Anyone can design the car of the future—but you have to be a little bit messianic to actually get it on the road. Attempts by Preston Tucker in 1948 and John DeLorean in 1975 did not exactly end in glory. Inventive financing left Tucker charged with fraud (he was later acquitted) and DeLorean with cocaine trafficking (he too was acquitted—after he spent 11 days in jail).
Yet at the dawn of the 21st century, sick of watching ice caps melt while Detroit dragged its heels, Internet entrepreneur Elon Musk and veteran car designer Henrik Fisker bravely entered this risky business. Their respective companies, Tesla Motors and Fisker Automotive, aim to make beautiful, high-performance electric cars. Cars for people like themselves—residents of Bel Air or Newport Beach, Calif., who once parked a McLaren or a Ferrari or a Maserati next to the Prius in their driveways. Let soccer moms buy Civic Hybrids, the battery-powered Mini E or—in a year or two—a plug-in like the Chevy Volt. Musk and Fisker would make chariots for the gentry—cars once believed impossible: red-hot and green.
Theirs is a story of breakthroughs and setbacks—and of conflict. Not with the big Detroit automakers who, some say, crushed Tucker and DeLorean. But with each other. Financial titans watch from the sidelines: Tesla Motors’ backers include Musk himself, eBay founding president Jeff Skoll, Google’s Larry Page and Sergey Brin, and institutional investors such as VantagePoint Venture Partners. Fisker Automotive’s angels include Palo Alto Investors and Kleiner Perkins (in which Al Gore is a partner), as well as a new face on the green bandwagon: QIA, the Qatar Investment Authority.
It all started in 2002, when PayPal co-founder Musk sold that company for $1.5 billion and decided to use his share to fix the world. He started Space Exploration Technologies—SpaceX—to cut the cost of reaching orbit so more people could get there. At first, he ran only the company’s business side, but when his rockets began exploding, he decided to supervise the engineering, too. His physics major had to be good for something, and indeed it was. The rockets improved. SpaceX, in which Musk had invested $100 million of his $300 million fortune, became a cash-flow-positive company. Rocket No. 4 reached orbit.
Since 2004, Musk, now 37, has also been chairman of Tesla Motors, the Silicon Valley company that began production of its all-electric $109,000 high-performance Roadster this year and is in development on the Model S, a lower-priced all-electric luxury sedan. Last January, amid problems with the Roadster’s transmission, Musk fired three senior executives and more than a dozen other employees; months earlier, he’d replaced CEO and Tesla founder Martin Eberhard. In October, pressured by the global credit crisis, Musk announced layoffs, delayed the production of the S a year, ousted yet another CEO and took the job himself. He could shepherd Tesla through this crunch, he reasoned. His rockets, after all, had defeated gravity.
Musk does not like obstacles, and last spring he identified another: Henrik Fisker, designer of the Karma, an opulent plug-in hybrid sedan that would compete with the Model S at a higher price.