Musk: Something More

Elon Musk has been attacked from all sides during his time at the Dept. of Government Efficiency (DOGE) in Washington. Interest groups are fighting to keep every dollar of over-$6 Trillion in annual government spending, while shareholders in his companies want him to return to tending his businesses.

Elon Musk's last day as a temporary government employee was today, but he may have a few ideas about how he wants to spend his time that don't include Tesla or SpaceX.

The Tesla Diner under construction (Jessie Alcheh/SFGATE)

Elon Musk continually surprises with his list of priorities, but I doubt that many had Tesla Diner on that list.

But there’s something … different about the diner under construction at Santa Monica Boulevard and Orange Drive in Hollywood. For one, it’s got a striking two-story silver Space Age design and electric car charging stations aplenty. Large outdoor screens are set to show movie clips. And then there’s the mercurial owner, controversial Tesla and SpaceX CEO and Department of Government Efficiency architect Elon Musk...

The Tesla diner project has been in the works since 2018, when Musk announced on what was then Twitter that he was “Gonna put an old school drive-in, roller skates & rock restaurant at one of the new Tesla Supercharger locations in LA.” Progress has been slow since that first public idea, but lately, tidbits about the space have been trickling out on social media. The announcement of [Eric] Greenspan as chef was first floated on X and picked up later by the New York Times. In March, Sawyer Merritt shared on X that the “diner will feature a ‘1950s retro charm, dazzling neon lights, the unmistakable scent of freshly grilled burgers & hand-spun milkshakes.’” Merritt also noted the launch of a Tesla Diners Instagram account, which remains post-free...

The restaurant’s alien-spaceship design, courtesy of Stantec, is growing more visible by the day, despite the fencing and security around the busy corner lot. In late 2023, the restaurant was still very much a steel shell, but recent photos reveal that the building has not only been topped out but is already filling up with furniture and other finishing touches. Large movie screens affixed above the chargers are roughly in place, and word is that the screens will show films for 30 minutes, or the time it takes to charge a car.

It may have the tastiest burgers and unique decor, but I doubt that was enough to excite Elon Musk. There is undoubtedly something more to Tesla Diner.

Elon Musk: the Wisdom in His Vision

(Citrin-Safadi/WSJ image)

Elon Musk has so many irons in the fire--Tesla, SpaceX, Starlink (part of SpaceX), and DOGE--that it's fair to wonder of he's one of those serial inventors (maybe the most brilliant and successful in history) who gets an idea and tries to make a business out of it.

What makes more sense is that everything that Elon Musk has done is directed toward establishing a human colony on Mars during his lifetime.

Musk founded SpaceX in 2002 with the mission of taking humanity to other planets. The company infused its culture with that long-term goal and completed a successful launch of its first rocket in 2008. It eventually developed the Falcon 9 rocket, which could be partially reused, lowering the cost of launches and taking market share from incumbent rocket operators.

Musk’s other businesses have contributed to the Mars goal. Musk has described Starlink, a SpaceX division that uses thousands of satellites to provide high-speed internet connections, as a cash machine for a future Mars mission. After Tesla, his electric-car company, gave Musk a stock award in 2018 valued at up to $55.8 billion, he later said it would be used for his space project. “It’s a way to get humanity to Mars,” he said in court in 2022.

Elon Musk has already stated that the goal of colonizing Mars is to preserve the human race when the earth inevitably experiences an extinction-level event. In that light Tesla and Starlink are "cash machines" to fund SpaceX, and DOGE will reduce concerns about the national debt and help the American government fund NASA.

For those who support DOGE and the space program, however, there is a legitimate disagreement with Elon Musk whether Mars should be a higher priority than colonizing the moon:

The White House plans to propose killing a powerful Boeing-built rocket designed for NASA to launch astronauts to the moon and beyond in a coming budget plan, according to people briefed on the plans. Canceling the vehicle, called the Space Launch System or SLS, would potentially free up billions for Mars efforts and set up a clash with members of Congress who support it...

NASA’s program known as Artemis, its long-range plan to explore the moon and eventually Mars, is being rethought to make Mars a priority. One idea: Musk and government officials have discussed a scenario in which SpaceX would give up its moon-focused Artemis contracts worth more than $4 billion to free up funds for Mars-related projects, a person briefed on the discussions said.

NASA’s long-range plan to explore the moon and eventually Mars is under the microscope. NASA has been working on the Artemis program and its predecessors for years. The cost from the government’s fiscal years 2012 through 2025 is estimated at $93 billion, according to the agency’s inspector general.

