Musk's asset accrual and paying for Mars

[OTV Booster]

Change Mars to Lower Slobvinea, which has few developed natural resources, a tight labor pool and by normal standards, a small market for Tesla derived vehicles. Building a factory would be a massive money sink and would violate the only core legal requirement of a US corporation - to enhance shareholder value. It would be a non-starter.

It's a widespread myth that company directors have a legal obligation to increase shareholder value. There is no such law.

Anyway, how could a court of law possibly decide beyond any reasonable doubt that investing in Lower Slobvinea would ultimately decrease shareholder value? Such a law would be totally unenforceable.

https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits

I stand corrected.


Still, there are a lot of legal jackals out there. I've watched them circling a bleeding corporate carcass soliciting clients. I also see the need for shareholder legal support in too many cases, so I'm not foaming at the mouth about this.


There was a discussion over in 'mars export economy' about Trust legal structures and non profit corps acting as an umbrella for businesses to invest in Mars without risking stockholder ire. One contributor, with legal training and as rabid an NSF'er as anyone, was quite informative and outlined a structure that drove me cross eyed, and I'm fairly business literate.


I could promise to go find it, but I don't want to lie to you. 

[OTV Booster]

he has a controlling interest (I think?  Perhaps not any more)

He doesn't have anywhere near a controlling interest of Tesla.  He owns ~20%.

Elon owns the majority of the voting shares.

No.  He owns ~20% of Tesla and has ~20% of the vote.  Tesla has only one share class.

Wait, are you sure? I thought one of the reasons the S&P gave for not including Tesla is that Tesla has multiple share classes.

IMO one of the key reasons why S&P has not (yet) listed Tesla is that the majority of it's profits currently come from regulatory credits (>half a billion dollars last year) and these are not seen as sustainable in the long term.

You can’t just split one revenue stream from the others and call it the source of all profits. It’s dishonest and silly. Also, I doubt that has anything to do with it.

If I'm looking at the financial health of a company and there is a revenue stream that is disportionate to what is normal in that industry, I will look at it closely, especially if that revenue stream does not come directly from sales.


If I find that the revenue from this stream is a significant portion of profits, I would be justified in forming the opinion that if all else stays constant, removing the revenue stream will drop profits significantly.


I'm getting into an area where my knowledge is limited, but I think that from the S&P's point of view, they want the stocks in their index to have limited volatility and the regulatory credits with their uncertain future, adds volatility.


I think we saw numbers a few days ago showing profits and credits and I think they were in the ballpark but don't remember the details. /(;/;/&" I can't go back to find it without loosing this post. I'll add an edit.


Edit:
https://www.google.com/amp/s/www.cnbc.com/amp/2020/07/23/teslas-sale-of-environmental-credits-help-drive-to-profitability.html
Second Q 2020
Credit: $428m
Net Profit: $104m


Worse than I thought. When Tesla hits anywhere near break even without the credits they'll probably be the darling of the S&P.

[OTV Booster]

As a public company, Tesla’s ability to do stuff because Elon feels like it is actually relatively limited ...

.... has duties to other shareholders and cannot just make the company subsidize unrelated things.  He can do a little stuff because he’s successful and people won’t complain, but he cannot use Tesla to push the Mars effort as suggested

Of course there’s an assumption here that investing in Mars is a bad investment.

Elon will be trying to persuade thousands of companies that investing in Mars is a good move, and he believes it. So you can bet he’ll be trying to persuade Tesla to get involved.

Tesla makes related products. It makes strong glass (and glass made of metal), solar panels, batteries, AI for navigation, roof tiles, as well as vehicles.  But they also consider their gigafactory to be a product they make.

Already they’re advertising for designers for their cars who will also design the starship interior. Tesla will invest in Mars in some way.


Sent from my iPhone using Tapatalk

Yes! The solar panels and batteries would be the angle. Maybe the glass. Vehicles would be insignificant.


