Elon didn’t follow the rules—he broke them down to rebuild them better.
Most people solve problems by tweaking what already exists, but Elon Musk approaches everything differently. He uses a mental framework called first principles thinking—a process that breaks problems down to their most basic truths and rebuilds solutions from the ground up. Instead of copying how things have always been done, he starts with “what is absolutely true?” and builds forward without inherited assumptions.
This way of thinking has fueled his massive success across multiple industries that most people wouldn’t even dare enter: electric cars, space travel, artificial intelligence, and tunneling. It’s not about being smarter than everyone else—it’s about seeing what others are too stuck in old models to notice. Here are 10 ways first principles thinking became Elon Musk’s secret weapon and helped him climb to the top of the world’s wealth ladder.
1. He reimagined battery costs instead of accepting industry prices.
When starting Tesla, most experts insisted that electric car batteries were simply too expensive to ever be viable, according to Paul Eisenstein at NBC News. Instead of accepting those costs, Musk broke down the components of a battery—lithium, cobalt, nickel, and aluminum—and asked how cheaply those raw materials could realistically be sourced and assembled.
By questioning the assumptions behind market prices, he helped slash the cost of battery packs dramatically. This allowed Tesla to make electric vehicles far more affordable, which pushed the entire EV industry forward while leaving competitors playing catch-up.
2. He challenged the aerospace model by building rockets from scratch.
The traditional way of building rockets involved bloated government contractors and astronomical costs. Instead of outsourcing like everyone else, Musk questioned every single piece of a rocket: materials, manufacturing, design, and logistics, as reported by James Clear.
By applying first principles, SpaceX built reusable rockets that dramatically lowered launch costs. What once cost hundreds of millions per launch now costs a fraction—and SpaceX dominates an industry once controlled by only a few massive players.
3. He refused to accept supply chain limitations as permanent obstacles.
During global supply chain disruptions, many companies simply slowed production or waited for normal operations to resume. Musk approached these issues like solvable engineering puzzles instead of immovable barriers, as stated by Grace Kay at Business Insider.
By redesigning parts, finding alternative suppliers, and rewriting software to work with available chips, Tesla kept production rolling while competitors sat idle. First principles allowed him to adapt in real time rather than becoming paralyzed by external events.
4. He rejected traditional car manufacturing methods to streamline production.
Instead of copying how legacy automakers build cars, Musk rethought factory design itself. He focused on vertical integration, automation, and advanced materials that reduced complexity and increased efficiency.
This approach allowed Tesla to scale production quickly while keeping costs under tighter control. By constantly tearing down and rebuilding the process, Tesla became more nimble and profitable than companies that had been building cars for a century.
5. He eliminated industry middlemen to control the customer experience.
Rather than relying on third-party dealerships like traditional automakers, Musk used first principles to ask: why do dealerships even exist? Tesla sells directly to consumers, eliminating commissions, markups, and sales pressures.
This not only saved customers money but allowed Tesla to control the buying experience, customer service, and data collection fully. It gave Tesla an edge in brand loyalty and margin control that competitors are still struggling to replicate.
6. He approached software as integral, not separate, from hardware.
Traditional carmakers treated software like an afterthought. Musk treated software as core to the Tesla experience—autonomous driving, over-the-air updates, and fully integrated systems.
By questioning the division between software and hardware, Tesla turned its vehicles into constantly improving platforms. This created recurring revenue streams and allowed Tesla owners to benefit from updates long after purchase, a model almost unheard of in the auto industry.
7. He questioned basic tunnel design to solve traffic problems.
Most people assumed that building tunnels meant huge, expensive, slow-moving drilling projects. Musk asked if tunnels really needed to be as large and complex as current systems required.
The Boring Company uses smaller tunnels, cheaper boring machines, and simplified engineering. This radically cuts costs and speeds up construction, offering a whole new way to think about urban transportation infrastructure.
8. He viewed failure as part of the design process, not something to avoid.
Most companies fear failure, but Musk sees it as a necessary step toward innovation. SpaceX has openly blown up rockets, Tesla has dealt with highly public setbacks, and Neuralink constantly revises its prototypes.
By treating failure as data instead of disaster, Musk accelerates learning curves that stop other companies in their tracks. First principles thinking demands that you test, observe, and adjust relentlessly until you find what actually works.
9. He ignores industry “experts” and listens to engineers and physics.
Musk doesn’t put much stock in experts who argue based on tradition. Instead, he surrounds himself with engineers and thinkers who break problems down into fundamental laws of physics, chemistry, and economics.
By filtering advice through first principles instead of conventional wisdom, Musk often sees possibilities others dismiss as unrealistic. This gives him a huge advantage when tackling complex, highly regulated industries.
10. He applies first principles across multiple industries simultaneously.
Most entrepreneurs focus on one field. Musk applies first principles thinking to cars, rockets, AI, batteries, brain-computer interfaces, and energy—all at once. He looks at every system as a puzzle that can be deconstructed and rebuilt smarter.
This ability to transfer first principles thinking across disciplines allows him to cross-pollinate ideas. A breakthrough in battery chemistry helps both Tesla and SpaceX. His companies feed off each other’s discoveries, compounding his advantage while others stay trapped inside their narrow silos.