A future look at what could become Musk Industries

"DCCARGEEK" (dccargeek) 03/02/2014 at 18:21 • Filed to: Tesla, Elon Musk, The Future

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If you've been anywhere on the web or television you've likely seen the laughable hockey stick increase of Tesla Motor's stock price. At this rate they'll soon be more valuable than Facebook, a website that archives your family photos.

Before I get started I have to admit something - I don't fully understand the stock market or what magic formula determines a company's future value.

How limited is my knowledge?

A friend and I once played a game where we took $500 and purchased new stocks (IPOs) with a goal to see who could net the highest return at the end of three months. He spent hours doing analysis, researching companies, technology, market demands, regulations, etc. Me? I picked ones with cool sounding tickers, or as I called them back then stock acronyms . Needless to say my friend made out better than I did.

Getting back to Tesla…

While financial analysts continue to argue over the true value of Tesla Motors, I can't help but feel that Elon has a much larger blueprint still to unfold. I'm not talking diabolical villian a la Lex Luther and his plot to sink half of California. Think more like Wal-Mart of Energy, Google of Gigawatts…bad puns aside, you get the point.

By now we all know Elon does a few things – operates a rocket company, a car company, has his hands in the solar capture business and will soon be a battery maker.

The graphic above is my data-deprived vision of the Elon Empire blueprint.

From roadsters to rockets

Tesla Motors is growing, both in volume and geography (Hello China!). Owners love their cars. Journalists, surprisingly, have few, if any, negative criticisms for the car. The company is doing well and depending on future product, and a lack of any major disaster, they should continue to do well, experience growth and make more money. Yay for profits!

Now this is where things get a bit interesting and are 100% speculation on my part. I'm a dreamer which means I tend to neglect things like physics or costs.

The world needs dreamers. Plus, reality checks are why God created accountants.

So Tesla has, presumably, an abundance of knowledge when it comes to batteries. They aren't skilled at building them (yet) or modernizing them (to my knowledge), but they know how to make them perform in vehicle applications.

You know who else has a great need for batteries, besides me for my baby rockers that eats 16 C-batteries a month, the U.S. Government. Ah yes, Uncle Sam. The same entity that loaned money to Tesla Motors a few years ago.

Government's Demand for Energy Storage

According to a 2012 GAO report the federal government spent $1.3B in three years (2009-2012) on battery and energy storage research .

Keyword, RE-SEARCH. These expenditures weren't to purchase equipment or technology, but rather just a can-we-build-it design exercise. These projects included everything from weapons systems to propulsion for vehicles.

Some of these projects were conducted by universities and federal labs, but industry got a good piece of the work too.

The military is looking at everything from directed energy weapons (Fire photon torpedo!) to ways to make electronic bad-guy-grabbing gadgets more portable, lighter, stronger and more energy efficient.

Now, this isn't to say that Musk Industries (remember, we created this company earlier) is going to jump into the world of building boosters for the next round of ICBM exoatmospheric kill vehicles or design the next spy satellite, but if the Musk Industries Board of Directors decided they wanted a bigger piece of the military industrial complex pie (Space X is on it's way to with Air Force certification)– the door is wide open.

But it isn't just all about war.

Many of the military's needs for energy storage and power solutions align, and are easily transferred, to the public sector.

For example the Army has spent funds looking for ways to develop technology to:

" manage, distribute and store energy in bases of all sizes (from tactical contingency bases to large fixed installations) and the development of microgrids and other architectures for power management ."

As more efficient and cost-effective ways come to market that allow the public to produce or harness energy, having personal energy storage systems or neighborhood microgrids becomes a very attractive thing. I can't say I agree that the Pentagon is the right place for the development of future technology, but it will continue to be that test bed simply because it's the largest and most protected federal fund in Washington.

The GAO report goes on to highlight other needs for advanced batteries and energy storage such as space exploration and balancing grid demand (Thanks electric cars!). Again, it seems the government could easily welcome an expansion of Elon's flourishing technology empire.

If I were playing my old IPO game and could invest in one that represented profits from all of Elon's ventures depicted in the graphic, if I could invest in say, Musk Industries, it would seem less risky than investing in just a car company.