The very first mission will have a massive power requirement and both PV and batteries are at the core. But only a few vehicles. This will not change over time. More vehicles? That means even more power needed.


What are the odds that some Tesla engineer is noodling ISRU PV and batteries? And another is noodling ISRU glass?

[Robotbeat]

...
IMO one of the key reasons why S&P has not (yet) listed Tesla is that the majority of it's profits currently come from regulatory credits (>half a billion dollars last year) and these are not seen as sustainable in the long term.

You can’t just split one revenue stream from the others and call it the source of all profits. It’s dishonest and silly. Also, I doubt that has anything to do with it.

If I'm looking at the financial health of a company and there is a revenue stream that is disportionate to what is normal in that industry, I will look at it closely, especially if that revenue stream does not come directly from sales.


If I find that the revenue from this stream is a significant portion of profits, I would be justified in forming the opinion that if all else stays constant, removing the revenue stream will drop profits significantly.


I'm getting into an area where my knowledge is limited, but I think that from the S&P's point of view, they want the stocks in their index to have limited volatility and the regulatory credits with their uncertain future, adds volatility.


I think we saw numbers a few days ago showing profits and credits and I think they were in the ballpark but don't remember the details." I can't go back to find it without loosing this post. I'll add an edit.


Edit:
https://www.google.com/amp/s/www.cnbc.com/amp/2020/07/23/teslas-sale-of-environmental-credits-help-drive-to-profitability.html
Second Q 2020
Credit: $428m
Net Profit: $104m


Worse than I thought. When Tesla hits anywhere near break even without the credits they'll probably be the darling of the S&P.

Sure, and if all other carmakers had to hit those targets by either actually making EVs or reducing ICE sales instead of paying Tesla, Tesla's competitiveness (by selling powertrains, etc) and profitability would be even higher. Same if you replaced those credits with a proper tax on the CO2 externalities. Or gave Tesla the same tax credits that foreign EV makers get.

[OTV Booster]

As a public company, Tesla’s ability to do stuff because Elon feels like it is actually relatively limited ...

.... has duties to other shareholders and cannot just make the company subsidize unrelated things.  He can do a little stuff because he’s successful and people won’t complain, but he cannot use Tesla to push the Mars effort as suggested

Of course there’s an assumption here that investing in Mars is a bad investment.

Elon will be trying to persuade thousands of companies that investing in Mars is a good move, and he believes it. So you can bet he’ll be trying to persuade Tesla to get involved.

Tesla makes related products. It makes strong glass (and glass made of metal), solar panels, batteries, AI for navigation, roof tiles, as well as vehicles.  But they also consider their gigafactory to be a product they make.

Already they’re advertising for designers for their cars who will also design the starship interior. Tesla will invest in Mars in some way.


Sent from my iPhone using Tapatalk

SX will buy vehicles from Tesla, and it looks they'll do some work on starship. This is a good thing but it will have to be a straight up business to business deal with appropriate payment or it will get the hairy eyeball. There's not enough volume here to justify Tesla presence on Mars. It's the panels and batteries that do that.


Ohhh, I like the panels and batteries. Synergy can be more than marketing blather.

[OTV Booster]

Tesla could supply a mars robotic rover. Including autonomous navigation and integration of cameras etc for navigation. SpaceX would deliver it, including unloading, charging, and testing..... and a client such as a university, or a prospecting company, would buy or lease it. They would have provided or arranged the exploration instrument package, and lined up the operations team etc.
How many takers do you think? At what price? How many at $100M It depends on the size so an M3 is a bit too large to fit many in.
If Axiom for example considered working with SX in the future, they might lease one to prospect for future missions, or to generate publicity footage....
Business doesn't have to be fully sustainable.... Ideally they make a profit, but sometimes they just demonstrate possibilities for future operations. Science and exploration is a market too.
If Elon's wealth remains on a firm footing, he could pay for substantial initial exploration. However his smallsat launch/rideshare program, and Deer Moon indicate that there will be corresponding opportunities, and ways of including others, to CREATE a market.

