4.7.09 Uber Entrepreneur: An Evening with Elon Musk

hello everyone welcome my name is karen tucker i'm ceo and board member of the churchill club and tonight we present an evening with elon musk in conversation with michael malone elon and mike thank you very much for being here with us tonight and i would also like to thank microsoft for hosting this program this evening before we get started let me mention some of our upcoming events first on tuesday april 21st it's virtualization what's next six leading experts will talk about trends and the next generation of this hot technology area and then next on thursday april 23rd we present a woman a women tech executive roundtable what's top of mind in 2009 with an all-star cast including cheryl sandberg from facebook from facebook and on april 27th we have a program about executive leadership style and its effect on business performance the panel will include bill campbell chairman of intuit and others you can look for that on churchill club.org this week and on may 7 it's our 2009 cio agenda including the cios of home depot baxter among others of an incredible group should be an interesting program this too will post on the website this week and last but not least it is our uh most anticipated program of the year the top 10 tech trends event on wednesday may 20 and this year we have vinod khosla rahm shahram steve jervidson and joe schoendorff will be making their predictions with high audience participation and so if you haven't yet made your reservation please be sure to do that just a note about the club for over 23 years the churchill club has been the leading forum for the bay area business and technology community presenting what's new what's next what matters most we are a non-profit member supported group and so if you are not a member and you enjoy tonight's program we hope that you will consider joining us and we make it easy for you to do so simply just visit churchillclub.org and go through the steps now i'm pleased to introduce our moderator michael malone mike has had a most impressive career having covered silicon valley and high tech for more than 25 years he has written for the wall street journal the economist fortune the new york times forbes asap and earlier the san jose mercury news he wrote or co-wrote a dozen books he hosted three public television interview programs a series and most recently he co-pro he co-produced a pbs mini series called the new heroes about social entrepreneurs when i asked mike for something about him that doesn't appear in his bio he admitted that he was nearly expelled from santa clara university because he he used a certain obscenity i believe he said it contained 12 letters in his school paper column i'm sure that wasn't the the first time that mike stirred things up and i trust that it will not be the last either so let's give a warm welcome to respected journalist and author mike malone good evening everybody looks like we have a pretty full house i recognize a lot of faces and i promise not to try not to use that uh that 12-letter word tonight elon might but i'll try not to i hope all of you had a chance to take a look at the the tesla roadster sitting out there in the parking lot it was the one behind the orange cones that look very different from all the rest of the cars out there if you didn't get a chance try to beat elon out of here tonight and go take a look at or at least watch them tear out of the parking lot silently so allow me to do an introduction sir we've known each other a long time yeah you know churchill club has 12 letters oh yes it is oh my goodness i was just thinking it was 20 it's hard to leave it was 28 years ago that rich carl garden tony perkins showed me a plan for this and it was about this just a few years before i was shown the plan for ebay and in both cases i said i just don't think it's going to work it's crazy no it's just crazy so let me introduce you 37 year old elon musk was born and raised in south africa but left home at age 17 to make his way in the world living on as little as one dollar per day he eventually made his way to the wharton school at the university of pennsylvania where he earned bachelor's degrees in economics and physics musk then attended stanford's graduate program in high energy physics where he lasted exactly two days before dropping out to form a company with his brother that company zip2 was sold for 300 million dollars musk then founded x.com an online financial services company it eventually became paypal of which elon was the largest shareholder paypal as we all know was purchased by ebay for 1.5 billion dollars in 2002. when he graduated from wharton elon determined the three important areas where he wanted to make a contribution was the internet clean energy and space and with paypal tesla motors spacex and solar city he has done just that and in the process made himself one of the most celebrated entrepreneurs on the planet ladies and gentlemen elon musk thanks so let's begin with the topic of greatest interest to the audience here tonight i assume uh tesla motors okay where's the company at right now where do orders stand oh mike i don't know what to tell you it's it's been rough uh no i'm just kidding it's it's actually um it's actually been it's been pretty good um in fact it really quite a contrast to the rest of the water business we're sold out first of all for the tesla roads to the sports car we're sold out through the end