6 March: Elon Musk tweets “The coronavirus panic is dumb”. At the time the USA has 332 confirmed cases, with 17 deaths.
Did you know that Elon Musk promised to deliver 1,000 ventilators to hospitals in California? That’s what the governor, Gavin Newsom, announced on the 23rd March. It’s an extremely nice goodwill gesture from one of the world’s richest men to an area badly affected by COVID-19. Except, of course, it’s not true. It transpired later that the governor’s office hadn’t heard from a single hospital that had received any ventilators. CNN contacted a number of hospitals who Musk claimed had, and discovered that Musk had actually shipped a series of cheaper machines (known as biPAP or CPAP machines), badged with Tesla logos. To give you some idea of what “cheaper” means, CPAP machines have a typical cost of $500, while biPAP machines have a typical cost of $1200. Ventilators cost between $20,000 and $50,000.
Elon Musk has reacted quite angrily to criticism of this, as have his fans on Twitter. “At least it’s better than nothing” they might claim. Which is on the surface true — although, given some doctors have advised that coronavirus patients should not be ventilated with CPAP and biPAP machines, citing an increased risk of transmission to other patients, it might not actually be true in the long run. “What have you done to fight coronavirus?” they might ask. Which, again, is on the surface true — but then again, I am 26 years old and I have less than five figures in savings, rather than leading a world-renowned engineering company. And, to Musk’s credit, he, or someone working for him, apparently asked the hospitals what they needed and delivered them, to spec, as requested. We still have no confirmation on that neat 1,000 figure, though, mainly because of his decision to cut out the government entirely.
Interestingly, however, we can compare Musk’s actions to those in a similar position. In particular, the need for engineers and engineering equipment to create more ventilators due to the expertise required. So looking at car companies, General Motors now have a $500m contract with the US government and Ventec Health Systems that will see them produce 30,000 ventilators in total over three months. Ford, meanwhile, have been working with a healthcare company to build up to 7,200 “simpler” ventilators a week. That’s just in the US; here in the UK, a group of engineers for Formula 1 teams have formed “Project Pitlane” to create ventilators, working 18-hour days to bring a project from design to prototype in just a few weeks.
It is true that none of these companies are doing it out of the goodness of their hearts — they have both a financial and PR incentive to do what they’re doing. And it’s important to add that at the end of March Musk announced that Tesla’s Buffalo Gigafactory will open back up to produce a number of ventilators, although I cannot find any figures on what that will produce — and we should perhaps not expect much out of a single factory, especially given Musk’s somewhat lackadaisical relationship with what actually constitutes a ventilator. But what makes Musk’s presence in this crisis unique is his close relationship with Tesla; no other engineering CEO is out on the news getting involved in this way. To hear it from Musk, you would believe he has personally delivered 1,000 much-needed ventilators to California hospitals.
What Elon Musk has actually done is acquired some cheap devices, stuck a Tesla logo on them, and sent them to hospitals. But what he has gained is the headline for the promised ventilators, while few have seen the corrections in the aftermath. He has even been able to promise ventilators to any country in which Tesla currently operates despite having so far delivered precisely zero. Meanwhile some of his other decisions have slipped through the cracks largely undetected, such as allowing the Tesla factory to remain open when other companies were locking down and publicly downplaying the coronavirus panic as “dumb” on Twitter. This is what Musk is good at: leveraging his personal brand. Musk is Tesla and Tesla is Musk, which is why the board had to beg him to stop Tweeting because he was dragging the company’s stock price down. “Elon Musk donates 1,000 ventilators to California” is a great headline; sticking the Tesla stickers on is great spin.
What it isn’t is a helpful response to the COVID-19 crisis.
19March: Elon Musk tweets “Based on current trends, probably close to no new cases in US too by end of April” (referring to a day where no new infections were recorded in China). The USA has 4,397 confirmed cases, bringing the total in the US to 13,133, with 195 deaths.