This would be 'investing on' Mars but onesy, twosy compared to building a facility on Mars, which would be 'Investing in' Mars.


There will be short term need for research consortiums which, honestly speaking, will be non profit ventures paid for by somebody, probably on earth. Even long term this will be a good thing but not a firm footing for economic self support. Tourism would actually be a stronger building block being a clear cut exchange of market based value, but probably not a very large revenue stream.


A gigafactory on Mars building out power infrastructure is in a whole different league. Mr. Musk has deep pockets, hopefully deep enough to kickstart Mars but no individual has enough gelt to sustain a whole society. That can only be done through that capitalistic slight of hand called creating wealth. That's what industry does.

[OTV Booster]

...
IMO one of the key reasons why S&P has not (yet) listed Tesla is that the majority of it's profits currently come from regulatory credits (>half a billion dollars last year) and these are not seen as sustainable in the long term.

You can’t just split one revenue stream from the others and call it the source of all profits. It’s dishonest and silly. Also, I doubt that has anything to do with it.

If I'm looking at the financial health of a company and there is a revenue stream that is disportionate to what is normal in that industry, I will look at it closely, especially if that revenue stream does not come directly from sales.


If I find that the revenue from this stream is a significant portion of profits, I would be justified in forming the opinion that if all else stays constant, removing the revenue stream will drop profits significantly.


I'm getting into an area where my knowledge is limited, but I think that from the S&P's point of view, they want the stocks in their index to have limited volatility and the regulatory credits with their uncertain future, adds volatility.


I think we saw numbers a few days ago showing profits and credits and I think they were in the ballpark but don't remember the details." I can't go back to find it without loosing this post. I'll add an edit.


Edit:
https://www.google.com/amp/s/www.cnbc.com/amp/2020/07/23/teslas-sale-of-environmental-credits-help-drive-to-profitability.html
Second Q 2020
Credit: $428m
Net Profit: $104m


Worse than I thought. When Tesla hits anywhere near break even without the credits they'll probably be the darling of the S&P.

Sure, and if all other carmakers had to hit those targets by either actually making EVs or reducing ICE sales instead of paying Tesla, Tesla's competitiveness (by selling powertrains, etc) and profitability would be even higher. Same if you replaced those credits with a proper tax on the CO2 externalities. Or gave Tesla the same tax credits that foreign EV makers get.

I don't disagree but am trying to see it from the S&P perspective. Asking from ignorance: are any foreign electric car manufacturers on the S&P? And if they are, what is their credit:profit ratio? Again from ignorance: what does this look like for domestic car manufacturers in the S&P when using TOTAL sales.


I have every expectation of Tesla hitting a home run with new factories coming on line and the cost of batteries dropping to where electric is competitive with gas over the vehicle lifecycle. Maybe within a year or two. Or three. S&P has established criteria for inclusion in their index based on their own needs and that is their business, in every sense of the phrase. It really is their call.

[Robotbeat]

Personally, I don't find the non-inclusion a huge surprise as Tesla's stock is super volatile. But I think singling out credits is kind of silly.

[GregA]

Tesla selling stuff to SpaceX for them to use for colonizing Mars? Yes. Tesla investing $Millions or $Billions on a project that has limited ROI for investors? No.

Besides, Elon Musk has stated that he will use HIS money from Tesla to help colonize Mars, he has never said it would be Tesla money.

My comment here started with how Elon Musk could get HIS money from Tesla to help colonise Mars, without destroying the value of Tesla.

Let me talk conceptually just to make sure we're on the same page.

What is the difference in
a) Musk sells $2B in Tesla shares, gifts to SpaceX on condition they use the $2B for Mars, being $1B equipment bought from Tesla and $1B in flight costs.
b) Musk sells $2B in Tesla shares, gifts to Tesla on condition they use the $2B for Mars, being $1B to build equipment and paying $1B to SpaceX for the flights.