of october um and within it i think probably within two or three months will be actually sold out of all 2009 production for the roadster um so is this for the standard roadster or the or the advanced version well we are we do have a roadster sport coming out which is a you know for those for whom the road says the roast isn't fast enough right um there's the roadster sport yeah how fast is that one now uh that that'll do zero to 16 3.7 seconds so it's faster than almost any any it's like an icbm laid over on its side uh yeah it's it's it's ridiculously fast now how are the orders for that uh good actually i you know i haven't looked at the latest orders for roadster sport and people actually have an opportunity to upgrade their car through it's the sport that are getting their car after i think uh late june or july and what we're finding is a lot of people are choosing to upgrade their car to the sport uh package um so i actually don't have an exact number for you but anecdotally it seems to be doing very well now the roaster is 109 000. is that right yeah and then there's actually sports 139 000. yeah right um well the the price to to customers is actually uh in terms of a comparison price that that's relevant for comparing it to a porsche or something like that is actually about 98 000 and and the reason for that is if you buy an electric car you get a 7500 federal tax rebate even if you're even if you're an amt it applies to everyone okay and then uh you don't pay the gas guzzler uh tax which is somewhere in the order of three thousand dollars um so effectively you know your thousand dollar discount yeah you're roughly 10 and depends on which car you compare it against because the guest cause of text does vary uh but it's somewhere between a a nine to twelve thousand dollar discount and uh relative to a gasoline sports car so in effect you're talking about a car that's just under a hundred thousand dollars as a base price and then um the sport package is another twenty thousand dollars on top of that um and that's equivalent to like going from like a you know a 911 to a 911 turbo or something you know that that kind of thing now if i were to order one right now if anybody in the audience wants to order one right now raise your hands i will take orders if somebody out here were to order one right now what would it take what's the deposit and what's the delivery date um so we're actually reducing our uh our deposit requirements on the roadster and previously uh we'd use the the deposits to provide funding for for the company and that was an acknowledged thing we said look we car companies are very capital intensive so in order to make this uh you know doable or more doable we're we're gonna take deposits they'll be at risk people should recognize that and then the the advantages that they get one of the postcards uh and we actually got a lot of people who signed up to that um but we don't really need that anymore um so we're actually gonna reduce the the deposit down to make ninety nine hundred dollars and then you pay the balance uh just at start of production which is a couple months prior to delivery now did you find any impact on the orders because with the falling gas prices and we saw what happened with the prius i mean you can go to slimevale and entire supermarket parking lots are filled with unsold priuses did that affect you guys at all you know i don't think that was a huge impact um because most people aren't buying the 100 000 sports car because of right you know to save money on gas um it's it's more geek love than it is uh cheap gas yeah i was more worried about what how that would affect sales for our sedan um you know which we just unveiled a few weeks ago we'll talk about that in a moment but yeah yeah um and uh but it i don't think that's been a key impact on on roadster sales i think certainly the economy as a whole and the um the implosion of people's net worth has had an effect on on new roads to sales and we're fortunate that we do have a significant backlog you know going out six months but um i wouldn't say gas prices have had a big effect on the roadster now being in the car business you have to be asked are you taking any federal money you know um and are you worried about your job security if you are uh well you know i i don't have to worry about my compensation my compensation currently is a dollar so i'd be happy to cut that in half for the federal government uh if they do uh give us a loan but actually we've taken no no government money at all thus far um if some people out there think we we have and we haven't now we do aspire to get a a government loan for under the what's called the atvm program it's the advanced technology vehicle manufacturing program that's from the doa that's from the voe it's not bailout money and and it was this was this program was done before there was uh in the need for valve money that the legislation was written about about 18 started started writing it about 18 months ago and it got it finally got approved by congress um last year sometime i think like late last year so uh and this is before a vomit so this isn't stimulus money this isn't bailout money this is actually um something that originated in the senate uh energy uh committee because they they felt was a matter of national security for uh and environmental obviously environmentally important for the united states to to accelerate its transition away from from from oil uh for all