Elon Musk's rocket soared; how about his electric Tesla?

FREMONT, Calif. -- Elon Musk just proved that his commercial rocket venture could reach the International Space Station. Now, he wants to show well-heeled motorists on Earth how to navigate without gasoline.

The California entrepreneur who heads companies at opposite ends of the state is hardly a household name. But he's emerging with a higher profile with the success of his cutting-edge, high-risk ventures.

The back-to-back successes began last month when SpaceX — the Southern California rocket company where Musk is founder, CEO and "chief designer" — made its Dragon the first commercial spacecraft to dock at the International Space Station.

Then last Friday, Tesla Motors— the electric car company where Musk is co-founder and CEO — held a splashy ceremony at its cavernous factory here southeast of San Francisco to deliver the first of its new Model S electric luxury sedans. The four-door is rated by the government at up to 265 miles per charge for the costliest model, about three times more than mainstream electric cars.

Running either SpaceX or Tesla would be enough high-wire excitement for most CEOs. "There are a lot of easier ways to make money," Musk conceded in an interview at the Model S event. But Musk says he feels driven to have a personal hand in both. After years of development for both the rocket and the car, Musk is savoring the success. Yes, he acknowledges, he's on "a bit of a roll." But he's quick to add, "I don't want to sound complacent."

That's an unlikely accusation. Musk made a fortune as co-founder of online payment service PayPal, which was sold to eBay. At that point, he could have followed other Silicon Valley tycoons into early retirement and raised his five young sons.

Instead, Musk, who turns 41 Thursday and recently split from his second wife, British actress Talulah Riley, plowed his money and his talent into not one but two costly, high-risk ventures.

One paid off with the flight of the Dragon spacecraft, lifted aloft by a Falcon 9 rocket, both products of Musk's Space Exploration Technologies — or SpaceX, for short. SpaceX is on track to carry out its government contract to ferry supplies to the station, taking over where the recently retired NASA space shuttles left off.

Now, naysayers are voicing doubts about whether Musk can make a success of Tesla. The company was founded in 2003 by Silicon Valley engineers bent on shedding electric cars' wimpy image.

Tesla sold more than 2,300 of its first effort — a high-performance, $109,000 electric roadster based on a heavily modified Lotus sports car — from the start of production in 2008 through the end of last year. Though it says the roadster was a moneymaker, Tesla never has made an annual profit. It survives on investor funds, Musk's included, and on taxpayer loans, having drawn $360.5 million of a $465 million federal energy loan as of March 31.

Musk insists he never intended to be CEO of Tesla, planning instead to spend only about 20% of his time on it. But in 2008, with the company struggling and the economy sinking, he says he had to make the transition from investor to boss. "I had a very tough choice," Musk says. "Either I apply a lot more time and be willing to absorb an enormous amount of pain, or Tesla would die."

We can make it better

During development of the roadster, Musk became notorious for the costly design changes in his quest for perfection. Now, however, he and other executives talk about the roadster as fun but unrefined — a decent first effort.

"We learned a lot of lessons," Musk says. Chief among them was not to depend too much on suppliers or outsourcing the car, which had a body made in England by Lotus that was fitted with Tesla's California-made battery pack.

The Model S sedan "is an electric that's better in every way," he says.

But it's still pricey. The car will start at $57,400 plus $990 for "personal delivery" for a base version that Tesla says has a range of 160 miles at a constant 55 miles per hour. The price goes up to $105,400 for the fully loaded version with a battery that gets the top-rated range, which Tesla says is 300 miles under the same continuous speed conditions and which the EPA rates at 265 miles in routine driving.

The market for such extravagant wheels is limited, not just in the U.S. but around the world. Musk says Tesla needs to sell about 8,000 a year to break even; the company's goal is sustained annual sales of 20,000 for Model S sedans worldwide.

Analysts have doubts, noting that the market for pure electric cars — those without gasoline-powered range extension, as the Chevrolet Volt has — is about 1% of the new-car market. Of pure electrics on the market, most are a fraction of the cost of the Model S. The best-known in the U.S. is the Nissan Leaf compact sedan, which starts at $35,200 plus $850 in delivery fees.

As for the Tesla, "I think they can sell some, but they will have a hard time with the 20,000 figure" — at least at the higher price points, says Rebecca Lindland, research director for IHS Automotive.

But Musk is quick to point out that he has 10,000 reservations, enough to keep the production line busy for months at the former General Motors and Toyota joint-venture factory. The car's power pack and electronics also are robust enough that Tesla is producing a drivetrain for Toyota, too, for the recently unveiled electric version of the RAV4.

Anyone who plunks down a $5,000 deposit today on a Model S will have to wait until May for delivery, says the company's sales chief, George Blankenship.

As robust as its electronics may be, that's not what will sell the Model S, Musk insists. "Our goal is not to make a long-range sedan," he says, "but the best car in the world."

For sure, the car has lots of features that break new ground in both the luxury and electric car worlds. For instance, the charging unit is built into the car, so owners don't have to have one installed in their garages (although they will want a 240-volt outlet, because the 265-mile version can take up to eight hours to recharge even on that.)

The interior is dominated by a center-console touch-screen that measures 17 inches diagonally, larger than the combined screen area of two Apple iPads and bigger than most laptops. The touch-screen controls nearly every function.

Information on the screen can be configured in multiple ways, such as navigation on the top and radio settings or cabin temperature on the bottom. The screen also allows full Internet access, even while the car is moving.

The car's door handles are flush against the athletically styled body and extend only when a hand brushes against them.

Tesla says the performance version of the car whips from zero to 60 miles an hour in 4.4 seconds — quicker than a Porsche 911 Carrera sports car.

That personal touch

Tesla officials say they sweated the details to achieve both the performance and styling touches throughout the car. Musk took a personal hand.

Having a CEO who is a control freak when it comes to product details isn't always pretty.

Three weeks ago, he says, he told the powertrain team that he felt the acceleration from 70 mph to 90 mph was inadequate. When they protested that it couldn't be improved, Musk amped up the gentle persuasion: "Imagine," he told them, that "there was a gun to your head" and the trigger was about to be pulled. "Would you find a way to make it better?"

Musk got what he wanted: Acceleration in that speed band was improved 20%.

The South African-born Musk, who has physics and business degrees from the University of Pennsylvania, is "an amazingly strong engineer," says JB Straubel, the chief technology officer. "We are always trying to do things on the edge of impossible."

Having designed the car, Musk now has to make and sell it profitably, which again could put him on the edge of impossibility. Tesla has about 1,800 employees and plans to ramp up the plant this year to about 80 cars a day.

Compared with hundreds of dealers for its luxury competitors, Tesla has 22 dealers worldwide, including 12 in the U.S. Another 10 are planned by the end of the year.

And tiny Tesla remains vulnerable to catch-up luxury rivals such as BMW or Mercedes-Benz, which could emulate Tesla's technical advances and throw a lot more marketing muscle behind the effort, says Jim Hall of 2953 Analytics.

But to do so would mean crossing Musk, a perfectionist who may be able to think ahead of competitors. Whether it's space or cars, few doubt his ability as a visionary who actually can bring his ideas to fruition.

"What makes him special," says sales chief Blankenship, "is, what he is thinking about now is what others will be thinking about in 20 years."