Then again I'd probably invest in $MUSK just because I like the ticker better than $TSLA.

For now Tesla is a car company, Space X is a rocket company and Elon Musk is just an ambitious guy running those companies. One day he could assemble all of the pieces under a Musk Industries umbrella, but until that time he'll likely continue to do what he does best – run his companies, prove people wrong and make very neat things.

SnowBallin > DCCARGEEK 03/02/2014 at 18:30

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Very interesting piece. I liked the analysis from a non-finance point of view. It puts things in perspective

I bullish TSLA. It will continue to make money and innovate. The sky is the limit for them

Tom McParland > DCCARGEEK 03/02/2014 at 18:41

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Always enjoy your analysis Juan. So the TL:DR version is Elon Musk = Tony Stark

DCCARGEEK > Tom McParland 03/02/2014 at 18:46

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Yes, but rather than just speculate, I speculate with wildly unlikely scenarios.

nmalinoski > DCCARGEEK 03/03/2014 at 09:58

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Are you sure that's where the battery should go? Seems a bit vulnerable.

DCCARGEEK > nmalinoski 03/03/2014 at 10:00

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Think internal, you know, where people sit, behind almost a foot of impenetrable metal.

Also keep in mind many of these military vehicles demand lots of energy just to run their advanced targeting and optic systems.

shieldsdb > DCCARGEEK 03/03/2014 at 10:06

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The Army fooled around with hybrid HMMWV's about 12 years ago. Cost wise, it just didn't work out at the time. You also have to look at the maintenance side. Most vehicles can be fixed by any knucklehead 20 year old with a crescent wrench. Not to mention, you can never predict the pace of battle. Stopping to recharge your vehicle really isn't an option. I think the tech needs to come a lot further before the military fully embraces it.

spanfucker retire bitch > DCCARGEEK 03/03/2014 at 10:10

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Although the Space Shuttle used batteries, its main source of electrical power was Hydrogen as it used a fuel cell system.

Something Musk has an irrational hatred of.

DCCARGEEK > shieldsdb 03/03/2014 at 10:11

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I highlighted the basing and fixed applications as like you I share the Sam concerns regarding drive systems. But if you role around w/ some type of vehicle mounted AEGIS system (made that up) you'll need lots of power. So the wheels might not be driven by electrons but many of the systems could be. But like I said this is many a large application like basing short-term COOP.

macanamera > DCCARGEEK 03/03/2014 at 10:11

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Hes really been aging rapidly lately...

shieldsdb > nmalinoski 03/03/2014 at 10:11

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Plus, the power consumption of a M1 is quite a bit. Engine, targeting systems, turret power, etc.

And if you've ever been in one, there ain't a whole lot of room.

DCCARGEEK > spanfucker retire bitch 03/03/2014 at 10:12

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But many of the deployable things, the stuff a shuttle and rocket will deliver, will function off batteries and some
Kind of solar capture. The shuttle is just to signify space and shouldn't be viewed as limited to manned shuttle missions.

erikgrad > DCCARGEEK 03/03/2014 at 10:13

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It all makes sense to me - except you forgot the Hyperloop! I can only assume an improved proprietary electrical grid will be integrated along the path of each tube...

willkinton247 > DCCARGEEK 03/03/2014 at 10:14

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but what bout the risk of fire? dont all teslas catch on fire? the army doesnt like fire

//joking.

HiramJahoovafatJr > DCCARGEEK 03/03/2014 at 10:15

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Tesla is still having trouble with cheap Chinese charging cables...

StevenG > spanfucker retire bitch 03/03/2014 at 10:15

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If by irrational you meant totally rational then yes.

Fuel cells require steam reformation of natural gas and as such are less efficient than just burning the natural gas. Fuel cells are also crazy expensive.

shieldsdb > DCCARGEEK 03/03/2014 at 10:15

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I agree with you. We also had testing on HMMWV mounted laser systems that used batteries, they just weren't able to hold enough power at the time.

This shit is on the horizon, just wait. Hell, the Air Force has been testing (they might be using it by now) with bio-fuels for their aircraft.

macanamera > DCCARGEEK 03/03/2014 at 10:15

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!!! UNKNOWN CONTENT TYPE !!!

Yes, yes, something like that...

