Produced and edited by Sean Morrow and Anthony Mascorro

Elon Musk spent decades building something big: himself. Musk managed to sell the world on a persona: the visionary genius billionaire working his hardest to save the world. And it’s worked: the myth of Elon Musk has made him a lot of money. We worked with Second Thought to dive into Musk’s wealth. Below is a full transcript of the video.

[Elon Musk in 2009]: I’m certainly… I’m no saint. But I generally try to do the right thing.

[Stephen Colbert Interviewing in 2015]: Are you sincerely trying to save the world?

[Elon Musk]: I’m trying to do good things.

[Tony Stark to Elon Musk in “Iron Man”]: I’ve got an idea for an electric jet.

[Elon Musk in 2009]: Impossible? My middle name I suppose.

Second Thought: Elon Musk has a pretty big pitch: he’s the “good” billionaire using his wealth to protect the future of humanity. It’s gotten him something most billionaires don’t have: a fanbase.

[Elon Musk in 2021]: I’ve never signed a life-size version of me.

[Fan to Elon in 2018]: First, I want to say I love you.

Second Thought: A 2021 poll showed Musk with a 50% approval rating. Way higher than his fellow billionaires. This popularity has done very well for him.

[News Clip]: Musk is now the seventh richest man in the world.

[News Clip]: Musk is now the fourth richest man in the world.

[Jimmy Kimmel]: Elon Musk is now the world’s richest person again, according to Forbes.

Second Thought: We took a deep look into Musk’s entire career: court documents, SEC filings, and interviews to break down the story Elon tells about himself and how he leveraged it to accumulate wealth and power.

This is The Class Room from More Perfect Union. And today we’re going to look at how Elon Musk got rich. 

Let’s skip Musk’s South Africa childhood. Critics say he inherited his money from his father’s African emerald mine, and Elon says that’s not true. He claims he rejected his abusive father’s ill-begotten wealth and came to North America as a teen with 2000 dollars to put himself through college. He knew he wanted to work with the internet.

[Elon Musk in 2003]: The only way to get involved in the internet in 1995 that I could think of was to start a company because there weren’t a lot of companies to go work for. So I thought, we’ve got to make something that’s going to return money very very quickly. 

Second Thought: Elon joined forces, and funds, with his brother Kimbal. They drummed up some cash from investors, including 20k from their father, and started Zip2, a map and local listing company. Zip2 eventually planned to merge with CitySearch. But Elon wouldn’t have been in charge. That did not sit well with him. At the time, a CitySearch executive said CitySearch wanted to focus on customers and financiers while Musk wanted to focus on general visibility—visibility for him.

[Elon Musk in 1999]: I’d like to be on the cover of Rolling Stone, that’d be cool.

Second Thought: These disagreements led to the deal falling apart. This is a pattern for Elon: a need for sole credit and control. Zip2 sold and Elon made 22 million dollars, which he invested in his next project.

[Elon Musk in 1999]: I’ve sunk the great majority of my net worth into x.com, which is the new banking and mutual funds company. So this is an ATM, what we’re going to do is transform the traditional banking industry.

Second Thought: That quote defines Musk’s strategy: promise revolutionary technology, and highlight how he’s risking his own money. He also points out a key element of his success: wooing investors.

[Elon Musk in 1999]: Raising $50 million is a matter of making a series of phone calls.

Second Thought: As x.com took shape, investors and the board didn’t think Musk had the experience to be CEO, so they brought in Bill Harris. Elon’s co-founders were also unhappy. One accused Elon of promising the sun, moon, and the stars to the media when there was nothing there. Future SEC filings for the company even mention a lack of proprietary technology as a corporate risk. 

The tech they did have was problematic. For example, there was a bug allowing bad actors to transfer funds from any other account in the nation’s banking system with just an account number, a major security flaw. A co-founder was so displeased with Musk he left and took many employees with him. Musk’s reaction? “We’ll hire more people.” Eventually, Musk pushed out CEO Bill Harris and replaced him with himself, to “centralize authority.” 

X.com merged with a competitor, Peter Thiel’s ‘Confinity.’ Confinity owned a piece of technology called PayPal. Musk and Thiel got glowing press coverage, but because PayPal came out of Confinity, a lot of the coverage centered Thiel. According to Ashlee Vance’s 2015 biography, Musk kept championing the X.com brand, while most everyone else favored PayPal.

