoken a lot about the restrictiveness of patents on competition, and moved several Tesla patents into the public domain. If you only look at that data, and combine it with what he did with Hyperloop, he looks like a champion of Open Source. Except…he did the exact opposite with SolarCity, which has dozens of patents in the pipeline and generates more applications every few months. In that enterprise, he has been doing exactly the opposite. There may be very good explanations for this difference, but my point is that you can’t take Musk at “face value” on what he himself has said…you need to look deeper into his enigmatic choices.
2) If he’s not into crony capitalism, then why has he allocated so much time and energy to lobbying and strategic campaign donations? Look into how he got the $ 20 Million in gift from Texas taxpayers for the SpaceX facility…as well as the public beach closing for the same. He greased the wheels for three years with state legislators to get that deal. And of course Texas taxpayers had little say in the matter. Classic crony capitalism. And this is only the tip of the iceberg…Tesla alone received $1.3 Billion in government subsidies for a company that, despite your assertions, has not been profitable at all (How Tesla Motors Could Be Profitable if It Wanted To -- The Motley Fool). Sure, there is consumer interest (heck, I’m interested in the new, much more affordable model myself!), but that doesn’t offset the realities of Musk’s socialization of risk with taxpayer funds. Musk has, of course, promised that Tesla will be profitable in 2016…we shall see (according to the Motley Fool article just linked, it doesn’t seem likely). But the point is that the taxpayers won’t see all of their initial investment refunded…except of course that $452 Million loan you mentioned; a nice gesture, but it doesn’t change the ongoing math.
3) I think you already found my SolarCity links in another comment thread here. Let me also reiterate that I myself will save roughly $67,000 (over 20 years) in comparison to a SolarCity leasing proposal for my 5kW PV system by installing it myself. It was actually quite easy and almost anyone could do this IMO. I received quotes from four other PV installers who were happy to direct me to HERO, PACE, credit union green loans, and a number other financing options to own my installation at a fraction of the cost (usually about a 50% savings) to the SolarCity option. Sure, I beat those numbers by doing the installation myself, but the point is that “the competition” was happy to help me “go green” and not rip me off in the process. Just sayin.
BTW, I’m really not a rumor-mongerer. Although I had direct negative experiences with SolarCity myself, I didn’t even start looking into Musk until I was asked about him in another Quora question. I have no axe to grind…I’m just looking at the facts. I happen to think Musk’s vision is pretty cool - green energy, electric cars, traveling to Mars, reusable rockets - the teenage SF fan inside me is cheering for him…absolutely. What I take issue with are his ethics and his tactics. Just because the status quo is corrupt doesn’t mean the status quo should be capitalized upon to line one’s own pockets and further one’s own personal vision. From my reading of Musk, he would do pretty much anything to make his dreams a reality - the ends justify the means. For me, the means are important. Perhaps essential. In fact, if we don’t learn to operate differently (as a species), then colonizing Mars isn’t going to help us in the long-term. Just my 2 cents.
Comment by Aayush Agrawal: "I don’t agree with you, but well said.
As for why i don’t agree with you, even though Musk has taken quite a bit of government and taxpayer money, quite a bit has come out of it too. Vertical landing in particular will already pay off. Once patents expire, NASA’s own savings would be gigantic enough to justify the money funneled into SpaceX so far.
Similarly Tesla’s push for electric is making ripples. Among other things, Musk has shown that it is indeed possible to create a great car that is fully electric."
I completely agree that Musk’s impact on technology is unquestionable - and I greatly admire some of what he’s done and much of his vision (going to Mars, etc.). My point is more about the “how” of it - how he has gone about this. If he had said “hey I’m a socialist and I believe that government has a key role in innovation and should fund my ideas,” I would be a lot less critical. But that is not the narrative in play: Musk is held up as an exemplary entrepreneur, a glory of American exceptionalism. I find that problematic…to the tune of about $5 Billion in state and federal subsidies. What could any number of bright folks achieved in a collaborative way with that kind of support? Something to think about. Essentially, it’s like someone who wins the lottery being viewed as a “successful entrepreneur.”