DCCARGEEK > erikgrad 03/03/2014 at 10:16

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I think Elon walked away from Hyperloop knowing full well it was unattainable in his lifetime. Therefore it was dropped from actionable items on Musk Industry to-do list

DownTheLiffeyOnADonut > DCCARGEEK 03/03/2014 at 10:18

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Needs moar Arc Reactor.

erikgrad > erikgrad 03/03/2014 at 10:21

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Also, a bonus illustration from the Hyperloop presentation, which appears to predict a rise in the popularity of Steampunk culture...

...But in reality, is just the original idea for pneumatic transit: http://en.wikipedia.org/wiki/Pneumatic…

CCC (formerly CyclistCarCoexist) > DCCARGEEK 03/03/2014 at 10:23

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A good question is do we have enough lithium for this?

ThatOtherZharng > nmalinoski 03/03/2014 at 10:24

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Used to be Leo 2 crew here. Not sure about the M1, but the Leo kept its batteries on both sides of the engine bay, behind the turret ring and under access covers made of armour plate. Barring an attack from above, they're safe.

spanfucker retire bitch > StevenG 03/03/2014 at 10:26

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No, I definitely mean irrational.

erikgrad > erikgrad 03/03/2014 at 10:27

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Illustrations courtesy of Nibbles, unless they are in some sort of queue that allows them to upload later

Mark Schmidt > DCCARGEEK 03/03/2014 at 10:28

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So if my math skills serve me.

Musk

=

Racescort666 > DCCARGEEK 03/03/2014 at 10:35

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I think the other thing too is that he's looking for someone else to come in and pick up the ball. He may build a proof of concept on his own but I doubt the entire project would be funded out of his pocket. IIRC, his proposal didn't include cost of stations and depots at the ends of the lines or how cars would get into the tunnels, only the infrastructure to support the tunnels, cars themselves, etc.

Another thing to note, his proposal isn't that much different from the one done by Rand in the 70s. People have effectively been sitting on this for over 40 years with pretty much zero progress. The only way it will happen is if someone bucks up and pays for something out of their pocket with little hope of return. Musk has done this in the past and he's an ambitious guy but not that ambitious. Particularly because, as far as the state government is concerned, they already have a solution that's less extreme than what the proposal says.

Skunk > nmalinoski 03/03/2014 at 10:39

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This is a marketing poster. How is this even an argument?

mrsmartypants > DCCARGEEK 03/03/2014 at 10:47

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I would put most of my eggs on the military basket…..guaranteed $$$$$

Vincent Davidson > CCC (formerly CyclistCarCoexist) 03/03/2014 at 10:49

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Canada does. So, as long as we don't pull a Crimea on them, it should be ok.

#toosoon?

xtrappedunderricex > DCCARGEEK 03/03/2014 at 10:53

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cue AC/DC music.....now!

Imirrelephant > DCCARGEEK 03/03/2014 at 10:56

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That would be the perfect project for his son to pick up later as technology advances and more things are possible. (sorry. I'm a bit of a Marvel nerd...)

Howie > DCCARGEEK 03/03/2014 at 10:59

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Gigafactory somehow conjures a link to the Gigashadow. I wonder if I will be able to get a job there as a security guard fourth class?

DatBomb > DCCARGEEK 03/03/2014 at 11:03

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Is he developing electronic thrusters for space travel?

DCCARGEEK > DatBomb 03/03/2014 at 11:07

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No, but energy does not equal electricity.

Who builds the solid state thrusters for SpaceX's Falcon rockets, the Merlin family of engines, SpaceX, one of Elon's many companies.

RX > DCCARGEEK 03/03/2014 at 11:12

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He continues to be a real life Bond villain.

Triborough > DCCARGEEK 03/03/2014 at 11:20

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I think someone is going for the whole Hugo Drax vibe.

nmalinoski > Skunk 03/03/2014 at 11:23

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Everything else seems to have relatively plausible battery locations.

DoctorNine > DCCARGEEK 03/03/2014 at 11:30

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So when I said the likely reason for him talking to Apple was batteries...

FACEMAN. The man with a face. > DCCARGEEK 03/03/2014 at 11:37

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I so utterly hate myself for not buying stock in Tesla on day two, when it was worth practically nothing.