the obvious reasons that uh the you know it's it's damaging yeah it's obviously very damaging to the environment um and uh as gas prices rise if you know because as they will dramatically uh when we come back to another boom there's going to be a massive wealth transfer out of the united states right uh to to other countries and it's just it's just it's just kind of silly you know for that why why it's cheaper for us to just accelerate the move with oil now i'm not going to ask you how much you plan to get from the government or when because i think you said that publicly once and got in trouble didn't you i did get in trouble um i just said what they told me and they didn't say keep it quiet so um but i suffice to say we are highly optimistic that we will receive um approval loan approval um in in the near term okay let's talk about the factory that was uh there was an awful lot of news a few months ago groundbreaking ceremonies a big assembly plant going to be out there on 237 in san jose yeah now it seems to be on hold and something about financing delayed or you couldn't you didn't qualify for it or what happened yeah so the san jose um uh the idea of using the sort of the the undeveloped land of the 237 in san jose uh occurred before the the section 136 or the atvm loan program was approved by congress so um and one of the clauses in that atvm loan program is that you have to uh it gives preference to um manufacturing facilities older than 20 years which was actually so it's sort of a quasi buy american clause because the the the foreign car companies that are factories here almost all their factories are younger than 20 years um so it's it's it's essentially to buy us the cash towards american companies that that that clause has put in but nonetheless it's there which means we can't do green field so um well i assume there's going to be a lot of empty buildings in dearborn soon does that where you plan on going um no we'll most likely be in southern california we actually have term sheets from two locations in southern california um we looked first in the bay area um i'd love to take over newmie that'd be awesome yeah um uh i don't know if there's maybe at some point we'll we'll have an opportunity to acquire nume um uh that would be that'd be great um i'll take that in a second um but but that isn't available right now and i don't think we we can't afford it really unless they give it to us um which maybe they will i don't know so where are the cars being manufactured right now uk and lotus uh actually the roadsters uh it's considered a us manufactured car the final assembly occurs in in the bay area and menlo park of all places well-known auto center right uh well bear in mind we're talking low production for the roadster so this is a production rate of around about 25 a week um that might rise to 30 a week in the summer so it's not it's not i mean when you sort of add that up that's five cars a day i mean that's like your average service center can do a lot more than that uh and and uh so we install the powertrain in in menlo park we do final vehicle verification we do the high tests uh out at moffett airfield um and um yeah and that's and then we may picture the power that the battery pack in st carlos so it's by value talking about something mostly done here where do you do the tests at moffitt on the airfield on the runway yeah has any have you ever seen a a tesla racing down the runway in moffett field do you guys like to do it three o'clock in the morning no there's hardly any traffic on market nowadays true um let's talk about the new car the the s tell me about it all right um this is this is a this really is a great car i mean the roadster is a good car i think the s is a great car um and and i think it's something that will um it's really quite historic or at least it aspires to be um in that this will be the first mass-produced highway cable uh electric car and that's nev there's never this may sound strange but there's actually never been a mass-produced electric car outside of golf carts um and uh is it the first non-internal combustion mass-produced car since the stanley steemer yeah it might be wow okay um so yeah i mean there's been hand built things and conversions of gasoline cars and stuff like that but but not an actual mass-produced electric car so you know of course we have to mass produce it for that to be true um uh so that's why i say it aspires to be this is this aspiration is that um and but if we fulfill that aspiration then it will be very historic and this is a car really designed to take full advantage of an electric powertrain so the packaging is very optimized for that the battery pack is in the floor pan between the two axles so it's this big sort of flat battery pack looks a lot like a giant laptop battery pack um in fact user's laptop sells i was going to say is it is is it still a just a ton of laptop batteries well it's half a ton of leftovers half a ton of laptop batteries strapped together yeah now that's tricky by the way so really so advanced strapping is tricky yeah i bet yeah so so you need a lot of micro you need a lot of processors right to manage all that yeah uh i think they're like 30 or 32 processors or something on board a lot of them are like little tiny ones so you must go to every night praying for breakthroughs and battery technology so you don't have to deal with this um no you know it's not too bad actually having a lot lots of little