Comment by Chet Bel: "Clean energy is a scam, originally started by Al Gore and perpetuated by likes of Elon Musk who become heroes in the process. At the end every clean energy initiative is subsidized by carbon fuels and without carbon fuel no clean energy will be sustainable."
That is a patently false assertion Chet. Hydroelectric has been a relatively inexpensive and sustainable part of energy production all around the globe since long before Al Gore was born. Geothermal is likewise cheap and sustainable has been in use from the late 1800s - like hydroelectric, though, it’s not readily available everywhere. Right now concentrated solar tech holds the greatest promise for 24-hr solar availability (using molten salt for thermal storage), but this also will only work in certain parts of the globe. Wind farms are also surprisingly efficient, cheap and sustainable…but again are geographically limited. Thus the main problem with all of these relatively cheap, sustainable options is power distribution - though I believe the Norway’s hydropower is helping offset Germany’s over-reliance on coal after Merkel shut down several nuclear plants. Yes it’s a complex landscape but it would be unwise to oversimplify it as you have, especially since the oil and gas industry itself receives some of the largest government subsidies of any industry…ever.
[extended back-and-forth over benefits and costs of renewable energy...then the conclusion...]
Well Chet I do worry about folks like you. Misinformation is a real problem right now - too many people don’t filter propaganda, as you yourself seem to be concerned about. And yet you parrot propaganda…we are all hypocritical creatures, I can feely admit that. Cany you? Regarding “agenda-driven media” I tend to evolve my ideas from a different path than mass media or special interest media. I’m not really a participant in mainstream media memes, mainly because they are agenda-driven, just as you point out. Instead, I do my own research, and come to my own conclusions. I also have a good friend who has designed and executed very large renewable energy contracts, and probably understand the ugly side of renewables (politically, economically and environmentally) slightly better than most people do because of that.
However, to your point about global renewables, as of last year:
Costa Rica: 100% of energy production from renewables.
Uruguay: 85% from renewables.
Kenya: 60% from renewables.
Scotland: Exceeded 100% in renewable energy generation in total MWh.
Denmark: 40% from renewables overall.
Germany: 30% from renewables overall, 50% during peak periods.
Here is some historical data on a wider range of countries:
List of countries by electricity production from renewable sources
Now Chet, if you’d like to describe in detail how each of those countries has destroyed people’s lives - or the environment, or their economies, etc. - with renewable energy, then please feel free to do so. I am eager to learn what I don’t know. However, please use accurate data. For example, hydropower currently accounts for 51% of all renewable energy in the U.S., for 6.8% of total energy production in the U.S. (as compared with solar, which is only 0.2%). Note that 51% of renewables is a significant number, and that this predates Musk and Gore. You keep sidestepping that simple historical fact in your…er…excitement. China’s production via hydroelectric is around 17%, but it’s growing quickly. India’s is around 14%, and is also growing. Neither country produces “>20%”. Specifics matter.
You should probably also read this: Hydroelectricity.
Chet Bel's response: "The countries you cite are less than 10% of the world's population. I am saying that renewal energy is not sustainable when you decide to bring it mainstream, which is approximately serving more than 50% of the world's population. Also several of these countries have ideal geology for renewable power, not every country has massive tropical rainfall like Costa Rica to make Hydro Electric nor Geothermal. Also Costa Rica's 100% is more media hype, it was only for a few days and not sustainable. This is just one ref. on this:
Please also understand damming of river has serious consequences, a fact not shown by mainstream media. This is just a ref:
Now tell me why are effects of damming rivers not studies as extensively as environment impact of fossil fuels. This is due to the likes of Al Gore, and people like you who drink the 'green' Kool-Aid, that environmental impact of renewable energy is not given that much attention. Its easy to hate one target and that target is fossil fuel. This is just one example !
I can keep giving you facts but you choose to ignore my argument, this is not a boxing match as your seem to think.
I will sum up that the world was not designed to sustain this high a human population. If the world population was < 1 billion, maybe renewable energy was sustainable at 100%. Infact our human ancestors survived purely on renewable energy. At our current population, fossil fuels are the only large scale alternative and demonizing them for the sake of renewable energy is a pipe dream and plain stupidity."
