Hamish McKenzie - The Tesla Revolution

From Saturday Morning, 8:09 am on 1 December 2018

Elon Musk is unusual, difficult and vindictive - but he and his company Tesla have achieved amazing things, former insider and New Zealander Hamish McKenzie says in his new book. 

3238214 11/16/2017 Engineer, entrepreneur, inventor and investor Elon Musk during the presentation of Tesla Motors' new products.

Photo: AFP / Supplied / Tesla

McKenzie, a former writer for Tesla, calls the company "the most revolutionary car company since Ford". 

His book, Insane Mode: How Elon Musk's Tesla Sparked an Electric Revolution to End the Age of Oil delves into the market, as well as Musk himself and his fractious relationship with critics and the markets.

Is Elon Musk ... insane?

While 'Insane Mode' may sound like it's a slur against the contentious chief executive, McKenzie says it's actually a reference to a feature the All-Wheel-Drive version of a Tesla car.

Elon Musk speaks near a Falcon 9 rocket during his announcement that Japanese billionaire Yusaku Maezawa will be the first private passenger who will fly around the Moon aboard the SpaceX BFR launch vehicle

Elon Musk.  Photo: AFP / David McNew

"You could choose if you wanted to go into sport mode, regular mode or - if you wanted to accelerate super quickly from zero to 100km/h in about three seconds - you could choose to go into ‘insane mode’." 

The implications the title suggest about Musk are not lost on him, however, and there seems to be some truth in it. 

"It’s a question he’s asked himself quite a few times I think. I’m not saying that [he's insane] directly but the implication - some people might want to read it that way but it could be insane in a good way.

Hamish McKenzie

Hamish McKenzie Photo: supplied

"He's an abnormal guy with some normal personality traits and some crazy personality traits."

McKenzie says Musk is difficult, and has a tendency to drive people away. 

"I think he’s a difficult guy with his own view of the world, and if someone doesn’t conform to his particular view then it’s not like they can be someone who he just gently disagrees with - you’re either in Elon’s circle or you’re out of it completely.

"If anyone attacks him or he feels that he’s being attacked by anyone he’ll go out of his way to destroy their character and reputation - and that's happened multiple times over the years. 

"We’ve seen it this year even, in this fight that he had with this cave diver from Thailand who’s a British guy who, on Twitter, Elon called him a ‘pedo’.

"He and his companies come with serious problems and they’ve got massive challenges to overcome. That doesn’t diminish the achievements that they have made already in my mind and I think some of those achievements are a little bit underestimated."

A genius? ... a 'god'?

Indeed, Musk's vision for the future and what McKenzie calls his "temerity to attempt to make it happen", have inspired an almost cult-like following. 

“I would be one of those people to describe it like that. I drank a little bit of the Kool-Aid and then I spat some of it out," McKenzie says. 

"I don’t see him as a god, I see him as a flawed human who has achieved amazing things." 

His achievements are impressive; Musk has claimed to work 100-hour weeks, and is or has been chief executive of a slew of successful - or at least ambitious - companies. 

Musk got his start building an online business directory service called Zip2 during the rise of the dotcom bubble. He was pushed out as chief executive but cashed out while the bubble was at its peak.

3290409 02/08/2018 SpaceX CEO Elon Musk's own car, red Tesla Roadster cabrio, entered into orbit by the Falcon Heavy launcher, with a dummy wearing a spacesuit at the steering wheel, in outer space.

Elon Musk famously launched his own car, a Tesla Roadster cabrio, into orbit using the SpaceX Falcon Heavy launcher.  Photo: AFP / SpaceX Flickr

Then, he started a company which would later join with another to become PayPal. Musk was again pushed out as CEO but still made $180 million when it sold to eBay. 

Now he also heads Space X, The Boring Company, OpenAI and Neuralink. 

"I think one of the best features of his character has been his ability to keep on pushing through despite going through hell. One of his favourite quotes is ‘if you’re going through hell, keep going'.”


Of all Musk's companies, Tesla may be the most famous. Its namesake Nikola Tesla was a great innovator but asocial and died penniless while others capitalised on his inventions. 

McKenzie says the need to evade that fate has been a powerful motivation for many of the engineers of Silicon Valley, and despite any traits Tesla and Musk might share it was not Elon who chose the name. 

“Lots of people mistake him as the founding CEO of that company, but the original CEO was a guy named Martin Eberhard."

The company itself has made impressive strides and has just hit the goal of making 7000 Model-3 Tesla cars a week

"They kind of maybe don’t get enough credit for that - because Elon made some ridiculous predictions for how many cars they’d be producing by now, and they’re behind that - but to be making 7000 cars a week at this point in their life is quite an achievement. 