cells i mean we keep believing what that that is the the highest energy density pack that you can make is to use a large number of laptop cells and we we keep um pushing on the cell manufacturers and technically by the way a battery is a collection of cells and and the cell if it's just one it's a cell and if it's two it's a battery um so uh so so the cell produ and the cell is a chemical engineering problem the battery the pack the battery is uh is actually a mechanical engineering electrical engineering and software engineering problem um so there are different types of you know expertise needed to do to do that and in fact there are many makers of cells but there's only one maker of large lithium ion battery packs and that's tesla um so uh of course there will be others in the future and that's why daimler came to us uh to make the the battery pack for the new electric smart right now you know something i've never asked you my laptop just about sets my pants on fire how do you keep all of those from just cooking that car are you are you sitting on your laptop i don't even watch but that's part of the problem i think about a half a ton of laptop batteries um yeah um well look what's the worst that could happen i mean we do extensive safety testing um i mean i shouldn't laugh this is a serious subject um the uh so i'll break it down okay so we start off at the cell level we use only the finest cells corinthians currently finest cells each one gently observed and carefully prepared um we use we we do actually use the ice quality cells which which come from japan um they're um they're they're carefully verified by the manufacturer then when we receive them we we check each cell um we uh in addition to the fuse that's that's built into the cell from the manufacturer we we double fuse the cell so it's triple fused in total at the cell level um then the cells incorporate into modules the modules um are designed to ensure that there's passive propagation resistance between the cells so that what that means is um even if uh all active safety systems fail and a cell goes into what's called thermal thermal runaway it it that energy is contained and it does not spread to any neighboring cells so this involves insulating the cells making sure you've got a thermal conduction path to get rid of the heat so it you so you don't essentially have a chain reaction so that that's quite tricky um and and then uh but but we also never want to get that to to even losing a single cell right so we have an active cooling system uh which is so the battery pack is liquid cooled um and and that that also is a tricky problem because you need to be thermally conductive but electrically isolated yeah um and moreover you need that needs to be true over a hundred thousand plus miles of bumpy bumpy problems in real life cars yeah real life cars real life cars are it is a hard it's hard to make things last for a hundred thousand miles and you know ten years and that kind of thing so you you if you hit potholes and you get so you got you know it's getting sharp you know road shocks from the road uh it's getting vibrations going through extremes of temperature it gets into an accident and all these circumstances you cannot have uh the pack uh catch on fire right um very hard problem and and then also it it must be you must be able to make the pack inexpensively uh it's got to be password regulatory uh requirements um you've got to preserve the pack uh so that you maximize the calendar and cycle life of the the chemistry within the cells um charging to deal with the dot and the doe yeah any branches a lot of departments yeah tell me more i don't want to go into too much my new shape tell me more about the car yeah sorry you know i shouldn't i should i should have said talk yeah i'll give you a sales pitch on the model s okay so um this is a car that has a range of up to 300 miles um it seats uh up to seven people that's five adults plus two kids and the way we get the two kids is it's kind of like the old station wagons we have two rear-facing kit seats in the back um that's an option that you can you can order i remember those days yeah i mean you know it's not great being in the back being in the back but i guess it could be kind of fun if you're a kid and you can sort of watch all the other cars and stuff um and and most people you know when you put seven people in a car it's almost never seven adults and it's only occasionally rarely is it seven people um so we're trying to make something that could substitute for your suv uh so you don't have to have cart this gigantic seven passenger suv all over the place it will be five star crash rated and that that's a very hard thing to achieve in fact today's five star will will reduce to a three star in two years right they keep moving the bar yeah they keep raising the bar on on to what's necessary to achieve a five star some people might think oh i've got a five star day it'll be like a five star in two years no that's like a three star in two years i mean you basically have to be you know a sherman tank uh level safety to get to five stars we will be at five stars i'll have my own kids in the car we're not going to make something that's legitimate yeah we fully occupied in the car um and um and and so the the challenge then is to make it make it super safe but not super heavy um so it is quite a difficult mechanical engineering problem and mass optimization problem um and uh and actually