When technology journalist and former Listener writer Hamish Mckenzie approached Elon Musk about penning his biography, he didn’t expect to end up working for the billionaire Silicon Valley entrepreneur.
It was 2013 and McKenzie, a University of Otago graduate who grew up in Alexandra, was writing for the influential tech blog Pando Daily, where he devoted many words to Tesla.
The electric car company run by Musk had started the year close to bankruptcy.
“I was living in Baltimore at the time and working out of my spare bedroom,” says McKenzie. A non-fiction editor got in touch sounding him out on writing a book about Musk.
McKenzie pitched Musk the idea and received an unexpected response.
“He said he was thinking of writing his own book. Then he asked me if I would be interested in a job at Tesla as a writer.”
A few months later, McKenzie joined Tesla and spent the next year on a “rollercoaster ride” working for one of the most closely scrutinised companies in the world. Tesla was still recovering from a major crisis that had generated plenty of bad press and dented its share price.
Late in 2013, several Tesla Model S luxury sedans had erupted into flames after debris striking the cars’ underside had damaged the lithium-ion battery pack and cooling system. By the time McKenzie arrived, Tesla had addressed the problem by adding a new underbody plate to the Model S.
But 2014 also saw the company in hyper-growth mode. It completed a charging network stretching from Los Angeles to New York that allowed Model S owners to recharge their car battery as they crossed the country. Tesla launched in China during the year and produced its first right-hand drive cars for the UK and Hong Kong markets. By year’s end, the Model S, the cheapest model priced at an eye-watering US$70,000, was the world’s second best-selling fully-electric car behind the boxy Nissan Leaf.
McKenzie spent the year as the only writer in Tesla’s small communications team, churning out blog posts and press statements, even crafting marketing emails to customers. The experience convinced him that he wanted to return to journalism, but also saw him again pondering that book project.
Now however, it wasn’t a biography of Musk he had in mind.
The book he spent three years working on and which went on sale this week, takes a broader view of Tesla and its role in kick-starting electric car sales.
Insane Mode: How Elon Musk’s Tesla Sparked an Electric Revolution to End the Age of Oil is as much about Tesla’s impact on other car makers, many of which spent the best part of a hundred years resisting any threat to the internal combustion engine.
The title derives from the ‘insane’ driving mode introduced to a new dual-motor Model S released in 2014 while McKenzie was at Tesla and which allowed the car to accelerate from zero to 60 miles per hour in just 3.2 seconds.
It’s an apt metaphor for the company. This year alone, Tesla has seen its mercurial CEO removed as chairman of the company and fined US$20 million for a rogue tweet about returning the company to private ownership, launched a Tesla roadster into space on a rocket produced by his other company SpaceX, and engaged in a bizarre fight with one of the rescuers of the Thai boys stranded in flooded underground caves, calling the experienced cave diver a “paedo” on Twitter.
But you won’t find similarly crazy anecdotes and shocking insider accounts in Insane Mode.
“I’m NDA-ed up on this stuff,” says McKenzie. Which is to say that he could be sued for breaking a non-disclosure agreement signed with his former employer if he were to dish its secrets. For those, you have the 2015 best-selling biography Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future, written by journalist Ashley Vance. McKenzie describes Vance’s book as “a very good reflection on what Elon is like as a person, what he is like to work with”.
McKenzie was never “best buddies” with Musk.
“We had plenty of contact particularly in the early months,” he says.
“Later on, the dynamic changed, which was another reason I wasn’t keen on sticking around too long.”
He took a different tack with the book, preferring not to have Musk involved at all. “I ultimately made the decision to be almost ridiculously distant,” says McKenzie.
“It had the effect of sharpening the focus on the revolution and reducing the focus on the circus.”
Insane Mode is constructed from published interviews with Musk and other Tesla executives, company press releases, product launch presentations and interviews, mainly with Tesla’s rival electric car makers.
The overall impression is of a company that, against the odds, has created consumer appetite for electric cars to the extent that the auto industry is slowly but surely on the way to beginning phasing out gas-guzzling engines.
First, the electric cars have to look good. There are strong parallels between Musk and Steve Jobs’ vision for Apple products. There were smartphones before the iPhone, but his phone started the revolution.
