Say what you want about his companies, but Elon Musk is definitely out to accomplish big things. Playing a key role in SolarCity (NASDAQ:SCTY.DL), Tesla Motors (NASDAQ:TSLA), and SpaceX, Musk is trying to revolutionize solar power, daily transportation, and even space.
Back in August, Bloomberg created a slideshow of 12 Things Elon Musk Wants to Build, ranging from the near-term financially essential to the long-term inspirational. Here I'll break down these Musk ideas and what they could mean for investors and non-investors. For simplicity's sake, some of the ideas mentioned in Bloomberg are grouped together.
Teslas for Texas
Because of dealer franchise regulations, Tesla is not legally allowed to sell its vehicles through company-owned stores in Texas. Instead, the automaker has to showcase its cars in "galleries," which aren't permitted to offer test drives, give sales information, or even discuss options.
Opening up Texas for Tesla Stores could be a major sales boost for Tesla, considering the large population of the state and the removal of many of the obstacles to buying a Tesla.
Google (NASDAQ:GOOGL) has been developing a self-driving car for some years now. Today, the company has a Toyota Prius rigged up with enough Google tech to allow it to safely drive on public roads. Reports even came out that Musk had talked to Google about its self-driving car program.
But Musk sees the Google system as too expensive right now and looks toward an autopilot function that would control the car for around 90% of tasks, making it far more economical. If an effective computerized system can be developed, there are certainly a lot of lives to be saved. According to the National Highway Traffic Safety Administration, there were more than 33,000 traffic fatalities in 2012 and more than 10,000 deaths attributable to alcohol (presumably, Tesla's autopilot will stay sober).
Electric cars have been criticized for a lack of quick refueling infrastructure. Musk wants to change that by building out a network of Superchargers to fast-charge Tesla vehicles and make cross-country electric travel practical.
The financial benefits could come in the form of increased Tesla sales as well as the potential for licensing the use of the Supercharger network to other automakers marketing their own electric vehicles. Musk is even calling on robots to do some of the work at the stations by providing an even quicker battery swapping option.
Musk's vision for Tesla goes far beyond being a niche automaker producing the Model S and Model X. Plans for the Gen III sedan, an electric pickup, and even a return of the Tesla Roadster as the Model R have emerged. For Tesla to justify its current stock price, growth will be a necessity.
Fighting annoying traffic
Like many people, Musk is annoyed by L.A. traffic. But unlike most people, he donated $50,000 to a local advocacy group to try to fix it. While this amount of money doesn't make a dent in California's infrastructure budget or Musk's personal wallet, it will be interesting to see if Musk will do anything else about L.A. traffic.
Along with his teams of engineers, Musk has put out a 57-page document proposing a transportation system of highly efficient high-speed tube transports for people -- something he calls "a cross between a Concorde, a rail gun, and an air hockey table." Musk is currently leaving it to others to build this multibillion-dollar project, although he has offered to contribute some funds.
Perhaps profits could come from selling tickets and transporting goods (maybe Teslas, SolarCity equipment, and SpaceX rockets). In the meantime, someone needs to build it. And Musk is plenty busy right now, so it could be a while if we wait for him to do it.
When the first reports of fires on the Boeing 787 Dreamliner began to emerge, Musk was there to offer Tesla's help to solve Boeing's problems. While there was probably a public-relations play here, it shows that Tesla and Musk are trying to set themselves up as the go-to guys for everything lithium batteries.
A new jet age
Musk has an idea for a new jet plane, but not just any jet plane. It would be all-electric, take off and land vertically, and be the first supersonic passenger jet since the Concorde was discontinued from service. This issue seems to be on the back burner for now, as Musk has plenty on his plate.
In addition, this aircraft would require significant technological innovation to store electricity, effectively pull off vertical takeoff and landing, and avoid a noisy sonic boom. All three aspects are currently being worked on, with preliminary solutions being developed for each. Electricity for these aircraft would have to come from somewhere, and if a renewable theme is adopted, SolarCity could have a role to play in the aviation fuel industry. The fuel savings for the aviation industry would be enormous, so we'll have to check back in on this idea if it moves closer to production.
Imagine how expensive air travel would be if airliners had to drop off parts and land in the ocean every time. SpaceX is looking to change this situation for rockets, which could drastically decrease the price of space travel.
Long-term goals for SpaceX include the colonization of the red planet. Clearly this goal of an 80,000-person Martian colony is a way off, but the potential for both SpaceX and humanity in general could be enormous. Musk once said, "It'd be pretty cool to die on Mars, just not on impact."
Musk's interplanetary ambitions are definitely long-term and not suitable for the short-term speculator or even the near-term investor. When SpaceX moves closer to an IPO, we'll have to examine the company in greater detail.
Elon Musk is not one to stop and rest on his laurels. In everything from providing renewable power to changing both Earth-bound and interplanetary transportation, Musk's ideas offer a whole host of investment possibilities.
Not all of Musk's ideas are there for pure profit generation (such as his purchase of a James Bond submarine car to make it real), but they do provide a whole array of possibilities. Investors should always do their due diligence and examine the profit potential of investments. But even if you aren't investing in any company in which Musk plays a part, watching how these ideas play out will certainly be interesting and may lead to investment opportunities in companies Musk is not directly involved in.