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When Elon Musk first drove a prototype of a Model S out from behind a curtain in 2009telling the crowd they were looking at what would become the first affordable, mass-produced electric carit was actually a hacked-together Mercedes with modified body panels. Behind the curtain, engineers pumped ice water over the battery so the car could keep going. The car wasnt ready to drive, but Tesla started taking customer deposits and using the demo to push for more investment. It’s one in a long series of examples of the company hyping a new product early because it was desperate to raise more money to keep goingand to boost the image of Musk as a visionary leader, able to build something that other car companies couldnt. Musk didnt understand the business he was getting into, says Edward Niedermeyer, author of Ludicrous: The Unvarnished Story of Tesla Motors, a 2019 book that documents the chaos at Tesla. He had to come up with a big new hyped thing to raise the money to pay off the last promise. It got them on something very common for Silicon Valley startups, the fundraising treadmill. That fueled this decade-long, spiraling sort of confidence game. Part of the game is that the stakes have to get raised every time. (Tesla didn’t respond to a request to comment for this story, but also didn’t say that the book was inaccurate when it was published.) Musks role at the so-called Department of Government Efficiency is the latest example of raising the stakes, Niedermeyer says. Elon Musk (in driver’s seat) and Tesla chief designer Franz von Holzhausen (in passenger seat) at the Model S unveiling. March, 2009. [Photo: Robyn Beck/AFP/Getty Images] Musk invested in Tesla in 2004 with money hed earned from selling two internet startups. Teslas founders, two Silicon Valley engineers, didnt have experience in the auto industry either, Niedermeyer writes. But they had the idea that using lithium-ion batteries could make electric cars viable. They also believed that by making a desirable, high-end electric sports car, they could make enough money to fund a more affordable mass-market version (Musk later presented the strategy as his own in a blog post about Tesla’s “secret master plan.”) At a shareholder meeting in 2016, Musk admitted that the startup had had no idea what we were doing. They originally planned to modify an existing sports car, which another company would build. But they kept making more and more changes, driven in part by Musks desire to make the car sexier. No one understood how much the customization would cost, or exactly how much cash the company was bleeding. The prototypes had multiple problems. When Google founders Sergey Brin and Larry Page tested one of the cars, it couldnt go more than 10 miles an hour because of a bug. When the startup was closing its Series D round of funding, in 2007, the team told investors that the Roadster would cost $65,000 to produce; auditors found that it would actually cost $200,000, far more than the price of the cars. More chaos ensued, including Musk pushing out one of the companys original founders, and engineers scrambling to bring down costs and to solve last-minute problems with the design. When the cars finally started getting delivered to customers in 2008, they still had multiple flaws. Musk, who then took over as CEO, operated on the principle that the end justified the means. He used customer deposits, for example, to keep Tesla running. At one point, he announced that the company had closed a $40 million debt round before it had actually happened; later, he said that the company was going to get a massive loan from the DOE before Tesla had successfully applied. The company kept going in part because of luck. In California, for example, the states requirement for other car companies to buy zero-emission vehicle credits gave a Tesla much-needed source of cash. (Now, it offers less revenue, because other car companies have EVs of their own and dont need to buy as many credits.) Larger car companies, including Daimler and Toyota, made deals with Tesla because they saw it as innovative. The DOE loan helped the company start a battery factory with Panasonic, and finish building the Model S, which went to market in 2012. Later, as the pandemic temporarily boosted the auto market, Tesla finally looked like it could be profitablebut that trend has turned around now as sales have dropped. All along, as the company needed more cash from investors or if Musk wanted to inflate its share price, he has hyped up new products, feeding the mythology that he’s more innovative than the rest of a stodgy auto industry. The hype for the Model S started long before the first Roadsters had ever been sold. Later came hype for the Model X, its first SUV, which the company repeatedly delayed; it too was filled with problems when it finally came to market. Musk also oversold Teslas Supercharger network, saying customers would get free charging forever and that the chargers would run on solar power. Musk suggested that if there was ever a zombie apocalypse, Tesla drivers could still keep charging. Despite the fact that running a charger fully off-grid would require a huge number of solar panels for each charger, Musk kept claiming that was the plan for years. (The free charging deal went away after the company couldnt afford it, though Cybertruck users have limited free access