"It’s very hard to go up against the motor industry and the oil industry with a  new car company in the United States and to get through an economic recession at the same time - and to convert people to this idea that electric cars can be better than petrol cars."

Financially though, it has been a struggle for the company. They're planning to be cashflow positive every quarter going forward and just published a profitable quarter - but it's just the second profitable quarter the company's reported since it publicly listed in 2010, he says. 

Musk also had to resign as chairman - remaining as chief executive - after tweeting that he might take it private again.

A Tesla dealership in Red Hook, Brooklyn, August 7, 2018 in New York City. Elon Musk told Tesla employees he is considering taking the electric car company private. Shares of Tesla rose over 10 percent after the announcement.

Tesla is profitable for just the second time since it was publicly listed in 2010. Photo: AFP / 2018 Getty Images

“It’s a rollercoaster ride if you’re following Tesla on the financial front. They’re constantly staring death in the face but they've been able to get themselves out of it each time.

"They’ve got enough supporters and enough financial friends behind them that I don’t think they would really get to a point of death - someone would step in to save them.

McKenzie says Tesla's aim, though, was in part to start the transition to electric transport. 

"They’ve started that, so I think they can see that as a success."

If the transition is successful - which McKenzie seems to see as inevitable - that seems likely to be good for Tesla too. 

"I think what’s good for electric cars is good for an electric car company like Tesla, you want to grow the pie." 

Electric transport revolution?

McKenzie is convinced the shift to electric is coming. 

"Ten years might be a little bit optimistic but I would not be surprised if half of the cars on the road in 10 years time were electric. 

"If you look back to the era of the motor vehicle surpassing horse and buggies - from 1910 to 1921, that’s the time it took for horse and buggies to disappear from the streets in America - the space of 11 years. 

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    The pie is certainly growing - there is a growing number of electric vehicle-focused companies. Most New Zealanders would be familiar with Nissan's 'Leaf' and Mitsubishi's i-MiEV, and McKenzie says they deserve a lot of credit.

    They're not quite in the same market, however. 

    "You don’t get this rollercoaster thrill like you do in a Model S when it accelerates from zero to 100 in about three seconds, so while they’re good - sort of practical, efficient cars - I don’t think they’ve captured the public imagination as much," McKenzie says.  

    Meanwhile, China is investing massively in what it's calling 'new energy' vehicles, with a series of new electric vehicle companies like BYD starting up. 

    "What’s happening in China is really encouraging and the government there is extremely supportive of transitioning. 

    Bus drivers and stewardesses with new BYD electric double-decker buses in Shenzhen city. The 16,000 buses in the southern city was 100 percent electric by the end of 2017. BYD became the world's biggest manufacturer of electric vehicles in 2016, exporting to 50 countries.

     Bus drivers and stewardesses with new BYD electric double-decker buses in Shenzhen city. The 16,000 working buses in the southern city were entirely electric by the end of 2017. BYD became the world's biggest manufacturer of electric vehicles in 2016, exporting to 50 countries. Photo: AFP / Stringer - Imaginechina

    "China is an important market, it’s the world’s largest auto market. Car sales in the last few months in China have been declining actually but electric car sales have been going up 50 percent month on month.

    "Last month they increased 53 percent, this year in the first 9 months they were up 80 percent. 

    "Most of them are focused on China first, with the ambition of going global later. United States would be the first market they push into. 

    "I think BYD’s biggest contribution on electric transport in the near terms is going to be on buses - they’re supplying all the buses for Shenzen's electric bus fleet. That bus fleet is larger than the bus fleets of Los Angeles, New York and Chicago combined." 

    Electric economy

    All that production will inevitably lead to greater supply and - along with the improvement of battery technology and recycling - is bound to drop the price of electric cars dramatically. 

    "Battery prices are dropping rapidly, they’ve dropped 80 percent in the last six years.

    "In Tesla’s case they’ve got partnerships for recycling them and they’re going to do a lot of recycling at the Gigafactory which is this massive factory they’re building in the desert in Nevada.

    "They want to build another dozen of these around the world. It’s so big that they’ve only constructed a third of it so far and it takes about two hours just to walk around that one third." 

    "At the end of their life every part of the battery can be reused. 

    "That is kind of like the secret missing ingredient to what could power a new energy economy: the wind doesn’t blow all the time and the sun doesn’t shine at night, so those sources are kind of inconstant - but you can make them constant if you have enough batteries storing energy ready to deploy whenever you want and put them everywhere around the world.

    Tesla power packs in South Australia.

    Elon Musk agreed to build Tesla's battery farm in South Australia to keep the state's power grid stable, after it had been experiencing frequent outages.  Photo: Tesla

    McKenzie says the expected price drop mirrors what happened at the start of the automobile era.

    "With the Model T [Ford]  … when it first came out it was priced at what would be the equivalent of $US135,000 today. 