arguably it will be safer than an suv because it'll have such a low center of gravity uh because the battery pack is in the floor pan um that you're not going to have the tip over risk it's going to stay on the ground yeah so i mean if you because if you're going on like some mountain path or something and you go off the side i mean it doesn't matter how many airbags you got you know right um your your toast so you want to make sure you don't have tip over risk and then that that certain on tip overs you'd actually win against an suv and uh tell me about the ergonomics i hear you have some innovations on the dashboard absolutely so for the interior uh approach um you can think of it like like a giant iphone okay that's the center console imagine a 17 inch diameter iphone um and that's the basic thought there and 3g wireless connected uh yeah absolutely in fact so it'll have your controls your standard controls for uh stereo hvac but it's also going to be able to do connect to the internet so you want to do pandora radio if you want to do youtube whatever you want to do it'll have a browser this is just linux linux running up running running a browser so if you want to look at your email not while you're not driving and in fact there's some sort of interesting ideas who thought about well like maybe you could have it uh read out your email to you while you're driving um and um you know do voice commands on on the computer and so and nice to allow people to develop applications uh that that could run on on the computer because it's a full-fledged computer it's not some sort of dumbed-down car car thing um and um and also you should be able to theme the the display so it's a 17-inch display in front and it's about inch display in front of you so it's user modified display yeah yeah so there's a read-only display right in front of you and then a big 17-inch touchscreen on in the center console and uh you know you can theme your cell phone you know and and customize it to your interests and and uh and needs well why can't you do that with a car you should be able to you know it seems like a reasonable thing so if you want to see different instruments on the front like you care about seeing this readout that readout you want it to sort of look have a heavy metal look you want to you know want it to look like country and western whatever you know make it more feel like it's more your car not just something that rolled off an assembly line so you could have the dashboard of a 67 gto yeah if you look like steam gauges if you want yeah yeah absolutely uh so this is your this is your five series killer you know we're not going to kill we're 20 we're looking at 20 000 units a year so we're not going to kill anything right and and we'll we'll impinge on the market share on of several cars out there lexus mercedes bmw uh you know audi um but but really it'll be a small i mean a highly noticeable impact on on total i mean you know this well at least there were 17 million dollars 17 million cars sold in the u.s a year i think it's not about you know not much like 99 million cars a year kind of run rate so uh if we even even at nine even at my nine million costs yeah yeah and that twenty thousand is ten thousand domestic ten thousand international so we're talking you know 0.01 percent of the car market okay so give me some performance give me some performance specs on this thing price starting price forty nine thousand nine hundred forty nine thousand nine hundred um well yeah okay and uh gosh that's less than 50. yes that's right it is that's right only 50 grand that that's half the price it is it is selling the price yes that's quite impressive thanks and now that is after there's a 7500 we have that federal tax debate that's after the 7500 although i haven't taken into account the gas guzzle attack so in effect for an apples to apples comparison would be a little bit less than that maybe 47 000 or something like that and you said distance was on a charge um it can go up to 300 miles but now the the the 49 901 will do 160 miles okay um it's but that there will be a 300 mile range pack available um and uh one of the things you're thinking of doing is is perhaps making that's something you can rent so if you can if you can't afford the more expensive 300 mile range pack or don't want it then that's fine get the 160 ml pack rent the bigger one when you need it some other ways we've addressed the range issue is a 45 minute fast charge capability which is about the limit of the battery chemistry and then designing the battery pack such that it can be switched out faster than you can fill a gas tank um which in principle you think about it i mean this is this is basically a big laptop on wheels and if you can switch out your your laptop battery you know in 30 seconds well why can't you do that with a big one you just need something that can simulate a head scale two little clips and that 500 pound battery pack falls out yes that's something you can do by hand right but you so you need you do need special equipment at sort of a battery pack swap station um uh and there's you know companies out there that are looking to to to to do swap stations and i want you to talk about one of your your solar company weren't you talking about having solar panels that people could put on like the roof of their house yeah and do home charging for a quick 75 miles or whatever it was well um the the most efficient thing to do is to