now.) Later, as Google made progress on its self-driving tech, Tesla said it was racing to develop autopilot tech. After a driver had a fatal crash using Autopilot, engineers said that theyd wanted to make the system safer, but Musk rejected the ideas because of cost; Musk denied this. Niedermeyer is now writing a second book focused on Teslas pivot to self-driving and AI. Teslas ‘full self-driving’ is the biggest fraud that Silicon Valley has ever seen, he says, adding that he doesnt think its ever going to happen. Now, as car sales falter because of Musks politics, investors are having to decide, OK, how much do I really believe this? Niedermeyer says. Because thats really what the valuation is coming down to as long as the core business continues to erode. (The company has also hyped robots that it initially demoed with humans in robot suits; last week, Musk again laid out his grand vision fr the Optimus robots, as he told employees to “hold onto their stock.”) Working in the Trump administration, where Musk can help control the regulators that might slow down self-driving tech, could be seen as another step in Musks confidence game. So far, it also seems to be helping some of his other businesses. SpaceX, for example, was facing fines, a lawsuit, and a complaint from multiple agencies, and Neurolink and X were facing investigations. All of those challenges could go away. As with Trump, being part of the government could also help keep Musk out of legal trouble. But as DOGE shows its incompetence, there’s also a chance that it could be where the confidence game ends. The surge in public antipathy for Musk has led to Tesla protests and dropping sales, adding to declines that were already happening in Europe and China. Tesla stock has dropped so steeply that Musk convinced Trump to stage a Tesla sales pitch at the White House. (Niedermeyer points out that this stunt was typical of Musk’s modus operandi: rather than long-term strategic marketing, Musk is flying by the seat of his pants.) If the stock price does fall far enough and fast enough, Tesla’s founder might finally lose his image as a visionary in the eyes of investors. And in an empire that was built on Musk’s “genius,” that could be disastrous.
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E-Commerce
Johnstown, Pennsylvaniawhich has been battered by floods and economic declineis one of the poorest cities in the state, and its schools rely heavily on federal funding to serve its students. Nearly a third of the Greater Johnstown School Districts budget came from federal dollars in 2023, funding everything from safer classrooms to career and technical programs in auto body work, welding, and cosmetology. But the federal funding benefiting Johnstowns public schools may be in jeopardy if the Trump administrations plans to eliminate the Department of Education come to pass. Last week, the department laid off nearly half of its staff, signaling that the president is serious about his campaign promise to eliminate the agency. Nancy Weaver Behe, who teaches cosmetology at Greater Johnstown High School, said the loss of federal support would come as a blow to kids that already must contend with poverty and a lot of hardships. The career education the school provides helps them stay motivated, she said. At a campaign rally last fall not far from Johnstown in Indiana, Pennsylvania, then-candidate Donald Trump said eliminating the Department of Education would allow him to move education back to the states. But education is already largely the domain of states, which set curricula, establish academic standards, and determine teacher certification requirements as well as graduation and testing benchmarks for students. States and local governments also provide public schools with a lions share of their funding. Just a fraction of public school funds13.6% nationwide as of fiscal year 2022come from the federal government. Still, the Department of Education plays a critically important role in the education of underserved students, said Deborah Gordon Klehr, executive director of the Education Law Center in Pennsylvania. The main vehicle for helping struggling students is Title I, a federal program that provides extra funding to schools with high numbers of low-income students. Those schools are typically in communities with lower property values, which limits the revenue they can generate through local property taxesthe primary source of school funding. Title I helps so many students that are in dire circumstances and that need extra help in reading and math, said Weaver Behe, who is the president for the central-western region of the Pennsylvania State Education Association. Title I funds supportive services, like teacher aides, learning specialists and reading and math intervention. Weaver Behe worries that the Education Department now lacks the staff to ensure those programs are funded. And if the worst happens and funding from the department is eliminated, she wondered aloud, How do we adjust to make up for nearly a third of our budget? Trump can’t unilaterally eliminate programs like Title I, as they’re enshrined in federal law and require congressional action to be dismantled. But Project 2025, which opens its education chapter with a call to eliminate the Department of Education, may offer an indication of Trumps legislative agenda. Project 2025 proposed transforming Title I and federal