    It was a quirk of history that brought about the Model T rather than an electric version, he says. 

    "Henry Ford and [Thomas] Edison planned an electric car in the early 1900 ... pipped by an unfortunate consequence of the time, which was that Charles Kettering perfected the electric starter motor.

    "Vehicles could be started without having to hand-crank them so they became just that little bit moire convenient  … Edison couldn’t quite master the battery in time and then the Kettering solution came along and gasoline cars turned out to be the most convenient at the time - so that’s the way the world went." 


    The rest is history - but the petrol motor stuck, in part because of resistance from the motor vehicle and fossil fuel industries. 

    "I think the auto industry have never been seriously interested in investing in electric cars, not until they were forced to by Tesla. 

    McKenzie says there's two sides to the argument: on one hand they’re resistant to innovation on the other that they’ve got the know-how, the tradition and the love and can do it better than anyone else. 

    "Which is the same thing that Nokia said before the iPhone came along." 

    The suppression of electric vehicles has also been sustained through lobbying and campaigns, he says. 

    "Fossil fuel groups have been lobbying and campaigning and spreading disinformation about electric cars for a long time now - and continue to. 

    "Most recently the Koch brothers - who are two of the richest people who have ever existed ... last year they funded this campaign called ‘Fuelling US Forward’ which was supposed to espouse the benefits of glorious fossil fuels, but actually instead focused on taking down Elon Musk and taking down electric cars."

    He says one of the things the company was trying to suggest was that electric cars are worse for the environment than petrol, which "is just not true". 

    "Even in the dirtiest coal grid situations electric cars are better for the environment when you account for the total production costs than even the most efficient gasoline vehicles ... that's out of a study from the Union of Concerned Scientists

    "The other point … the electric grids in the US and China are cleaning up - so in the US, coal accounts for 30 percent of the electric grid and 10 years ago it was 50 percent. Renewables are on the rise. 

    "Those electric cars clean up as the electric grid cleans up, and that’s an advantage that can never be said … for petrol cars."

    With change looming, traditional car makers are also trying to shift production to electric vehicles.

    “It’s going to be difficult for them to make the transition," McKenzie says. 

    "I think of all the companies, Volkswagen has the best opportunity. They’ve had this emissions scandal that forced them to rethink their entire business and as a result I think it’s worked out in their favour. 

    Volkswagen's new Bus, an Electric Vehicle, on display in Los Angeles, California on November 28, 2018 at Automobility LA.

     Volkswagen's new Bus, an electric vehicle, on display in Los Angeles, California on November 28, 2018 at Automobility LA. Photo: AFP / Frederic J. BROWN

    "They’ve decided to reinvent themselves as an electric car company with software and autonomous driving at the heart of what they do so they’re spending $50bn over the next five years in making this transition and refitting a bunch of factories that they own already. 

    "That’s the sort of aggressive shift that you need as an automaker to be able to survive in the new world. I think the other ones are going to feel a lot of pain as they try to get by on their existing technology for as long as they can." 

    End of an era?

    Volkswagen's decision to target autonomous transport is matched by several other electric companies. 

    McKenzie says although he's a fan of electric, he's not as excited about autonomy as some others. 

    "I think it’s got a long way to go and people are trying to make self-driving cars work on this infrastructure that was designed for a diff purpose which is cars that were operated by humans. 

    "It’s going to take some time to figure out those wrinkles." 

    He says there's two schools of thought on how autonomous vehicles could affect transport. 

    "A lot of people think that autonomous cars are going to take a lot of cars off the road because they can more efficiently move people from point to point and you can share vehicles. 

    "Other people think there’s going to be this hellscape of self-driving cars that are privately owned, driving themselsves around like zombies." 

    He says there will also be something nostalgic about some motor vehicles. 

    "Old Mustangs and internal combustion cars that have been lovingly restored are objects of desire and, much like phonographs and vinyl records are, for some people that will never go away." 

    However, just as the world appears to be moving on and some of the sheen of fossil-fuelled transport is lost to history, McKenzie says he's lost some of the "enormous" respect he had for Musk and Tesla when he first joined the company. 

    “It’s a little bit dimmed," he says.

    "The things that are difficult about Elon have been very public and people have reported about the corporate culture at Tesla not being positive all the time, I think that’s one of their challenges ... they’re facing complaints about safety in the factory, that’s another one of their challenges. 

    "I don’t think I would go and work for him again if I was given that opportunity." 

    Hamish McKenzie has worked as a reporter for the tech blog PandoDaily, and as a freelance journalist covering digital technology and start-ups. His work has appeared in a range of international publications, including Reuters, The Guardian, the South China Morning Post, and CNN.com, among others. Originally from Alexandra, he now lives in San Francisco.