Elon Musk’s personal brand and being seen to be helping the world go hand in hand. He’s a space explorer, a pioneer of clean energy, an innovator. His interests and the world’s interests are not the same but they are often mutually beneficial — that’s why he gets the government contracts. Tesla’s work on developing electric cars will help others working in clean energy, and boosts both Musk’s image and his fortune; likewise the efforts of SpaceX pick up the slack left behind by a jaded public sector while allowing Musk to play the part of eccentric inventor turning science fiction into science fact. His real success, though, is self-marketing. He is beloved on the social platforms of the world, with fans quick to come to his defence on Twitter and praising him to the skies on Reddit and Facebook. This is in spite of his numerous controversies and especially his combative tone with critics. So it would make sense that Musk would look to find a way to leverage these successful attributes — his business savvy and branding opportunities — to find a way to help in the COVID-19 crisis.
To break down this gesture, the total cost of 1,000 biPAP machines — I’m being generous here and assuming Musk donated none of the cheaper CPAP machines — is $1,200,000. Elon Musk’s net worth is roughly $36,900,000,000,000. His donation is worth roughly 0.0033% of his net worth. (The median net worth of an American household is just under $100,000; proportionally this is the equivalent of the average American household donating $3.30). Donating 1,000 actual ventilators, assuming that a ventilator costs $20,000 (the lower bound), would cost Musk $20m, still less than 0.1% of his net worth. But Musk would never do that; I doubt the thought ever crossed his mind. The CPAP and biPAP machines are cheaper; one does not get rich by giving expensive equipment away for free. It would not even surprise me if he saw this as a genuine innovation that no-one else had spotted. And so he promises 1,000 ventilators, donates the breathing aids (at an $18.8m saving), and he considers it a job well done.
What Musk has actually done is he has hit the limits of his expertise, the brink of his mutually sycophantic arrangement with the world. Because the truth is there is a much simpler way he could have helped with the COVID-19 pandemic: he could have donated the money he spent directly to medical efforts, even directly to the hospitals themselves. The breathing aids were not manufactured by Tesla, who simply acquired them. The hospitals could have decided for themselves which machines they would purchase, or perhaps use the money to fund other benefits such as additional staff. It would have generated populist headlines, it would have leveraged Musk’s brand, it would have been a drop in the ocean financially. To bring it back to the “what have you done”, well, this looks remarkably like what others (like Bill Gates) have indeed done.
But it would allow someone else to decide what they wanted to do with Musk’s money, and that is intolerable to a billionaire. We can see this in the way that the ventilators were sent directly to the hospitals without involving the local government: because, to a man like Musk, government is inefficient and bureaucratic; only the direct actions of a great man like him can turn the tide. It is not surprising that Governor Newsom, who had previously praised Musk for his generosity, was concerned that he had not heard anything about the promised ventilators — but then that was the point. Newsom’s role in the Elon Musk story was to announce the ventilators, lavish praise on their provider, and then to go do whatever it is government pencil-pushers do all day, while Elon Musk single-handedly saves California from a public health crisis.
There is often, I think, a perception that billionaires place too much importance on their money, that they are all Scrooges looking to pinch pennies and find tax shelters lest they lose any of their vast fortunes. Perhaps it could be flipped: billionaires are the way they are because they do not think that money is important. They have lots of money, for sure, because they have worked hard all their lives, and been rewarded accordingly, but it is the things they do that are important; the money is just window-dressing. It would explain why Mike Bloomberg can spend more on a doomed presidential campaign than he might end up paying the government in taxes; the billionaire has the billions because the billionaire knows best how to spend the money. If the billionaire does not actually know best, why does the billionaire have the billions?
Which brings us back to Elon Musk. Musk is rich because he is clever and his intelligence is shown by his wealth; therefore he is ipso facto the smartest man in the conversation. Hence the easily-debunked lie about ventilators; the implicit rejection of government distribution of resources; the harsh invective against his critics. Musk simply knows that he is correct; anyone arguing otherwise is a bot, or a hater. He will forever claim that he has delivered 1,000 ventilators because it is integral not only to his image but his very self that he be the one to make the difference. If he could achieve the same effect by donating what is to him an inconsequential sum of money, then he is not an agent of change, a grand innovator, a polymath. He is simply a man sitting on billions of dollars. And that is the one thing that he can never abide.
28 April: Elon Musk tweets “FREE AMERICA NOW”, referring to the lockdown measures imposed by many states to slow the spread of coronavirus.
At the time of writing, the US has over 1m confirmed coronavirus cases and just under 60,000 deaths.