Tim S. > DCCARGEEK 03/03/2014 at 12:37

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Well... He was in the first Iron Man movie... so I believe these rumors may be true

hi endian > DCCARGEEK 03/03/2014 at 14:24

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"its" does not equal "it's." Please fix this; it's embarrassing.

DCCARGEEK > hi endian 03/03/2014 at 14:46

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What are you talking about?

Troll is English for Troll > DCCARGEEK 03/03/2014 at 15:41

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LOL, seriously? Elon Musk keeping his goal at making military batteries? Please.

He's only making the batteries so that he can implement his own "Elon Musk Virus" which is embedded in the battery, and will somehow hack into the military systems and allow him to take over the world.

Well done, Mr. South African Supervillain Man.

Dr. Understeer > CCC (formerly CyclistCarCoexist) 03/03/2014 at 16:30

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Also to be asked, What are the byproducts of all of this battery production? Toxic or otherwise and can they be eliminated?

rustyshakelford2 > DCCARGEEK 03/03/2014 at 16:55

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I don't understand everyone's obsession with this man. Seems like every time he sneezes it makes the news.

eeee > DatBomb 03/03/2014 at 19:01

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http://www.quora.com/Why-does-Elon-…

eeee > DCCARGEEK 03/03/2014 at 19:02

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"Since its doubtful Tesla will be selling 500K cars a year "

eeee > DCCARGEEK 03/03/2014 at 19:05

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I'd bet a LOT on the fact that Musk won't be taking any part in making death machines for any military.

DCCARGEEK > eeee 03/03/2014 at 19:39

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Ah, that's the EIC's entry, not mine.

DCCARGEEK > eeee 03/03/2014 at 19:40

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What makes you say that?

486332 > DCCARGEEK 03/03/2014 at 19:44

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I wonder how long he can churn out these batterys in such numbers. There is plenty Lithium, but in absolute numbers it's still just a bit over 4 pounds for every person on earth. At some point battery powered mobility will become too expensive due to battery shortage. Certainly no tech to replace engines for everyone on the planet who can afford a car.

486332 > CCC (formerly CyclistCarCoexist) 03/03/2014 at 19:46

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Depends on whom we take it from. There about 2.2kilograms of elemental Li for evrry person on the planet.

gmporschenut also a fan of hondas > Triborough 03/03/2014 at 20:39

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More a mix of Blofeld and Willard White. "Baja?! I don't own anything in Baja?!?"

Ausoleil1 > DCCARGEEK 03/03/2014 at 20:54

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I think a far more apt comparison is Musk being like Howard Hughes, albeit as one without the psychoses that Hughes had.

Alternator Fax > 486332 03/03/2014 at 22:14

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Lithium isn't a major part of the future of batteries; lots of other configurations are currently being developed and one of them will undoubtably replace lithium somewhere in the next 25-40 years.

Frankenbike666 > DCCARGEEK 03/04/2014 at 00:02

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Was there a controversy about Elon Musk being Tony Stark? Didn't we establish that last round when he started launching rockets and proposing outlandish public transit systems?

Also, better Tony Stark than Lex Luthor.

Rick Brasche > DCCARGEEK 03/04/2014 at 17:26

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still yet another concept like the Hyperloop but everyone treating it as if it's already been done and heaping on the praise for presenting some Powerpoint slides.

Save the congratulations until there's actual product without millions a year in "credits" and subsidies and non-Union corporate welfare.

InsertBullets > nmalinoski 03/04/2014 at 21:01

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Especially since that appears to be a 70 year old King Tiger Tank.

Blackpriester > DCCARGEEK 03/05/2014 at 01:40

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He actually said that himself in a couple of interviews that dealt with the whole "Iron Man Suit" thing.

eeee > DCCARGEEK 03/05/2014 at 01:59

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He just seems to be more into creating than destroying. But that's just what I've observed, not that I know the man.

Thunder > DCCARGEEK 03/10/2014 at 11:48

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From the chart above, "Army Energy Storage for the Soldier".

I have a mental picture of a future solider taking a shot to the arm that would be a minor inconvenience now (call it a through-and-through) that ruptures a Lithium-Ion cell and blows up.

That could be dangerous...