Tesla Motors Boss Elon Musk tells: How to make a small fortune

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By John Cadogan | May 31st, 2010

Here’s how, apparently: Start with a really big fortune, then begin your very own green car company. You should have a small fortune in no time – cue the super-wealthy whiz-kid example…

Elon Musk, the multi-millionaire founder of Tesla Motors recently filed court documents to the effect that he’s strapped for cash, and has been surviving these past few months on personal loans from rich friends. Apparently he’s been spending about US$200,000 a month but bringing in only about US$8000.

He’s down to his last US$600,000. That’s gotta hurt, right?

It’s increasingly the American way. But an amazing achievement nonetheless, given the US Government’s recent proclivity to sling billions of greenbacks at emerging green car tech.

Musk sold another company you might have heard of – PayPal – to eBay for US$1.5 billion back in 2002. That must’ve felt good. He was the founder of PayPal, and also the company’s largest shareholder at the time of the sale, holding 11.7 per cent of PayPal’s shares. Enough to live large for, subjectively, eternity – or so it seems.

He’s a smart boy, too. He has degrees in economics and physics. For what it’s worth, Musk was also the inspiration for director Jon Favreau’s and actor Robert Downey Junior’s portrayal of Tony Stark in the Iron Man movies.

Unfortunately, according to CNN Money and Forbes this week, Musk appears now to be bereft of cash – which could be a problem for Tesla, in which he is not only the co-founder but also CEO, chief product architect and lead financier.

The announcement comes at a crucial time for Tesla. Last week, Toyota announced it would ante-up US$50 million to invest in Tesla, while Tesla has its sights set on acquiring one of Toyota’s plants (at a time when Toyota has spare production capacity to burn).

But the Toyota cash isn’t confirmed until Tesla floats some shares to the public – so the big deal’s way up in the air, with no date set on the initial public offering.

Perhaps it’s just a bankruptcy of convenience. Mr Musk is getting divorced right now – from sci-fi novelist Justine Musk. Good personal timing to be down to your last $600k, then – but maybe a bad omen for Tesla.

And also a warning to you about the pitfalls of starting a car company in the garage at home. You can dream such romantic notions – just don’t act them out. You’ve seen what can happen

Shak

This guy should recieve a medal for the dumbest exec. He made a 1.5 billion dollar fortune only eight years ago. Then made the worlds first EV sports car, and has 600k left and he is whineging. Wow,the money really went to his head.

Andronicus

Dont be a fool, he didnt receive $1.5 billion dollars from the sale of PayPal. Yes he received a big chunk of change but it was no-where in the vicinity of this amount.
I think he should be commended for doing what he has done. Not only has he attempted to pioneer the future of the electric car but also has had success with his other companies, specifically SpaceX which was awarded a $3.1 billion contract from NASA to produce craft which are reusable and cheap to run, setting in place what will one day mean cheaper orbital flights and transport for NASA.

The guy is out there ‘doing’ rather than sitting on his fortune. This current proceedings is just in relation to his divorce, he still has a net worth in excess of $350 million but only cash reserves of $600,000. He wont be broke anytime soon.

Good on him I say, made his own car company; started his own space agency….living every kids dream.

Paul

He’s the definition of ‘Space Cadet’ this guy.

Used his Internet fortune to started a rocket company so he can ‘travel to other planets’. Is such an ego maniac he thinks Nuclear Fusion would be a ‘fun’ problem to solve and … he’s swapping the mother of his 5 kids for some movie starlet in her 20s…(the divorce surely the real reason why he’s crying poor)

Talk about someone who believes his own BS. What a loser!

And the Iron Man thing is the biggest load of rubbish, the guy hasn’t developed ANY technology beyond the database applications behind the web sites he sold a decade ago.

Reckless1

My god – talk about a loser calling this guy a loser!!

Tell us your success story, Mr Paul……what? nothing? just as I thought.
Handsome_Al

Have you ever developed ANY technology beyond the database applications behind the web sites that you have ever sold to anyone a decade ago and make a fortune out of it, PAUL??

Ridley

His company got undeserved attention. DC power and electric motors aren’t exactly new.
He just launched the car at the right time with all the save the world marketing going on

His electric car has received too much praise, its hardly revolutionary. The documentary “who killed the electric car”, should have received that attention.

Had he put that money into affordable electric cars… now there he would have had a winner.

Philthy

“Hardly revolutionary”… really? Who else has built anything remotely like it? You? Give the guy a break. He ploughed a fortune into development of electric cars at a time that the big motor companies were too complacent to do anything at all. I hope Tesla makes a comeback and Elon makes another $1.5 Billion. Why don’t you shove your tall poppy garbage.

Ridley

electric motors are not new, how old are the trams?

watch “who killed the electric car” battery powered cars are not some break through technology, dc power and motors have been around for quite some time

Handsome_Al

It is revolutionary in its own packaging.. Tesla tries to mass produce an electric car not a public transport. Tesla tries to change people perception of Electric Car. Tesla tries to capture car enthusiasts market without making them leave their comfort zone. That’s why it looks like a Lotus and develop by lotus. Tesla also tries to make the more affordable electric car. Otherwise you can also say that there is nothing revolutionary about 3D tv.. coz the techonology has been there for decades, but you just need to go to a special cinema, ditto with Plasma TVs…
Bugs Bunny

Electric cars that have more torque than a Porsche and a 200+ mile range are indeed new. Speed, acceleration and range were huge obstacles to widespread adoption.

As for Elon- mighty convenient to “run out of cash” in the middle of divorce proceedings. He certainly hasn’t run out of wealth, just liquidity – his choice.

Andy

Shows what you know, Telsa uses AC motors driven by DC… And the tesla innovation is to make electric cars that people want – first for the rich (roadster), then for the upper middle class (model s) and maybe eventually for the masses

Tom22

Ridley, what he did was release a seemingly large, highly marketing brand name from inside the states. Except they havn’t done anything, yet. Personally i don’t think the government would let tesla fail, if one american electric car company is going to succeed, why not tesla…
orfroader

Yeah it’s blokes like Musk that pioneer and finance new technology that in this case we desperately need. Especially if we just waste precious oil by pumping it into the ocean.
I work for Toyota and am rather pleased about the two joining forces to use each others abilities to help make more affordable or enjoyable electric vehicles for the masses. Maybe then we can move on from Hybrid tech which is only a stopgap measure util we go full electric.
We all should Praise a guy that invests so much of his own money into new technology so we all get the benefits down the track.