actually put solar panels on the roof your house and and just have them try basically power your house uh particularly during the day because during the day is when you you encounter peak load right and they have to put the least efficient power stations online uh during the day um and uh and then at night that at night it's actually better to charge your car at night um so it's better to like decouple it effectively so if you wanna if you wanna be um truly green then you just need to say okay well i'm gonna generate more uh energy by a solar that i consume in my car um although the model s will have so as a solar panel option so you can put solar panels on the on the roof of the car itself on the car itself okay um yeah and and there's some interesting ideas to potentially have solar solar car ports um and um if you want to get some some really sort of crazier ideas are like try to coat the whole car uh with some sort of amorphous uh photovoltaic coating and and you know have the whole thing be a big solar panel yeah yeah now there was talk for a while and i guess you've abandoned it of even putting a gasoline engine in yes is that is that gone it is gone we looked closely at the whole plug-in hybrid thing and um you know i guess about a a week ago or so there was a guy who who um asked me some asked me send me an email he's like he he runs like a bolt side or gm bolt side or something he's not he's not working for jim but um he just said you know so why didn't why isn't tesla doing doing the range extended electric vehicle approach the plug-in hybrid thing um and i just sort of gave him kind of a matter of fact this is why we chose the strategy of one another and then you know it's all over the place like i'm trashing the vault i'm not trashing the ball i hope the vault is successful um and i've said so many times but i have to i'm just explaining why why did we not do that so i'll explain here i mean basically um uh what it comes down to is uh it's a technical point um because we had to sort of drill into it to quite deeply to appreciate why why it wouldn't be ideal in our opinion to have a plug-in hybrid if you go from say if you consider a 200-mile range pack versus say a 40-mile range pack it sounds like you've got you you have a pack that is one-fifth the size right for the 40-mile pack but that's actually not true so because what happens is the 40-mile pack has to generate particularly if it's a range extended electric so you're not you know it's a the 40 mile pack has to generate five times the power right um well technically you could have the the motor running and so it might maybe it only has to generate two and a half times the power but then you're you're running both simultaneously and that you're not really being electric if you're doing that so if you just consider the pure electric case you've got to generate five times the power but the way it works in battery chemistry is that power and energy work work at work at opposites you can either have a high power pack or a high energy pack energy is total mileage power is the rate of which you can take uh you know the rate which you can consume that energy and uh so in effect you then push to a low energy density chemistry in a plug-in hybrid case um and because you're hitting the pack so hard so it's doing it's working so much harder than the bigger the bigger pack um that you have to de-rate the pack derate the energy content so so you end up with something which is close to half the size maybe eight maybe 40 40 to 50 percent of the size of the 200 mile pack so so yeah so and then you've got to add in the cost the cost and weight of the uh the engine the generator all the cross connects between the two uh you've got a factory in the that there's servicing of two complete drivetrains you still have to deal with all the epa stuff for emissions um and and then when you when you've consumed your 40 miles um which we'll do reasonably for not every day but maybe every set every may call every third day um you you're then gonna have something which is massive an engine which is super really underpowered right um it's going to stop this heavy car down yeah it's going like it's going to feel like i've got a lawn mower engine trying to power my sedan um and it's so it's going to be running at very high rpm it's going to be working really really hard uh it's not gonna make that hundred thousand miles it's gonna be tough yeah um and so so you really it's gonna feel very anemic um on the highway and uh uh so it's just it's it's it's problematic um you're neither fish nor foul and a sense reason that if you've got a given mass and cost and you say to an engineer make the best electric car for for a fixed massive cost or you say engineer make the best gasoline car big smashing cost it's going to be a better gasoline car or a better electric car than if you split the baby so you're not trashing hybrids but you just did a pretty good job of trashing hybrids well i i i could be wrong you know um i'm just saying that's the reasoning that that caused us to right to focus uh on electrics and continue the focus on electrics um let me ask you a silicon valley question yeah uh you're vice chairman and for a long time the ceo of the firm is a name out of silicon the silicon valley past zev drury a guy that we haven't seen around here for 30 years who ran monolithic memories right way back when uh kind of a legendary figure kind of a swashbuckling guy i seem