To me the legal implications (& choice of each company) seem very similar. I know SpaceX is privately owned but he'd still have to satisfy the other shareholders... but it's a gift neither would have to accept.

I don't understand why A is okay but B is not. I think Shareholders might perceive B more positively (he's selling $2B in shares but still fully engaged with Tesla) but that might not be true either.

Beyond that though, happy to argue about whether Tesla would otherwise have the slightest interest in Mars or the Moon.

[GregA]

This would be 'investing on' Mars but onesy, twosy compared to building a facility on Mars, which would be 'Investing in' Mars.

Musk has said Mars colonisation would involve lots of competitive companies. In several interviews he shows how much he likes the wild west analogy and expansion through America, and how competition drives humanity forward.

The problem being the people and companies need a railroad to get there.

He doesn't WANT to colonise alone, he wants to build the railroad that everyone will use).

(Sorry I know this is old stuff).

There will be short term need for research consortiums which, honestly speaking, will be non profit ventures paid for by somebody, probably on earth. Even long term this will be a good thing but not a firm footing for economic self support. Tourism would actually be a stronger building block being a clear cut exchange of market based value, but probably not a very large revenue stream.

It shouldn't be too hard for economies of scale to drop costs massively. A University should be able to put a small rover on Mars incredibly cheaply... and then pay one company to charge it, another for wireless connectivity to earth, another to retrieve it if it breaks down, and a human to work on it if needed. The person who repairs rovers might rent a home, perhaps Bigelow will make homes there, and could get takeout.

Since the University doesn't have to build in as many features, or redundancy (since a breakdown doesn't waste $100m dollars) it's not just cheaper to get there but cheaper to make their rover. As the community builds, the ability for anybody to dip a cautious toe in the water should get massively cheaper than any space mission has ever been.

Governments, non-profits and universities should pay for the primary funding, which will allow for-profit companies to setup shop to support them. And of course our mining companies might take a look.

It's not SpaceX buying rovers off Tesla though... SpaceX wants to build the railroad. And the question is whether the wild west analogy will work.

A gigafactory on Mars building out power infrastructure is in a whole different league. Mr. Musk has deep pockets, hopefully deep enough to kickstart Mars but no individual has enough gelt to sustain a whole society. That can only be done through that capitalistic slight of hand called creating wealth. That's what industry does.

Yes he can't create and sustain a whole society.

I think he's realised it'll take more than just building the railroad to get things started though... it needs a beach head, and maybe he'll have to build that somehow.

I mentioned gigafactories because I thought there was a connection in timing when he was talking loosely about a Mars base, and separately talking about a highly automated solar powered factory in an inhospitable environment that takes raw materials in one end and outputs batteries/solar panels/cars at the other end, it just seemed to fit well with what he wants to see on Mars. That doesn't mean Tesla will do it, but I think he sees potential. There is no market for Tesla products on Mars YET, but will there be, and will there be a first mover advantage.

(Of course, people watching a Mars colony start and seeing the Tesla name and Starlink etc will be rather good advertising too)

[M.E.T.]

This is getting too convoluted. Musk will take the Bezos approach. Selling a small percentage of his shares a year over a long period of time.

[GregA]

This is getting too convoluted. Musk will take the Bezos approach. Selling a small percentage of his shares a year over a long period of time.

I wonder if it’d be better to start a thread on Tesla-Mars for some of this. It’s probably enough separated from Musk to warrant it?


Sent from my iPhone using Tapatalk

[RedLineTrain]

This is getting too convoluted. Musk will take the Bezos approach. Selling a small percentage of his shares a year over a long period of time.

Or he will take a loan out on his shares.  It is more tax efficient this way and he can keep his voting power meanwhile.

Either way, not complicated and not much to discuss really.

[OTV Booster]

Personally, I don't find the non-inclusion a huge surprise as Tesla's stock is super volatile. But I think singling out credits is kind of silly.

