How Smart Is Elon Musk? Time to Look Beyond His IQ

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Oct. 1 2021, Published 9:40 a.m. ET

Tesla CEO Elon Musk is a smart businessman, and quite rich too. Earlier in 2021, he surpassed Jeff Bezos to become the world’s richest person but soon fell from the position. Now, he’s back as the world’s richest person amid the rise in Tesla stock. How smart is Musk and what’s his IQ?

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First, Musk is one of the most popular business leaders in corporate America if not the most popular. He's among the most hated ones too. There's a big army of Musk fans and he has a cult-like following. Then there are Musk bashers who are an equally vocal community.

Elon Musk's IQ

Now, looking at the technicals and number crunching, Musk’s IQ is estimated at 155. A score of above 130 signals a high IQ, which shows that he's smart. Should we really be looking at these numbers though? Musk is smart and that's reflected in his ever-rising net worth. Also, apart from Tesla, he has created several companies. Let’s look at several other aspects of Musk’s life that show how smart he is.

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Musk is flexible.

Smart people are flexible and not rigid. Musk has changed his views on several aspects over time. Whether it was leaving Trump’s team over the Paris Climate deal or quickly changing his views on a stock sale, Musk has shown that he's a maverick.

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In 2020, Tesla went on a capital raising spree and the process started within days of Musk saying that the company didn't need to raise cash. But as a smart businessman, Musk capitalized on the spike in Tesla stock to build a war chest.

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Musk and Dogecoin

Musk has been among the biggest backers of Dogecoin. Despite his public support and a Twitter poll where respondents supported Dogecoin acceptance overwhelmingly, Musk hasn’t accepted Dogecoin as payment for Tesla yet. Musk knows what havoc the volatile meme cryptocurrency can play with Tesla’s earnings, so he probably won't accept the meme cryptocurrency for Tesla payments.

Musk has been using his Twitter antics wisely, among others, to pump Dogecoin. Currently, Musk has over 60 million followers. A lot of his followers are future buyers of Tesla products.

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Tesla is an example of “fake it till you make it.”

Critics see Tesla as a perfect example of “fake it till you make it.” Some critics have even been suggesting that struggling start-up EV (electric vehicle) companies should work on a similar model and announce “futuristic” products that will boost their valuations.

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To Musk's credit, he has managed to build Tesla as a formidable force to be reckoned with. The company sold almost half a million cars in 2020, which isn't any small achievement. Musk has positioned himself perfectly as a mascot of electric cars and renewable energy.

Bailing out SolarCity, which was a struggling company owned by his cousins, was another smart move from Musk. Tesla has been defending the acquisition, and Musk famously said that eventually, the solar business would be equal to the automotive business. However, the fact remains that solar operations haven’t done as well as expected. Also, 2019 wasn't the “year of solar roof” like Musk touted.

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Musk has been selling dreams (or sort of)

Musk is a genius at selling the future. To justify Tesla’s valuations, he used the examples of robotaxis and autonomous driving and how their revenues and high profitability would justify a $1 trillion valuation. However, robotaxis haven’t yet seen the light of the day even though Musk said that there would be 1 million of them by mid-2020.

Autonomous driving or the FSD (full-self driving) is another reflection of Musk’s smartness. While regulators find the name “full-self driving” misleading, (which it is at least for now), the name’s choice was a smart move from Tesla.

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To his credit, Musk was smart enough to realize the potential of electric cars even as legacy automakers scoffed at the idea. Legacy automakers were happy buying carbon credits from Tesla instead of selling loss-making electric cars.

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Now, every automaker sees electric cars as the future. However, they're somewhat late to the party. Most automakers have been playing catch up to Tesla, which has established itself as a gold standard in electric cars.

Musk, Twitter, and marketing

On his Twitter account, Musk often mocks ICE (internal combustion engine) cars and builds a case for electric vehicles. When bashing ICE cars, Musk is marketing Tesla, which is synonymous with electric cars.

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Musk is actually a marketing genius even though some people think that he isn't good at publicity, citing the Cybertruck launch. However, he's much smarter at marketing Tesla products than most of the marketing guys out there.

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Musk knows his worth

One of the traits of a smart person is that they know their worth and importance. Musk managed to get permission to set up solo operations in China. Tesla became the first automaker to do so. In 2020, Musk used threats to get the Fremont plant opened.

Musk’s genius and smartness are reflected in Tesla’s valuation. If Tesla wasn’t led by Musk, its market cap would have been a fraction of what it is. If you want to put a dollar value to Musk’s smartness, it would be over half of Tesla’s current market cap of $767 billion. The many other companies that Musk has founded also highlight his smartness.

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