Elon Musk Biography Reveals Internal Tesla Battle Regarding $25,000 Car & Robotaxis

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An upcoming biography of Elon Musk by Walter Isaacson isn’t even out yet — its official publication date is Monday, September 11 — but it has caused a storm of controversy already over reports that Musk personally ordered Starlink service shut off to Ukraine last year just as that beleaguered country was about to launch a drone attack on Russian warships in the Black Sea. Musk reportedly believed his network of low-Earth-orbit satellites should not be used to promote warfare.

There could be a more sinister reason. Historically, major corporations have done very well financially by doing business with all sides in a global conflict. IBM, for example, was only too happy for its services to assist the Nazis in carrying out their crimes against humanity as efficiently as possible. Business and conscience are often at odds.

In an interview with Axios, Isaacson revealed some of the details contained in the biography that help to flesh out the person who has become the richest man in human history. He didn’t get there by being shy. In fact, some say he is pigheaded, domineering, acerbic, and impossible to please. And those are his friends!

Isaacson says Musk was so obsessed with robotaxis that he repeatedly vetoed his own plan to build a $25,000 electric car in favor of them — until skeptical Tesla executives persuaded him to hedge his bet. The stubborn Tesla CEO finally relented when aides revealed a plan to build both a robotaxi and an inexpensive small car side by side in a cutting edge factory.

Master Plan One

In 2006, Elon Musk published his first Master Plan.“ Without giving away too much,” Musk said, “when someone buys the Tesla Roadster sports car, they are actually helping pay for development of the low-cost family car.” That concept — a metaphorical handshake between Musk and future Tesla buyers — has been at the crux of the company’s cult-like following, its ability to reduce costs by relying on free communication channels over paid advertising, and the mass belief that the auto industry could move away from fossil fuels, Carolyn Fortuna wrote in May of this year.

But somewhere along the way, the low-priced family car took a back seat in Elon’s mind. He dithered away two precious years trying to perfect the falcon-wing doors for the Model X. When the Model 3 was first introduced, it was supposed to be priced at $35,000, but the vast majority of them have sold for more — often much more.

The low-priced family car fell further and further into Musk’s rear-view mirror as he became fixated on building robotaxis — cars he said could earn Tesla owners $30,000 a year in income from people who would pay to ride in one to the grocery store, the doctor’s office, or on vacation.

Somehow, Musk never seemed to understand that people who use somebody else’s car never take care of it like they would their own car. They leave leftover takeout food under the seats, used condoms in the glove box, and full diapers on the floor. What seems alluring to him sounds like a nightmare to others.

The secret to the robotaxi, of course, is the Full Self Driving (FSD) software Musk has been promising the world since 2016. It is more than an obsession with Musk. It is a compulsion that he cannot control, one that drives him to realize his dream at all costs — a characteristic that has defined Musk his entire life. Over time, Musk believed robotaxis would eliminate the need for people to own cars, he told Isaacson. He has said this many times publicly, too.

Dinner And A Debate

In November 2021, Musk gathered his top five lieutenants for dinner in Austin to start brainstorming a basic, high-volume robotaxi. “There is no amount that we could possibly build that will be enough,” Musk said, according to Isaacson. “Someday we want to be at 20 million a year.”

For nearly a year, they debated whether to play it safe and build the car with a steering wheel and pedals or make it truly autonomous. Because those top engineers believed state and federal regulators might not approve an autonomous car without traditional controls, they pushed for the safer, conventional option. They had a more realistic outlook on how long it would take for Tesla’s Full Self Driving technology to be ready, Isaacson writes.

“If we go down a path of having no steering wheel, and FSD is not ready, we won’t be able to put them on the road,” Tesla’s longtime chief designer, Franz von Holzhausen, told Musk at a fateful meeting on August 18, 2022. He suggested making a car with a steering wheel and pedals that could be easily removed later. Musk, however, was adamant, Isaacson writes: “No mirrors, no pedals, no steering wheel. This is me taking responsibility for this decision.”

When his deputies still resisted, Musk got into one of his very cold moods, Isaacson writes. “Let me be clear,” Musk said slowly. “This vehicle must be designed as a clean robotaxi. We’re going to take that risk. It’s my fault if it fucks up. But we are not going to design some sort of amphibian frog that’s a halfway car. We are all in on autonomy.”

Musk believes absolutely that a Tesla robotaxi would be truly revolutionary. “This is the product that makes Tesla a ten-trillion-dollar company,” he told Isaacson. “People will be talking about this moment in a hundred years.”

Working Around Musk’s Inflated Ego

What happens next is like reading stories about how senior aides to a disgraced former president worked tirelessly to find ways to stymie his most outrageous ideas while letting him maintain the illusion that he was in control. Musk’s deputies remained skeptical about the readiness of FSD, and finally found a way to persuade him to cover his bet “in a non-challenging way,” Isaacson writes.

At a secretive meeting late one evening in September, 2022, von Holzhausen and a few others presented data showing that a small, inexpensive global car was needed to meet Tesla’s ambitious 50% annual growth targets. Then they convinced Musk that Tesla could build both the $25,000 car and the robotaxi on a “next-generation” engineering platform, using the same assembly lines.

Musk had long believed that Tesla’s production system — “the machine that builds the machine” — is  even more important to the company’s long-term success than its vehicles. He saw the opportunity to design a new high-speed, ultra-automated manufacturing process for both cars.

He remained unenthusiastic about the $25,000 car — the key to his original Master Plan — but changed his mind after a design review session in February 2023, when von Holzhausen put models of the robotaxi and the $25,000 car next to each other in the studio. Both had a futuristic design similar to the Tesla Cybertruck. Musk loved the designs. “When one of these comes around a corner,” he said, “people will think they are seeing something from the future.”

Musk has an almost child-like fascination with science fiction and cult movies. The volume control on early cars went to 11, just like the amplifiers in the movie This Is Spinal Tap. Ludicrous and Plaid modes in Tesla performance models are taken straight from Space Balls, Mel Brooks’ spoof of Star Wars. The Cybertruck and robotaxis are ideas that may have been inspired by movies such as Blade Runner and Total Recall.

The Takeaway

Do any of the designs in the sketches shown above reveal any hints about what a $25,000 car from Tesla might look like? Probably not. We don’t know when it will be built or where it will be built. Although there was long the expectation that Mexico was the most likely place to manufacture a low-priced car due to lower labor costs, my colleague Paul Fosse has just reported on rumors it will now be built in Austin, Texas.

All will be revealed to us in due course, as Musk bumbles his way from one grand scheme to another. Anyone who thinks his ideas today will be topics of conversation 100 years from now has more than a touch of megalomania about him. Perhaps only flawed individuals are truly capable of greatness.