I have just
finished Walter Isaacson’s biography of Elon Musk and came away with mixed
emotions — awe at what one man has achieved in a lifetime and some horror at
the person he appears to have had to become to achieve it.
Musk is only a
few months older than me. That makes the reading uncomfortable.
Isaacson portrays
a man of extraordinary imagination, risk tolerance and focus, but also one who
can be abrasive, insensitive and brutally demanding. Employees, friends and
even family can become collateral damage to the mission.
No candidate for
beatification here.
Isaacson, who
also wrote the excellent biography of Steve Jobs, has a rare ability to get
behind the caricature served up by the media and ferret out what drives his
subjects. Yet despite the book running to hundreds of pages, I finished it
feeling he had only scratched the surface of Musk’s complicated personality and
even more audacious vision.
Tesla was the announcement
SpaceX can only
be described in superlatives. Reusable rockets have changed the economics of
going into space.
But for me Tesla
is what announced Musk to the world as a bona fide genius.
Starting a new
automobile company is close to madness. Cars require huge amounts of capital,
complicated supply chains, technology, distribution networks and consumer
trust.
Tesla did not
merely survive.
It made electric
cars desirable and forced virtually every major car manufacturer to rethink its
future. Then it pushed into batteries, software and autonomous driving. I
cannot wait to own a genuinely self-driving car — Tesla or otherwise.
And then came the
ultimate capitalist validation: the market.
Investors valued
Tesla above several of the world’s largest traditional car manufacturers
combined.
You can argue
they are wrong. You can argue Tesla is overvalued.
But they are
putting their own money behind that judgement.
For us
free-market adherents, that is the holy grail.
Yes, government helped
Tesla’s rise was
not a pure free-market fairy tale.
It benefited from
government support, including a $465 million US government loan, which it
repaid early. America also protects its industries; Chinese EVs face punitive
tariffs in the US market.
So yes,
protectionism and state support are part of the story.
But there is an
important distinction.
At its best,
state support helps a company become strong enough to compete globally. It does
not permanently shield it from competition...
You can provide
finance, infrastructure, research support and even temporary protection.
But eventually
the company must leave the nursery and fight.
The export market
is brutal.
That brutality is
useful.
Then came BYD
Some will say it
is unfair to compare Uganda’s Kiira Motors with Tesla.
I think the
opposite.
Who exactly are
we supposed to compare it with?
When Kiira sells
a bus in Nairobi, Lagos, Dar es Salaam or Johannesburg, the buyer will not
lower his expectations because Uganda is a developing country.
He will compare
price, reliability, range, financing, technology and after-sales service
against every available alternative.
And increasingly
that means China.
In fact Tesla may
now be the kinder comparison. BYD sold more fully electric vehicles than Tesla
in 2025 and is also a major global electric-bus manufacturer.
That is the
market Kiira Motors is entering.
Like it or not,
Tesla and BYD are the competition.
The import-substitution trap
This is also why
I have always been suspicious of import substitution.
There is nothing
wrong with producing at home what we currently import. The problem starts when
import substitution becomes a policy for protecting companies from competition
rather than preparing them for it...
Then the
incentives turn upside down.
Instead of
becoming more efficient, the company learns to lobby government. Instead of
improving its product, it seeks tariffs, tax breaks, procurement preferences
and protection from foreign competitors.
That is how
cronies are created.
And once
protected firms are guaranteed a market, innovation suffers. Why improve
quality or lower prices when the customer has nowhere else to go?
The taxpayer
becomes a double loser.
First, billions
of shillings can disappear into enterprises that never become commercially
viable.
Then the same
taxpayer, now acting as a consumer, pays again through higher prices, poorer
quality or inferior services because competition has been suppressed...
Export-led growth
imposes a much healthier discipline.
The Kenyan,
Nigerian or South African buyer does not care who your minister is. He does not
care how patriotic your industrial policy sounds.
He wants value.
Politicians love inputs
This brings us
back to Kiira Motors.
Politicians love
inputs.
We allocated
billions. We built a factory. We installed a production line. We trained
engineers. We made a bus.
Cut ribbon. Take
photographs. Mission accomplished.
Except business
does not work like that.
The private
sector is judged by outputs and outcomes because the market is an unforgiving
auditor.
How many buses
did you make? How many did you sell? At what margin? Did customers return? Can
you export? Can you finance the next production cycle from revenues rather than
another government appropriation?
The issue is not
whether Ugandans can build buses.
Obviously we can.
The issue is
whether we can build buses that strangers will buy with their own money.
That is a
completely different test.
If Kiira can sell
hundreds and eventually thousands of buses across Africa against BYD and other
manufacturers, government should back it enthusiastically.
But if after
hundreds of billions of shillings we are still mainly celebrating factories,
prototypes and government procurement, we should ask whether that capital might
produce higher returns elsewhere.
Musk’s story
reinforced something very simple.
Capitalism does
not care about good intentions.
Eventually
somebody who does not have to buy your product must reach into his pocket and
pay for it.
Tesla passed that
test.
BYD has passed it
on an even larger scale.
Kiira Motors must
too.