Eventually, the company scrapped x.com to focus on PayPal, a decision the press gave Musk credit for. 

But mutiny was brewing. The executive Roelof Botha alleged Musk was hiding serious financial issues from the board. Employees put together a coup. They petitioned the board to fire Musk, and it worked. Musk was fired and replaced with Thiel. Botha said it was just in time. “It would have killed the company if Elon had stayed on as CEO for six more months.” Regardless, Musk hits it big when PayPal eventually sells: $180 million dollars. He had been laying the path for his next move since college.

[Elon Musk in 2009]: When I was in college, there were three areas that I thought would most affect the future of humanity: the internet, the transition to a sustainable energy and transportation sector, and space exploration, in particular, the extension of life to multiple planets. With the capital I got from the sale of PayPal I was able to go into both those areas.

Second Thought: Enter SpaceX and Tesla. Musk wasn’t with Tesla at the start. He invested in a company that already existed, but most media calls him a founder. What happened? We spoke with Edward Niedermeyer, author of Ludicrous, an in-depth examination of Tesla Motors. 

Edward Niedermeyer: Elon Musk was not one of the original founders of Tesla. There were these two guys Martin Eberhard and Mark Tarpenning, who had actually incorporated the company. Musk came in because he wanted to do the same thing.

But, like with his previous companies, Elon was focused on publicity, specifically public perception of himself as the visionary founder. 

Edward: Part and parcel of being a hot startup, right, is you have to have that sort of charismatic visionary founder. But it wasn’t Elon Musk. It was Martin Eberhard. Eberhard even had a Blackberry ad where he’s being presented just like Steve Jobs as this visionary tech guy. And I think that was exactly the kind of thing that Elon Musk really wanted out of Tesla as much as anything else. 

He sent an email saying, like, this is embarrassing. You know, I’m an important part of this company. And I want to make sure that I’m included in the coverage. And in these emails that leaked it, it makes it very clear that being that guy, being the visionary figurehead of this company was really, really important to him.

So shortly after this whole exchange and Musk getting really angry about his lack of prominence in the media coverage, he went and wrote the top secret Master Plan blog post. And this was really Musk’s sort of coming out party positioning himself as really that visionary founder for Tesla. One of the interesting things is there’s really not a lot in that top secret master plan, strategically anyway, that Tesla wasn’t kind of already planning on doing. 

Second Thought: It all culminated in Eberhard’s ouster and a series of lawsuits, leading to a settlement with an important stipulation: Musk could legally call himself a ‘co-founder’ of the company. Musk knew that to acquire more power he needed to be called a co-founder on paper. Musk has long insisted he never wanted to be CEO of Tesla, but after Eberhard’s ouster:

Edward: They brought in two different new CEOs before Musk himself eventually took over. 

Second Thought: But Musk took over at a rough time: the 2008 financial crisis. Tesla needed an influx of capital. Musk’s usual strategies wouldn’t work.

[Elon Musk in 2009]: The sources of capital that would normally provide that such as the public markets, the debt markets, they’re in shambles

Second Thought: But a year earlier, Congress passed a 25 billion dollar loan program for the Department of Energy, part of which would go to developing low-emission cars. Musk went on a media blitz trying to convince the public that Tesla deserved the loan.

[Elon Musk in 2009]: I think it’s helpful to let your congressman, and senator know that you think companies like Tesla should get a portion of the ATVM program.

Second Thought: But public approval wouldn’t be enough. At the time, Tesla only had 1500 cars on the road and hadn’t truly proven that they could produce cars en masse or significantly reduce emissions. Tesla was stuck in a Catch 22. They needed to show they had the support of other corporate investors, specifically traditional automakers like Daimler, the makers of Mercedes and other cars, but Daimler wouldn’t be interested in investing if they didn’t get the loan.

Edward: He announced that the loan was approved before Tesla had even submitted a complete application for the loan, let alone received any kind of actual approval for it. By saying that this was a done deal, gave Daimler the confidence to partner with them. And having that partnership with a century old, one of the biggest names in the car business, in turn, gave the government the confidence in Tesla’s viability, to then ultimately give them the loan. And so it’s this, you know, circular trick that Elon plays. 