The source of a lot of corporate volitility can be hard pin down firmly enough for anything more than arm waving. Companies like this are probably not on the S&P short list. The Tesla credits can be thought of as structural volitility with hard numbers. It's built in, so it's a red flag for S&P.


If Tesla can hit break even without the credits being figured it means that they are on a firm footing if the credits go away. If the credits stick around it's gravy. S&P likes gravy.


Dropping battery costs will be like high ISP, low thrust in that direction. Only a bit at the beginning but it adds up and lasts a long while. The new factories coming on line and getting through debug will be a big kick. Increasing production in current factories will be somewhere in between. S&P will list them.

[Coastal Ron]

Tesla selling stuff to SpaceX for them to use for colonizing Mars? Yes. Tesla investing $Millions or $Billions on a project that has limited ROI for investors? No.

Besides, Elon Musk has stated that he will use HIS money from Tesla to help colonize Mars, he has never said it would be Tesla money.

My comment here started with how Elon Musk could get HIS money from Tesla to help colonise Mars, without destroying the value of Tesla.

That starts with the assumption that Elon Musk selling his shares somehow destroys the value of Tesla, and I don't see how that is true.

It is true that investors do watch to see when and how much executives in companies are selling their company stock, but Elon Musk has been very public and transparent about why (and when) he would sell off Tesla stock. And if he does it in small chunks on a regular basis, like insiders are supposed to do, then investors should not be scared off by that.

Let me talk conceptually just to make sure we're on the same page.

What is the difference in
a) Musk sells $2B in Tesla shares, gifts to SpaceX on condition they use the $2B for Mars, being $1B equipment bought from Tesla and $1B in flight costs.
b) Musk sells $2B in Tesla shares, gifts to Tesla on condition they use the $2B for Mars, being $1B to build equipment and paying $1B to SpaceX for the flights.

To me "A" is illogical because Musk is already the major stockholder, and he is the CEO. SpaceX will have its part to play, but I don't think it should shoulder the entire colonization effort.

And "B" doesn't make sense since Tesla is a car and energy company, and they have no experience in aerospace or colonizing other planets. That is asking them to diverge from their areas of expertise, and when companies do that it can lead to their downfall.

What I think will happen is that Elon Musk will set up a nonprofit whose goal is to support Mars colonization. That allows him to take in not only his own money, but the money of others too (I know I would donate). And since there isn't a business model for colonizing new planets, treating Mars colonization like a humanitarian effort makes a lot of sense (i.e. saving humanity by making it multi-planetary).

That would be the cleanest, most transparent way for Elon Musk to transfer his wealth, and more importantly the wealth of others, into the Mars colonization effort.

[OTV Booster]

This would be 'investing on' Mars but onesy, twosy compared to building a facility on Mars, which would be 'Investing in' Mars.

Musk has said Mars colonisation would involve lots of competitive companies. In several interviews he shows how much he likes the wild west analogy and expansion through America, and how competition drives humanity forward.

The problem being the people and companies need a railroad to get there.

He doesn't WANT to colonise alone, he wants to build the railroad that everyone will use).

(Sorry I know this is old stuff).

There will be short term need for research consortiums which, honestly speaking, will be non profit ventures paid for by somebody, probably on earth. Even long term this will be a good thing but not a firm footing for economic self support. Tourism would actually be a stronger building block being a clear cut exchange of market based value, but probably not a very large revenue stream.

It shouldn't be too hard for economies of scale to drop costs massively. A University should be able to put a small rover on Mars incredibly cheaply... and then pay one company to charge it, another for wireless connectivity to earth, another to retrieve it if it breaks down, and a human to work on it if needed. The person who repairs rovers might rent a home, perhaps Bigelow will make homes there, and could get takeout.

Since the University doesn't have to build in as many features, or redundancy (since a breakdown doesn't waste $100m dollars) it's not just cheaper to get there but cheaper to make their rover. As the community builds, the ability for anybody to dip a cautious toe in the water should get massively cheaper than any space mission has ever been.