“Tesla really changed the perception of what an electric car could be,” says McKenzie.
“There was this really strong sense of mission, that Tesla was here to end the world’s reliance on fossil fuels. We are all going to shift to electric cars and we are going to love them. It won’t be a compromise.”
Musk also had cash to put behind the vision, thanks to the US$165 million he received when his first big company PayPal, was bought by online retailer eBay in 2002. But making cars and financial ruin go hand in hand.
Tesla has been close to going under several times in its history, which pre-dates Musk. He invested in the year-old company in 2004, parted ways with the original founders and took over as chief executive in 2008, just as the global financial crisis hit.
Musk has described 2008 as the “the worst year of my life”. Tesla had production issues with its first car, the roadster, and things weren’t much better at his other company SpaceX, which had failed three times to get its Falcon 1 rocket to successfully deliver payloads into orbit.
A fourth launch attempt that September was successful, giving NASA the confidence to award SpaceX a US$1.6 billion contract to deliver cargo to the International Space Station. Then, on Christmas eve, Tesla investors agree to refund the car company, saving it from collapse.
Tesla’s first car, the roadster, then the Model S and Model X, have all won praise for their design. But they are luxury items. The key to the electric car succeeding as a mass market vehicle, is the Model 3, Tesla’s mid-size sedan, which aren’t on sale in New Zealand yet. The cheapest model Tesla on the market here currently, the model X, starts at $92,000.
The Model 3 was this year plagued with delays and production issues. But Tesla is now able to make 5,000 of the cars a week. The entry-level model costs US$45,000. At that price, McKenzie can’t afford one.
“I’m waiting for the $35,000 one which is probably about six months away.”
But a US$7,500 Federal rebate on each Tesla car will see those who receive theirs before the end of the year get a sharp deal on going electric.
“It is a car that performs at a much higher level at that price point,” says McKenzie.
“If you factor in the ownership and refueling costs being lower, it becomes extremely competitive.”
At $35,000, the Tesla will cost around the same as the average new car sold in the US (US$36,270) and could become one of the best-selling cars of all time, the equivalent of Ford’s Model-T.
The falling cost of batteries – Tesla has its own Gigafactory churning them out, will be key to the price going lower, says McKenzie.
“Even the Model 3 could be selling for $25,000 in around five years if the current battery prices continue on their current trajectory.”
China is now key to the electric car market in general. Tesla is hugely popular there, but a wave of Chinese car makers, such as BYD and Nio are emerging, with the manufacturing scale to radically expand the market.
As for the traditional European, US and Japanese car giants, VW is the most ambitious with its electric car vision.
“But it took the biggest corporate scandal in automotive history to make them change and do the right thing,” says McKenzie, referring to ‘dieselgate’ which saw the German car maker program software in its diesel cars to make them appear to produce less emissions than they actually were. That particular scandal cost VW at least US$30 billion in various fines.
Ford, GM, BMW, Volvo and others have all developed electric cars and will spend billions on them in the coming years, as well as making them increasingly autonomous with the true driverless car as the end goal.
“But they are trying to have it both ways,” McKenzie says, who points to the vast numbers of gasoline-powered cars they are still shipping every year.
“They are not moving nearly aggressively enough and they are going to strike trouble.”
If Tesla went out of business tomorrow, it would leave a proud legacy. But with the Model 3, it has the potential to become a “truly gargantuan company,” says McKenzie.
“I don’t think Tesla is out of the woods. They’ve still got quality issues being reported a lot with their cars, they are still run by a guy who is also running a spaceship company and a tunnelling company and a neural net company,” he says.
“People need to strap in for a wild ride for a bit longer yet.”
But he thinks Musk will succeed in the end.
“He’s a Thomas Edison like figure,” says McKenzie, who is now on his own entrepreneurial path, co-founding media start-up Substack, based in San Francisco.
“You combine so many things in this one personality that are so rare. Elon doesn’t come around every decade, he comes around maybe once a century.”
Insane Mode: How Elon Musk’s Tesla Sparked an Electric Revolution to End the Age of Oil, $32.99, Faber & Faber