Elon Musk. Photo / AP
Elon Musk was up early on Saturday. He departed Los Angeles, where he runs SpaceX, his private rocket venture, and flew north in his white Gulfstream jet.
Stopping in Silicon Valley, he picked up two engineers from Tesla, his electric-car company. They flew on to Reno, Nevada, where they spent the day at Tesla's battery plant, the Gigafactory.
It might have been just another workday for Musk — a multistate jaunt to personally fix a drive-unit production line. But this was no ordinary morning. He was a brief night's sleep removed from one of his most consequential decisions: scrapping his plan to take Tesla private.
It was an abrupt about-face, and it capped a tumultuous 2 1/2 weeks that began with a single tweet and wound up roiling markets, setting off regulatory alarms and raising questions about his judgment.
Even by Musk's standards — this is a CEO who believes Tesla is under attack by saboteurs, has a personal life playing out in the gossip blogs and is prone to fiery outbursts on Twitter — it has been a time of high intrigue.
"The reason Elon seems to attract drama is that he is so transparent, so open, in a way that can come back to bite him," said Kimbal Musk, Musk's younger brother and a Tesla board member. "He doesn't know how to do it differently. It's just who he is."
Musk, a brilliant but erratic billionaire, is the animating force behind Tesla, responsible for everything from its push into renewable energy to the design of the air vents in its newest electric car.
His singular role gives him extraordinary influence over the fate of Tesla, its more than 40,000 employees and its investors.
Associates, including several people inside the company interviewed over the past week, portray him as a workaholic who zeros in on the smallest details.
His deep involvement suggests that the company can't do without him. Yet these days, it's not always clear that he knows what's best for Tesla.
In an interview this month with The New York Times, Musk said he was physically exhausted and emotionally drained, causing some to question his fitness for the job.
At the office, he is hardly a typical chief executive. Racing to resolve critical production issues, he can often be found on the factory floor, working to fix robots.
At night, he sometimes sleeps under his desk. All the while, he has been confronting an exodus of senior employees, preparing to be interviewed by the Securities and Exchange Commission, and was working with Goldman Sachs and Saudi Arabia's sovereign wealth fund to take Tesla private — until he wasn't.
Some board members have been dismayed at Musk's behavior, according to people familiar with the directors' thinking, but no active search is underway for a replacement — although there have been fitful efforts to find a top lieutenant.
James Anderson, the head of the asset management firm Baillie Gifford, Tesla's biggest shareholder after Musk, said he still had faith in the 47-year-old chief executive, calling him a "visionary leader" who had unmatched technical expertise and remained "obsessive about the details."
Yet Anderson said he had grown increasingly worried about Musk, believing that his volatile personal life and intense work ethic were taking a steep toll.
"He is so demanding, so driven by the imperative to do something good for the world," Anderson said. "You could always see something like this happening."
At 6:30 a.m. on August 18, three robots in the paint shop at the Tesla factory in Fremont, California, started malfunctioning. The incident forced a production halt on the Model 3, the key to the company's future.
Made aware of the stoppage, Musk went to the factory and worked into the night. The problem was resolved, but Tesla reached a troubling conclusion: The robots had been infected with malware in an act of industrial sabotage. And though they could not prove it, and did not level any specific allegations, executives suspected they knew the culprit: a rogue employee, working at the behest of short-sellers.
Tesla is among the most shorted stocks, meaning that hedge funds are betting against it and quick to note a missed production goal or cash shortfall. David Einhorn, the billionaire founder of Greenlight Capital, is in that camp. In a letter to investors last month detailing his argument, Einhorn wrote, "Elon Musk appears erratic and desperate."
Musk believes that the short-sellers spread misinformation about the company, and perhaps much worse. In June, Musk accused an employee of sabotage that had slowed Model 3 production, and suggested short-sellers might be to blame.
Kimbal Musk, reflecting on the battles with short-sellers, said, "We feel like we are at war."
When Musk ceremonially unveiled the Model 3 last summer, he billed it as the first mass-market electric vehicle, and predicted monthly production of 20,000 by year's end. But in the final three months of 2017, just 2,425 were completed.
The delays were a result of what Musk called "manufacturing hell," an inferno that has preoccupied him for much of the past year.
"This has been the most difficult time for Tesla," said JB Straubel, the company's chief technical officer. "We knew this was going to be the case, but it's been even harder than any of us expected."
Some of the wounds were self-inflicted.
In preparing the assembly lines, Musk became convinced that the process should be close to fully automated, using robots rather than humans whenever possible.
So Tesla built a factory with hundreds of robots, many programmed to perform tasks that humans could easily do. One robot, which Musk nicknamed the "flufferbot," was designed to simply place a sound-dampening piece of fiberglass atop the battery pack.
But the flufferbot never really worked. It would fail to pick up the fiberglass, or put it in the wrong place, frequently delaying production. It was eventually replaced by factory workers.
Musk has accepted responsibility for some of these missteps. After the debacle, Musk tweeted: "Excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated."
As the challenges have mounted, Musk has thrown himself into his work, spending hours each week walking factory floors, trying to diagnose and fix various problems on the assembly line.
Musk's micromanaging has taken a toll on Tesla's executive ranks, with more than 30 senior employees having departed since 2016, according to a list compiled by Reuters. Among the departed are the director of battery engineering, the vice president for autopilot and the director of manufacturing engineering, all positions crucial to Tesla's future.
On Thursday morning, Musk addressed his board at a hastily convened meeting in a conference room at the Tesla factory. His sleeping bag was still on the floor. When he announced that Tesla would be staying public, at least one director cheered out loud.
Musk's stunning reversal came about after he realised that while going private would remove some headaches — such as short-sellers — it could introduce others, including entanglements with conventional auto companies or oil kingdoms that hardly symbolise an all-electric future.
But the move didn't provide a full reset. There is a looming investigation by the SEC over the circumstances of his August 7 tweet announcing that he had "funding secured" to take the company private, an assertion that proved shaky.
As he juggles these disparate challenges, Tesla's fans and foes will be scrutinising Musk's words, his actions and even his moods.
- Copyright New York Times 2018
Campbell asks if interview is 'weaponised'; Act says it's giving viewers the full picture.