If you can imagine Elon Musk as some sort of wartime business leader, then you can understand the pressures the Tesla CEO has to deal with.
“The wartime CEO is someone who is constantly paranoid, worried how his company might fail, and be vulnerable to attack,” says Hamish McKenzie, author of the new book Insane Mode: How Elon Musk’s Tesla Sparked an Electric Revolution to end the Age of Oil.
Any possible Muskian paranoia is probably justified, adds McKenzie, because Tesla is coming up “against established industries like auto and oil, and you have to have this mindset that you are constantly under attack.”
McKenzie’s book works on two levels: it’s a detailed (sometimes overly detailed) look at how Musk brought the Tesla to market, focusing on the problems inherent in an automobile startup, and the advantages of an all-electric car. And it’s a primer on electric car startups worldwide (primarily in China), what they will mean for the future of the oil and gas industries, and their role in climate control.
“We need the push for electrification,” says McKenzie. “The climate is changing rapidly, and one of the drastic things that needs to happen is we need to get off fossil fuels, and replace cars with electric vehicles.”
Insane Mode—named after an acceleration option on one Tesla model--is particularly good at showing the barriers Tesla had to overcome before it entered the marketplace. First, there was figuring out how to build an affordable auto, which meant hiring good designers and engineers. There was also the need to build a factory, convince suppliers to work with them, and setting up a sales strategy and service network.
In addition to all this, the company, which wanted to sells its cars directly to the consumer, discovered that this was illegal in a number of states, thanks to pressure from car dealerships afraid that traditional automakers would want to do the same.
Then there were a number of high profile fires involving the car and its lithium ion batteries, and what became known as “range anxiety,” consumer fear that the cars would run out of power before they reached a place where they could be recharged.
Tesla still hasn’t solved the affordability issue—the cheapest model runs around $45,000, although tax rebates will supposedly bring that cost down to around $35,000—but “range anxiety” has basically been eliminated, now that the company has set up more than 1,000 “Supercharger” sites across the country, which can charge a car in under an hour.
Tesla, and all electric vehicles, have also had to deal with skepticism about just how clean they really are. Sure, they’re a non-polluting form of transportation, but the power source that runs them could be originating from coal-fired power plants, which are about as dirty as they come. “Even when these cars are relying on a power source from the dirtiest coal,” says McKenzie, “their total carbon footprint is lower than the most efficient gas vehicles. The fact is, coal plants are shutting down, and coal is going away as an energy source. Once you add renewables into the mix, increasingly the electric grid in the U.S. is becoming more clean.”
McKenzie says it’s important to remember that Tesla’s first car, the model S, came out in 2012, which means the company is a relative baby, in the manufacturing business for only six years. This youthfulness tends to affect Tesla’s reliability. The company, says McKenzie, has “quality issues. They are not out of the woods yet, they are still learning to be a mass manufacturer. To go from that one car that came out six years ago to producing 5,000 cars a week, is a massive undertaking. A lot of that will come down to Tesla learning how to be a car company.” In fact, the company’s reliability rating came in third-from-bottom in Consumer Reports’ latest rankings of 29 car brands, thanks to issues with the Model S’s air suspension system.
And yet, the Model S was named Motor Trend’s car of the year when it was introduced. That first model had a 265 mile range, 416 horsepower, and could go from 0-60 in under five seconds. I recently test drove a Model 3, which has an opulent interior featuring a dashboard mounted computer that controls all the car’s functions. It also has more trunk space than a conventional car, since there is no engine (the batteries are underneath the body of the car), a range of over 300 miles, and can go from 0-60 in 3.3 seconds (the acceleration is mind-boggling). It’s an impressive, albeit expensive, auto, definitely in the luxury class.
But Insane Mode is not just about the Tesla. It is as much about how Musk’s car has truly jump-started a revolution in manufacturing, and how big boys like VW, Volvo, Nissan, BMW, and other auto makers are getting into the electric car business (Musk has said, “We hope the big car companies do copy Tesla.”). Even more impressive is that the Chinese, fighting traffic gridlock and health-threatening pollution, are getting into electric in a big way—in 2016, the country had more than 200 manufacturers of new energy vehicles. Companies like China’s BYD are also producing electric buses, taxis, forklifts, and concrete mixer trucks.
Tesla is currently building what it calls a “Gigafactory” in Nevada, which aims to be the world’s largest building, and will produce lithium ion batteries in quantities so massive that it will help lower the cost of its cars. McKenzie says the combination of solar power and good, cheap batteries could absolutely transition the world away from fossil fuels. And a Bloomberg New Energy Finance study estimates that by 2040, 55 percent of all new car sales will be electric.
Musk has long made it known that he got into the auto business because he wanted to accelerate the death of fossil fuel usage. And he has gone so far as to make Tesla’s patents available to those who want to use them in “good faith,” saying the open source policy's goal is to help stem climate change. "It is impossible for Tesla to build electric cars fast enough to address the carbon crisis," Musk has said.
What all this anti-fossil fuel, pro-renewable energy activity means, says McKenzie, is that within five years, “Tesla will have millions of cars on the road (about 200,000 are currently on the road ), other electric car companies will have hundreds of thousands of cars on the road, and in China, nearly 10 percent of all cars on the road will be electric. Demand for oil will have peaked; growth for oil will go in reverse. The auto and oil industries will be in a panic.”