Second Thought: It was more than the money, it was a boost for public and investor relations. Just a few months later, Tesla registered for an IPO. Their SEC filing even admits the loan was essential to the business. In 2013, Tesla paid off the loan in full, to huge fanfare from the media. CNN literally just copied their press release. But Tesla still isn’t profitable. Their stated goal is to accelerate the world’s transition to sustainable energy. But Tesla’s actual strategy is exploiting well-meaning government climate programs. Look at carbon credits.

Government permits to emit a certain quantity of greenhouse gasses. Companies earn carbon credits for reducing emissions and have to spend them when they emit too much. Tesla earns a lot, then sells them to other companies, erasing whatever progress Tesla made. The boost from selling carbon credits led to some of the only profitable quarters Tesla ever had. They even used to list regulatory credits and automobile sales in the same line in some SEC filings. 

It allowed Tesla to announce better financials, and pull in more investors–retail and institutional. Musk gets paid almost entirely in stock. And he’s really good at manipulating the stock’s value. He uses the same strategy he used with Daimler and the Department of Energy: announcing funding that might not exist. Like when he tweeted “Am considering taking Tesla private at $420. Funding secured.” You can’t just do that. A federal judge determined Elon’s tweet had falsely inflated Tesla stock and caused “billions” in damages.

The COVID pandemic also helped Musk: when the Federal Reserve executed recession stalling fixes on Wall Street, bankers invested in Tesla. Despite Musk’s derision of COVID stimulus checks, Tesla received stimulus money from the government. At the beginning of the pandemic Tesla stock hovered around 120 dollars a share. In late 2021, a year and a half into COVID, it was worth 10 times that. All of which greatly increased the net worth of the top shareholder: Elon. But to maintain the world-saving myth he has to look like he doesn’t make any money.

[Elon Musk in 2021]: My cash balances are very very low. I simply had loans against my stocks, so if Tesla and SpaceX went bankrupt, I would go bankrupt, too. 

Second Thought: Most US companies don’t allow their executives to take out loans against their stock, but Tesla does. And Musk has taken advantage, borrowing millions of dollars for his personal coffers, using his Tesla stock as collateral. Loans don’t count as income in the eyes of the IRS or the public. But even without the loans, in 2021 Musk made 18,043x the average Tesla employee. Tesla justifies that wild ratio to investors in SEC filings by arguing Elon’s worth it:

“Elon Musk has contributed significantly and actively to us since our earliest days… raising capital… bringing investors… and raising public awareness.”

Yeah, Tesla’s own SEC filings admit that the myth of Elon is inherently tied to the value of the company. If people stop believing in Elon, Tesla loses value, and Elon knows that. He even admits, much of Tesla’s value is based on a promise.

[Elon Musk in 2022]: The overwhelming focus is solving self-driving. That’s the difference between Tesla being worth a lot of money and being worth basically nothing. 

Second Thought: But full self-driving has yet to be safely implemented, and the latest data suggests it’s incredibly unsafe. Tesla’s system is nowhere near ready. 

Regardless, Musk is still wildly wealthy from the promises he’s made, and that’s also made him very powerful. Elon says his goal is:

[Elon Musk]: We want to maximize the happiness of the population and propagate in the future as far as possible. 

Second Thought: But he’s really using that wealth and power as all billionaires do: not to save humanity, but to crush it. He squashes worker power.

[Fired Tesla worker]: They fired me because I tried to improve the lives of my coworkers and myself. That’s why they fired me. Because it wasn’t part of Elon’s plan.

Second Thought: And now that he has both power and a soapbox, his dangerous anti-government political beliefs are even more important. Previously, Elon was a liberal darling. Obama’s 2015 State of the Union seemed to be written for Musk.

[Obama in 2015 State of the Union]: Solar power…Tesla…re-energized space program…astronauts to Mars.
Second Thought: But as soon as Dems questioned Musk, he changed. Lashing out and announcing support for far-right figures and ideas. He likes the politicians willing to support his myth and let him continue building wealth at the expense of the rest of us. He isn’t the only billionaire doing so, but his skill at myth building and his massive popularity make him the most dangerous. Musk tells a story of a self-made billionaire using his money to save the world and enrich humanity, but he really built his wealth on the backs of others to enrich himself.