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Why Elon Musk Thought Tesla Would Fail

Stocks in this article: TSLA GM

NEW YORK (TheStreet) Appearing on CBS (CBS) program 60 Minutes means you've made it. Well, not only has Tesla Motors (TSLA) and CEO Elon Musk made it, but Musk is venturing to go where no one has gone before. Even if he goes broke doing it.

In an interview on 60 Minutes last night with Scott Pelley, Musk noted that he's been working on grand, ambitious plans not only to make money, but because they will further humanity. "If something's important enough, you should try, even if the probable outcome is failure," Musk said regarding risky projects, and Tesla in particular. During the interview, Musk noted he thought Tesla would likely fail, given the nascent state of electric vehicles at the time.

"Well, I didn't really think Tesla would be successful," Musk said. "I thought we would most likely fail. But I thought that we at least could address the false perception that people have that an electric car had to be ugly and slow and boring like a golf cart." 

That last line about changing the perception of electric vehicles is perhaps more important than the failure part, even if Tesla's initial investors probably weren't too thrilled hearing that. The electric vehicle had been around long before Tesla and the Model S, most notably with General Motors' (GM) EV1, which was produced from 1996 to 1999. The car, which was only leased (not sold) in California and a small program in Georgia, was hideous looking, resembling a space ship, a sort of golf cart of the future. Here's the car's Wikipedia page, for a trip down memory lane.

Now, Tesla courtesy of sleek design, and numerous awards, notably from Consumer Reports, is the undisputed leader in the electric vehicle market. In 2013, the Palo Alto, Calif.-based Tesla delivered over 20,000 Model S units, with 6,892 coming in the fourth quarter. In 2014, the company expects to deliver 35,000 units, as it ramps up deliveries in Europe, and eventually China. The company will also have a limited number of Model X production units on the road by the end of the year, with sales starting in 2015.

Also See: Tesla Model S Review: Precision, Luxury, and Power Redefined

Also See: Tesla's Model X: A First Look

Musk wants Tesla to get to over 500,000 units delivered per year, courtesy of the upcoming Gigafactory, which will cost Tesla and partners up to $5 billion, making more lithium-ion batteries than any other plant in the world. On Tesla's fourth-quarter earnings call, Musk noted Panasonic would be a potential partner for the plant, given the company's pre-exisiting deal with Tesla for lithium ion cell production, but so far, Panasonic has been non-committal about the investment in the plant.

Not only is Musk the co-founder of Tesla, but he also helped start an online banking company that later became PayPal, which was then sold to eBay (EBAY) for $1.5 billion, with Musk's share being a little more than 10% of that ($180 million). Musk is also the CEO and founder of SpaceX, a space exploration travel company that won a $1.6 billion contract with NASA to fly cargo resupply missions to the International Space Station.

Though SpaceX is already profitable and cash flow positive, according to the company's Web site, space exploration is still a dangerous and risky business, and with Musk's ambitions, it's certainly not out of the question for something to go wrong. "I'd love to have SpaceX be the company that brings humanity to Mars, and I hope I see it while I'm still alive," Musk said on 60 Minutes

It's abundantly obvious that Musk, 42, is incredibly ambitious and is thought of as a modern day Thomas Edison, with some having compared him to Steve Jobs, Apple's (AAPL) former CEO. It's also obvious that though he's become incredibly wealthy thanks to the success and stock price of Tesla, as well as PayPal and SpaceX, Musk is more hellbent on furthering humanity  with projects like the Hyperloop, than he is about padding his own pockets.

You can watch the entire interview with Pelley here:

--Written by Chris Ciaccia in New York

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