In January, Musk called the moon program a distraction in a post on X. Days earlier he had criticized Artemis, saying “Something entirely new is needed.”

SpaceX, Boeing and others have billions in contracts to build rockets, ships and lunar landing vehicles, among other technologies, for the program.

Musk has discussed with officials the idea that SpaceX’s moon-focused contracts, valued at more than $4 billion, could be dropped in favor of Mars plans.

Your humble blogger bows to the genius of Elon Musk but believes that the priority should be the moon, not Mars. It does the U.S. no good to be focused on Martian settlements if, say, the Chinese became the dominant lunar power. The latter could well jeopardize the former, just as Iwo Jima and Guadalcanal had to be taken before going after the real, distant objective of the Japanese homeland.

Elon Musk probably believes that Mars needs to be done while he's alive because the project could be abandoned without him, just as NASA lost its mojo after the Apollo program. He needs to have faith that the American people will see the wisdom in his long-term vision after we win the new moon race.

NASA’s role regarding the moon must be reimagined. As we are starting to see in LEO [Low Earth Orbit], Congress must shift funding and priorities so that the centerpiece of U.S. lunar policy becomes enabling private efforts. These pioneering initiatives cannot remain sideshows to the Artemis-Apollo rerun. It’s time to move American enterprise to center stage and let people lead...

Meanwhile, NASA can turn its central focus to putting the first people on Mars. Even if the first mission is a relative sprint, we’ll be learning skills on the moon we’ll need to go further.

Beautiful on Many Levels

(Photo from NASA/YouTube video)

Tuesday's splashdown was beautiful on several levels.

The esthetic beauty of the capsule being framed against a bright blue sky and deep blue ocean, surrounded by four symmetrically arranged orange-and-white parachutes;

The epistemic beauty of American technology that gave stranded astronauts Barry Wilmore and Sunita Williams a ride home; and

The empathic beauty of the safe return of two people from a parlous situation.

It'a a relief to celebrate a happy event while keeping politics mostly (but not completely, sadly) out of it.

Buying Into the Vision

SpaceX valuation: it's a puzzlement (Nabaum/WSJ)

Ever since SpaceX demonstrated proof of its concept of reusable rockets, your humble blogger hss yearned for a piece of the action. However, SpaceX is a private company, and investment has been limited to a few private investors...until now. Through the magic of financial engineering and developments in capital markets it is possible to have a (small) ownership interest in Elon Musk's spacefaring company.

On Dec. 3, a little fund called the ERShares Private-Public Crossover ETF (ticker: XOVR) announced it had made privately held SpaceX its top holding. Like many outside investors, the ETF bought SpaceX through a special-purpose vehicle. An SPV is a private fund created to hold a specific asset. The fund paid $7.5 million, the equivalent of $135 per SpaceX share, says Joel Shulman, ERShares’ founder and chief investment officer.

On Dec. 12, XOVR publicized an additional $10 million purchase, raising its stake in the SpaceX SPV to 12% of the fund’s total assets. It paid an “implied” $185 per share on Dec. 11, says Shulman.

“Very fortuitously,” he says, SpaceX offered shares to private investors at $185 apiece at almost the same time, valuing the entire company at around $350 billion. XOVR then marked up its SpaceX position to $185, an instantaneous gain of 37%.

Even if the $350 billion valuation of SpaceX can be justified, the limited availability of shares through this arrangement ensures that much of the gains will go the structurers, not the ETF investors.

I'll wait for the public offering,

Right Before Our Eyes

This happened on Sunday and was widely reported on all media channels. Your humble blogger had nothing to add, so initially refrained from comment.

Upon reconsideration, I thought that, of all the important events that have happened or likely will happen this October in a Presidential Election year, this is the one that will be remembered centuries from now.

WSJ: SpaceX Catches Huge Booster Back at Launchpad [bold added]

SpaceX caught a towering booster rocket back at its launchpad in south Texas, an engineering milestone for the Starship vehicle at the center of Elon Musk’s plans for deep-space exploration.

The Super Heavy booster, the first stage of Starship, lifted off from south Texas on Sunday morning and propelled the Starship craft into space. Shortly after the launch, SpaceX made the call to return the booster back to the pad from which it had launched.

A livestream from SpaceX showed the device zipping back toward the facility, and, as it approached a tower, its engines slowed the enormous device down, allowing for the catch around 8:30 a.m. ET. The vehicle latched down on mechanical arms sticking out of the tower.