Governments, non-profits and universities should pay for the primary funding, which will allow for-profit companies to setup shop to support them. And of course our mining companies might take a look.

It's not SpaceX buying rovers off Tesla though... SpaceX wants to build the railroad. And the question is whether the wild west analogy will work.

A gigafactory on Mars building out power infrastructure is in a whole different league. Mr. Musk has deep pockets, hopefully deep enough to kickstart Mars but no individual has enough gelt to sustain a whole society. That can only be done through that capitalistic slight of hand called creating wealth. That's what industry does.

Yes he can't create and sustain a whole society.

I think he's realised it'll take more than just building the railroad to get things started though... it needs a beach head, and maybe he'll have to build that somehow.

I mentioned gigafactories because I thought there was a connection in timing when he was talking loosely about a Mars base, and separately talking about a highly automated solar powered factory in an inhospitable environment that takes raw materials in one end and outputs batteries/solar panels/cars at the other end, it just seemed to fit well with what he wants to see on Mars. That doesn't mean Tesla will do it, but I think he sees potential. There is no market for Tesla products on Mars YET, but will there be, and will there be a first mover advantage.

(Of course, people watching a Mars colony start and seeing the Tesla name and Starlink etc will be rather good advertising too)

Railroad analogy can only go so far, but even with its shortcomings it can be instructive.


The big difference between SS and the railroads is that the trains ran through habitible territory and they needed water replenishment while in this territory. The government provided right of way (they stole it but that's another thread) included alternating 10mi x 10mi blocks of land on either side.


Why this difference is still informative is because the railroads used this to build bulk markets for their services along with the station and watering resources they needed to operate. The New York to San Fran passenger and cargo trade was probably enough to justify the expense of building the system but what turned it into an economic powerhouse was the markets that emerged in that land grant.


Instead of running through the "Great American Stinking Desert" (to quote Firesign Theater) the railroads sold that land to farmers who shipped cash crop grain and received lumber, hardware and Sears Robucks catalogs. This is where the riches lay.


Your 100% right on about research support providing cash flow and supporting infrastructure development. This will be the 800lb gorilla of cash flow on the second mission. It will grow in absolute terms but at some point it will be dwarfed by other economic engines no matter how their finances are structured.


I think someone calculated it would take one to 1.5 starships to lift the mass of PV needed to make the fuel to return one SS to earth. Power is the throttle on all martian  development. It will be the budget line that everybody will fight over. A mars PV/battery factory could be the the lever that starts to pry mars away from the purse of earth. No amount of research support will ever be able to do this, even if transport costs drop to near nothing.


ISRU development, which implies production, will be the economic engine that will drive mars for a long time. Only when looking at a 100-200 year window can it be expected to provide everything Mars needs, which isn't necessarily a a goal worth reaching for. The difference between ISRU output feeding into the Mars economy and what Mars consumes will have to come from earth. It can be grants from the Musk Foundation, research support, tourism or sale of Mars bubbly water and pet rocks.


The more Mars produces (there's that word again) for its own use the less has to come from somebodies (Musk's) pocket on earth. BTW, this makes it less expensive for the research rover. No need to ship PV and batteries, we have them on hand and our research support techs will install them for you.

[Robotbeat]

Personally, I don't find the non-inclusion a huge surprise as Tesla's stock is super volatile. But I think singling out credits is kind of silly.

The source of a lot of corporate volitility can be hard pin down firmly enough for anything more than arm waving. Companies like this are probably not on the S&P short list. The Tesla credits can be thought of as structural volitility with hard numbers. It's built in, so it's a red flag for S&P.
...

There's no evidence that this is why the S&P has made their consideration. You're just making that up. Nice pet theory, but I think you're way over-blowing their significance.