I stand corrected, Costa Rica is at 90% renewables, with peaks of 100%.
I also agree with you that this isn’t a boxing match. What I am trying to do is educate you about things you don’t seem to understand, and which you haven’t supported with any evidence. Wherever you got this idea that renewables are somehow more destructive or unsustainable or injurious than fossil fuels, you are simply mistaken, and in fact you haven’t provided any comparative evidence to support your view. So I am trying to remedy your ignorance on this matter, and you are resisting. At some point, I will throw in the towel, but your attitude is so extreme, unfounded and misdirected (in that you don’t appreciate what is causing the things you are upset about…i.e. crony capitalism), that I am giving it one last try….
Your position is much like being upset about some large scale epidemic of illness, and focusing your anger on the people trying to come up with a vaccination. “Those vaccinations cause horrible side effects! It’s wrong to spend so much money on them! It’s a scam! A conspiracy! We don’t need them!” Instead of focusing on the cause of the problem (i.e. the source of the epidemic), you are focusing on the ineffectiveness or externalities of some proposed solutions. You need some help understanding this disconnect, and that’s what I’m trying to provide.
Let me demonstrate what I mean by comparative evidence:
A1) Tehri Dam: 100K population displacement and resettlement conflict; societal disruption; sensitive and rare environmental destruction of 40+ sq miles; seismic risk; flooding risk (and consequent population displacement possibly >20K); major corruption issues; net quality of life benefits to (non-displacement-affected) surrounding population in energy production, improved infrastructure, jobs.
B1) Niger Delta: 30Million population toxic poisoning and premature death; societal disruption; ongoing sensitive and rare environmental destruction of 30,000+ sq miles (10Million gal spill each year; pollution; forest clearing); major corruption issues; net major degradation of quality-of-life issues to surrounding population in increased violence, illness, poverty, oppression, exploitation.
So to make this comparison “apples to apples,” lets use MWh of potential energy production:
Tehri Dam: 2175000 MWh/yr
Niger Delta: 3256000 MWh/yr (using BOE=1628kWh)
So according to your position, Chet, the Niger Delta oil operations should be far less destructive in every way than the Tehri Dam. Instead, they are more destructive by factors approaching 200 to 600 times the actual AND potential destruction caused by Tehri per MWh - using any metric (societal, health, environment, ecology, lifespan, corruption, violence, cultural disruption, etc.). And that’s being generous, because really if we include the stats for the entire Tehri Hydro Power Complex, the comparison would make the Niger Delta more than 500 to 1500 times worse per MWh. And that’s not factoring in the benefits that the Northern Region receive from the dam (as opposed to the tragic lack of any benefits the people of the Niger Delta receive).
And this is just one example! And I could easily provide dozens more. This is why people are “targeting” fossil fuel - not because it is a convenient scapegoat, but because oil and gas extraction are horrifically destructive…and getting more so as oil and gas become more scarce and challenging to extract. This is why this isn’t a boxing match, Chet: you are simply, utterly, completely and tragically mistaken. So I would strongly encourage you to consider what “Kool-Aid” others have been feeding you, rather than thrashing around Quora with more ill-informed accusations. Your theory simply isn’t supportable with facts.
To fully appreciate the impacts of fossil fuels in only the areas we’ve been discussing (local environment, culture, etc.), I recommend you research something called “the oil curse.” Here are some links:
Why Natural Resources Are a Curse on Developing Countries and How to Fix It
Dutch disease and What Dutch disease is, and why it's bad
Now regarding population, I completely agree with you there. Human beings are just an incredibly destructive species. But this has zero correlation with supporting global population with a combination of renewables and conservation (energy use reduction), which almost always go hand-in-hand where the ROI is clear.
As to your statement “Now tell me why are effects of damming rivers not studies as extensively as environment impact of fossil fuels.” This is again is completely ridiculous statement - an utterly false premise. Just Google “Tehri Dam” and “controversy” and see how may political and environmentalist articles show up that are critical of Tehri and the Indian government - do those petitions, protests, ecological studies, demonstrations, etc. compare in size and scope to, say, the petitions, demonstrations, studies and protests around tar sands in Canada…? I think so Chet. I think so.
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