Critics, skeptics, and analysts are piling on Elon Musk, tromping all over Tesla’s announcement of plans to buy SolarCity. They may be focusing on the wrong level, however. There is likely a much larger, long-term plan in play, one leading to a holding company that oversees Musk’s interests and has the funding and credibility to launch future ventures, similar to Google’s transition to Alphabet.
The scope of Elon Musk’s plans, like the reach of his enterprises, is on a much larger scale than we might expect. Combining companies has been Musk’s game plan from the start, according to Electrek.
Battery-operated, self-driving cars. Delivery service to satellites with reusable booster rockets. Transporting people to Mars. Magnetized levitating tubes that whisk people around the world. Capturing free energy from the sun to power our homes and vehicles. Home powerplants hung on the wall. Brain implants to give humans cyborg abilities. And in the midst of these ventures and plans, a constant drive to add more cowbells to products and inventions.
Here’s a portion of the Tesla statement defending the proposed SolarCity acquisition:
“Tesla’s mission has always been tied to sustainability. We seek to accelerate the world’s transition to sustainable transportation by offering increasingly affordable electric vehicles … It’s now time to complete the picture. Tesla customers can drive clean cars and they can use our battery packs to help consume energy more efficiently, but they still need access to the most sustainable energy source that’s available: the sun … We would be the world’s only vertically integrated energy company offering end-to-end clean energy products to our customers. This would start with the car that you drive and the energy that you use to charge it, and would extend to how everything else in your home or business is powered.”
If you are going to be a market disrupter you have to be prepared to take on the market, and Musk has the drive and confidence to do just that. During a conference call about the SolarCity acquisition, summarized by Electrek, Musk said, “We are going to be the world’s best manufacturer … and not by a small margin but by a margin that people didn’t even think is possible.”
In 2012 when Elon Musk responded to a question about moving capital between SpaceX and Tesla, according to Electrek, he said, “They are separate corporations, so capital cannot be moved between them. Am starting to consider whether it would make sense to create a parent corporation that would own the stock, which would make that easier. Not sure if that is feasible or sensible, but am thinking about it.”
So we can see that Telsa isn’t driven by quarterly profits or nearside ROI. Signs are Musk is following a much longer term game plan, one encompassing decades. If one of the near-term moves is to create a parent holding company for Tesla Motors, Tesla Energy, SolarCity, and SpaceX, it will be interesting to learn what it will be called. Google chose ‘Alphabet,’ a word that enables all other words. One reasonable suggestion for a Musk-driven holding company is “Superstring.”