I think the reason why TSLA perma-bear Twitter talks about them all the time is because the Federal EV tax credit has completely expired for Tesla but they seem to be doing just fine (even though their competitors mostly have access to them still). So they have to find SOME justification for why Tesla is doing well without just admitting Tesla makes good cars.... These regulatory credits have taken the place of the federal EV tax credits as an "excuse" for why electric cars are competitive.

[spacenut]

Railroads on Mars sound like a good idea.  All along the route solar panels could be installed, not only to power the trains, but to power local business and industry.  This could be mining operations, manufacturing  using raw materials, ice mining.  The list could be long.   

Searching for raw materials, other than ice mining for raw materials, would give support for railroads from landing sites settlements to mining sites settlements.  Trains could have not only batteries in the engine car, but under every car pulled for long distance travel. 

A train car engine could have removable wheels to be replaced with cross country wheels.  Like a modular travel unit.  This same unit could be made into excavators and other equipment for local use.  Train car unit could also be made modular for various trailer configurations, passenger, cargo, raw materials hauling, etc. 

Then again Hyperloop systems could aviod Martian dust. 

Mars colonization will be paid for by Starlink subscriptions.  Part going back into Starlink maintenance and replacement satellites, part going to fund Mars.  50 million subscribers at $50 a month is $2.5 billion per month.  Take half for maintenance and replacement satellites, you still have a billion a month to fund Mars.  Starlink will not only serve rural North America, but also Europe, and other parts of the world.  50 million subscribers may be only a minimum figure. 

[GregA]

That starts with the assumption that Elon Musk selling his shares somehow destroys the value of Tesla, and I don't see how that is true.

It is true that investors do watch to see when and how much executives in companies are selling their company stock, but Elon Musk has been very public and transparent about why (and when) he would sell off Tesla stock. And if he does it in small chunks on a regular basis, like insiders are supposed to do, then investors should not be scared off by that.

Oh I don't think Tesla's shareholders would leave because Musk is selling stock. They'd leave if they thought he was handing it over to someone else, putting his focus 90% on SpaceX or Mars. That's why he has such unseemly MASSIVE benefits linked to sticking with Tesla and growing Tesla.

Let me talk conceptually just to make sure we're on the same page.

What is the difference in
a) Musk sells $2B in Tesla shares, gifts to SpaceX on condition they use the $2B for Mars, being $1B equipment bought from Tesla and $1B in flight costs.
b) Musk sells $2B in Tesla shares, gifts to Tesla on condition they use the $2B for Mars, being $1B to build equipment and paying $1B to SpaceX for the flights.

To me "A" is illogical because Musk is already the major stockholder, and he is the CEO. SpaceX will have its part to play, but I don't think it should shoulder the entire colonization effort.

And yet he does plan on putting his cash in to kick start Mars. (But I think he realises it'll need more than a kick start now)

Also remembering my A and B were just conceptual to ask why you thought they were different... not what I thought he was planning per se. I'm still not sure on that

And "B" doesn't make sense since Tesla is a car and energy company, and they have no experience in aerospace or colonizing other planets. That is asking them to diverge from their areas of expertise, and when companies do that it can lead to their downfall.

In this conceptual example I gave, Tesla was making the same stuff for Mars in both options.

In any case, to be fair, nobody has experience in colonising other planets. Also it's not zero-G it's all on solid ground with 1/3G.. just without Earth's atmosphere (which I know is not a small thing!).

Tesla does have experience in batteries for Space, as well as generally the gigafactory. And solar panels, air filtering, AI etc.

"Shotwell’s claim that Tesla battery expertise is leveraged within the company’s Falcon 9 and Dragon vehicles confirms a much more direct level of interaction, hinting that hardware sharing routinely and systematically occurs between Tesla and SpaceX." May 2018
https://forcar-concepts.ch/tesla-news/tesla-batteries-powering-spacexs-falcon-9-and-dragon-capsule-reveals-shotwell/

(And so far the only cars that work without oxygen and without a driver are Teslas. )

What I think will happen is that Elon Musk will set up a nonprofit whose goal is to support Mars colonization. That allows him to take in not only his own money, but the money of others too (I know I would donate). And since there isn't a business model for colonizing new planets, treating Mars colonization like a humanitarian effort makes a lot of sense (i.e. saving humanity by making it multi-planetary).