It was SpaceX’s first attempt at the catch, a feat that the company and Musk, its chief executive, have said is key to reducing the cost of rocket launches...

Starship, which consists of the Super Heavy booster and Starship spacecraft, stands about 400 feet tall when it is launched.

Elon Musk is that rarest of technological pioneers who prioritizes the economic viability of his product. After the Apollo missions NASA lost its funding because its programs were always viewed as nice-to-have, not got-to-have. Reusability of boosters will drive down the cost sufficiently to make space travel more accessible and perhaps even profitable in its own right.

Twitter Be Gone

After moving Tesla and SpaceX to Texas, Elon Musk has completed his divorce from California by moving X (Twitter) headquarters to Austin:

The light goes out on Market Street

Twitter, now known as X, is expected to close its San Francisco headquarters this month, leaving behind the Mid-Market neighborhood it has called home since 2012. The company is reportedly moving its headquarters to Austin, Texas, but plans to relocate its San Francisco employees to San José and Palo Alto, where it has already listed job openings.

The departure is another blow to a city that has been buffeted by high-profile business departures and that once held up Twitter as a key part of its revival. Downtown San Francisco’s vacancy rates have ballooned as tech companies slashed their real estate expenses and halted office expansion plans as the pandemic has relented.

Confronted with a falloff in foot traffic, major retailers such as Nordstrom and Anthropologie also shut their stores amid heightened concerns about crime, theft, vandalism, drug use and homelessness.

X is the second-largest tenant in the Mid-Market neighborhood, leasing 457,793 square feet, according to CoStar, which tracks real estate trends. Vacancy rates in Mid-Market are at their highest in decades at 62%, according to CBRE.

California is so invested in its Progressive politics that it rather let megabillion employers like Tesla depart than change its ways.

(In an infamous exchange, California Progressive Congresswoman Lorena Gonzalez tweeted “F—k Elon Musk” in 2020 when Musk threatened to move Tesla because of California's COVID lockdown rules.) He responded "exactly" and Tesla departed for Texas.

IMHO, the biggest loss to California is privately held SpaceX, which is the leading American space exploration company. Its current valuation is estimated to be $210 billion, and $1 trillion is well within reach after it goes public.

On the other hand Twitter's valuation has fallen from $44 billion to an estimated $19 billion. (He can't admit this to the bankers and investors, but IMHO Elon Musk's primary objective wasn't to make money from the purchase but to make Twitter a free-speech platform.)

Although the Musk family of companies retains substantial operations in California, the loss of their headquarters is a blow to the tax base. Not only do headquarters support a host of ancillary businesses (hotels, printers, law firms, banks, etc. etc.) repatriated international income and intangible income such as royalties and licenses are attributable to the state of the company's residence.

Progressives rather lose the tax base upon which their carbon-free equality-of-result dreams depend than admit they are wrong. Unfortunately, when the majority of the people of California realize that, it will be too late.

The Working of the Musk Mind: a Materials Science Example

Carbon fiber is stronger and lighter than steel, as even laypeople know from numerous advertisements.

Princeton Professor Adam Burrows asks Elon Musk why SpaceX rocket engines are built with stainless steel instead of carbon fiber. As Elon Musk walks him through the decision, it becomes clear why he chose steel, especially when one considers that safe re-entry and re-usability are primary goals. Below is a nine-minute video from Twitter/X:

If you want a detailed explanation of why I switched Starship from carbon fiber to stainless steel
pic.twitter.com/pXC0ngheiw

— Elon Musk (@elonmusk) June 7, 2024

Perhaps as important as his technical knowledge, experimentation and even acceptance of failure (within reason) are key components of Elon Musk's success.

Elon Musk thought at the outset that SpaceX would probably use carbon fiber. As it tested carbon fiber, stainless steel, and aluminum, it found that steel's strength increased at the extremely cold temperatures (-297.3°F / -182.96°C) necessary to contain the liquid oxygen in the fuel mix. Lining a carbon-fiber engine to secure it against cold is complicated compared to steel, and even if that problem is solved, carbon-fiber would only be as strong as stainless steel.

Steel also held up better than fiber and aluminum at high re-entry temperatures and required a thinner (lower weight) heat shield. The fact that stainless steel is much easier to work with and is much cheaper than other materials are added bonuses.

In most large organizations everyone is afraid of making a mistake that could cost them their jobs. His willingness to fail--and thereby learn--and his power to call the shots are why Elon Musk's companies are far ahead of their competition.