special education funding into no-strings-attached block grants, allowing states to continue the programsor redirect education dollars elsewhere. Its unlikely the state could make up for any gaps if federal dollars are lost. As of 2022, Pennsylvania ranked 42nd in the country in share of state spending on education. In fact, Pennsylvanias Commonwealth Court recently ruled that the state did not meet a constitutional requirement to fund a quality education system, and ordered the state to overhaul it through adequate investment. Pennsylvania schools very much depend on the federal government, said Marc Stier, executive director of the Pennsylvania Policy Center. K-12 schools in the state receive about $1.6 billion in federal education dollars out of a total $36 billion budget. At a little more than 4% of total revenue, thats not a lot of money, Stier said, but its critical money. That funding, said Aaron Chapin, president of the Pennsylvania State Education Association and a middle school teacher in Stroudsburg, is targeted toward our most vulnerable students. While the bulk of federal funding in Johnstown is intended for students from low-income families, other federal funding streams support students learning English or those in special education classrooms. In Philadelphia, Marsena Toney is an autistic support specialist at John Story Jenks Academy for Arts and Sciences. In her special education classroom, there may be three or four professional aides supporting as many as eight students, who all have different needs and behavioral concerns, Toney said. For example, some aides may offer hands-on assistance with writing activities because a child cant hold a pencil independently. Others provide speech and occupational therapy and even assist students with using the restroom. And adequate support for students in need can be costly. Teachers already have to [buy supplies] out of pocket to aid in their day-to-day teaching, Toney said. She purchases science materials, fidget toys to aid with focus, and calming supports for when her students get frustrated or overwhelmed. If funding for special education classes were reduced and her students expected to learn in a general education classroom, the complex needs Toney must address in a single day would be very difficult to manage. With the prospect of reduced federal funding on the horizon, Chapin said teachers are nervous about a possible future of overcrowded classrooms and students not getting the services they need. Its going to affect our kids, he said, but its going to affect all of our communities. By Kalena Thomave, Capital & Main This piece was originally published by Capital & Main, which reports from California on economic, political, and social issues.
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E-Commerce
When people talk about work-life balance, they often mean that they have some engagement with activities outside of worknot just filling the hours of the day when they’re not working. That engagement might involve taking care of family members, engaging as a volunteer, or participating in a hobby. If youre fortunate enough to have the time to spend on a hobby, does it matter what you do? Perhaps any activity you engage in outside of work is likely to lift your spirits. But research suggests that different activities affect your overall happiness in different ways. The power of movement In particular, hobbies that enable you to be active make you happier than those that involve less movement. So, participating in sports or physical activity (even relatively mild activity) makes you happier, as does engaging in activities that involve some travel (like visiting significant buildings) or engaging in active creative pursuits like dancing or singing. In contrast, more sedate activities like going to the movies or theater or reading a book have no strong influence on happiness overall. What is going on here? For one thing, physical activity helps to keep you healthy. The more you move and stay fit, the more you are likely to continue to stay healthy and fit later in life. So, the activities themselves are enjoyable, and they have a positive impact on factors like health that have a positive effect on well-being. Moreover, many of these activities are actively social. A lot of sports require engaging with other people. In addition, a lot of active creative pursuits and travel are done in social groups. Humans are a social species, and so our motivational system and our emotional state thrive when we are around at least a small number of other people. Finding the right hobby for you The hobbies that dont have much impact on well-being are those that are primarily done while seated and are not particularly social. Reading is typically done alone, though you might ultimately talk about a book with friends. You might go to a theater with friends to see a play or watch a movie, but you actually participate in that activity sitting quietly in the dark. Of course, there are lots of reasons to engage in hobbies. You might want a diversion from your work. You might want to do something relaxing. However, the data suggest that if your goal for taking up a hobby is to be happier and feel more satisfied with life, then staying physically and socially active is likely to be your best bet.
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E-Commerce
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