That would be the cleanest, most transparent way for Elon Musk to transfer his wealth, and more importantly the wealth of others, into the Mars colonization effort.

I think that stretches his own dollar much further, it's a good idea.

But it's still this non-profit putting money into SpaceX or any other Mars company, with the same issues as him putting his personal money into SpaceX or any other Mars company.

Back to Tesla, I can no longer imagine Tesla not doing something on the Moon and Mars, because of what they already build and Tesla shareholder desire to keep Musk integral to Tesla.

[Coastal Ron]

That starts with the assumption that Elon Musk selling his shares somehow destroys the value of Tesla, and I don't see how that is true.

It is true that investors do watch to see when and how much executives in companies are selling their company stock, but Elon Musk has been very public and transparent about why (and when) he would sell off Tesla stock. And if he does it in small chunks on a regular basis, like insiders are supposed to do, then investors should not be scared off by that.

Oh I don't think Tesla's shareholders would leave because Musk is selling stock. They'd leave if they thought he was handing it over to someone else, putting his focus 90% on SpaceX or Mars. That's why he has such unseemly MASSIVE benefits linked to sticking with Tesla and growing Tesla.

Tim Cook of Apple is in the news today because it is reported he is focused on defining the next generation of leadership at Apple. He has been in charge for 10 years, but most of his senior management is likely too old to take over from him.

Elon Musk needs to be doing the same for Tesla. One of the indicators of a strong company is that they have deep management capabilities. When Steve Jobs first took a leave of absence from Apple, Apple continued. And when Steve Jobs resigned, Tim Cook was already a known entity. Not the same as Jobs, but as of today Apple is the most valuable company in the world, so obviously Tim Cook is doing something right.

Tesla needs the same from Elon Musk, that he put a management transition plan in place. And Musk knows this, and Musk knows that his ability to extract $Billions from Tesla is dependent on how well Tesla is doing. So I think Elon Musk will have an plan to gradually withdraw from the company - which if you think about it, he isn't a 100% full time CEO anyways. Never has been. He has always had SpaceX, and add onto that The Boring Company, Neuralink, Starlink and Starship, it is obvious that there are capable people at Tesla already.

So I'm thinking Elon Musk will have already pulled back from Tesla to some degree by the time he starts liquidating his shares to support Mars colonization efforts.

What I think will happen is that Elon Musk will set up a nonprofit whose goal is to support Mars colonization. That allows him to take in not only his own money, but the money of others too (I know I would donate)...

I think that stretches his own dollar much further, it's a good idea.

But it's still this non-profit putting money into SpaceX or any other Mars company, with the same issues as him putting his personal money into SpaceX or any other Mars company.

Not the same at all.

Tesla is a public company, and non-core activities get outsized attention. So if Tesla is doing something that will obviously lose money (like colonizing Mars) Tesla could suffer from that.

SpaceX is a private company, but it is capitalized by private investors. They have already outlined the value proposition for the investors, and making a change to that could damage their ability to raise additional funding in the future.

A non-profit entity is the cleanest solution, and it has numerous advantages.

Back to Tesla, I can no longer imagine Tesla not doing something on the Moon and Mars, because of what they already build and Tesla shareholder desire to keep Musk integral to Tesla.

Sure, they could set up a special division to produce space hardware. But it would be more like the government contractors I've worked for, where it is a small division that leverages the technology of the whole company. Such entities don't need investment, they just need contracts.

However those are hard to sustain when the work is not steady, and there are plenty of existing aerospace specialty companies that can already do the same - and they could just buy parts and technology from Tesla to incorporate into their own designs.

I'm not seeing a valid business reason for Tesla setting up a specialty space division. Not yet at least.