to remember he ran he was running monolithic memories and the yom kippur war broke out and he literally called into the office and said i'll be in israel until the war is over and volunteered and went off to battle uh unique guy but he's been missing from action right here for a long long time where did you find him and why would you get a chip guy in a battery business in a car business sure um how do we find him um actually it was through one of the investors um at tesla one zev is a car guy i mean he went into sort of racing did a lot of racing um and he was very very competitive obviously you know great entrepreneur strong track record and i think very importantly he was someone who was he was not afraid of of danger as evidenced by his running off to the umpqua war uh um so you know towards the end of 2007 uh we needed to find a ceo for tesla and we didn't have a lot of takers um because it was a it was a very difficult situation um and there weren't there weren't very many people with the the guts of of zev um and anyway so so you know i thought was somebody who who could help get us out of a pickle and uh and who wasn't afraid to try to do that um and i mean i it's hard to describe tesla was in a really dire situation at the end of 2007. um it had come to light that uh the cars cost was a hundred and forty thousand dollars we've been selling it for ninety two thousand dollars um you can make it up in volume right yeah um and and not only that we we couldn't i mean there were several things broken about the car technically uh transmission being the most notable item but there were a lot of other issues um and uh you know so so we it really wasn't a car that could even even even if we said okay we'll we'll we'll accept the 480 000 this isn't a car that would have passed safety and reliability and endurance tests um and so it was just wow and we're sort of out of money or close to being out of money um so this is eight you know yeah like 18 months ago um you know in your situation like that you got to be pretty bold if you want to come in and run you know help run the company so um and he he was willing to do that and and he'd sort of like said he'd taken taken things from very tough situations uh before and so he yeah you joined as ceo and i in fact he and i were kind of the co-ceos of the company um because he he was coming in cold and didn't know any of the any other background and although i'd been at sort of a fairly high level up to that point um and not in the nitty-gritty at least i had the contextual background so he and i basically ran the company together for about 18 months um and then when the financial crisis hit uh i guess it was about well when the peninsula crisis hit and i was like oh man okay so i got to up my time and the company and and go from being kind of the the half ceo to the full ceo um because i also had to up up the ante in terms of my investment in the company financially um so it's like all right i'm gonna do that then i i gotta um you know be the full the full ceo not the half ceo well now bold is you know the ultimate entrepreneurial trait and you obviously have it i want to go back let's talk about your upbringing but before we do that real quick uh 40 how much for the for the yes 49 44 900 okay how fast uh it's zero to 60 in about five and a half seconds and uh top speed uh 130 miles per hour electronically limited we will have sport versions of the s that will go have a zero sixty of under five seconds um so but five five and a half seconds in the sedan is plenty far plenty fast oh yeah i'll think about those kids in the back seat facing backwards yes it's not 3.9 seconds like the roadster but it's pretty fast yeah real fast all right let's talk about your upbringing you leave home at 17 and you want to get to the states right was that your dream yeah first of all you want to be in the army that didn't seem like a good use of time being in the city yeah being serving as a yeah being constructed in south african army just didn't seem like a great way to spend time so without your parents approval you take off and you end up in canada first well so i'm trying to figure out how to get to the u.s so try to convince my parents to move there or my parents were divorced at least one of them could move there and i could move there with them and uh but i wasn't successful in convincing them and um but but then i found out my mother had been born in canada so i kind of walked it through the process of getting a canadian getting her canadian citizenship which allowed me to get my canadian citizenship which meant i could go to canada and my grandfather was american actually but because my mother hadn't gotten her american citizenship before he died and before certain age restrictions i wasn't able to get american citizenship unfortunately directly so i went to canada initially canada's a great country uh i was there for for about three years and um and then uh came down to to the states to go to to continue going to school at upan uh with wharton and you live on a book a day how did you live yeah but how do you do that i mean there's several times in your life when you're basically well below the poverty line right and this is one of them but it was that was 20 years ago yeah so that's like two bucks two bucks a day well there's there's all the difference that does make a big difference um yeah well i i wasn't quite sure how much money you know uh how uh how hard it would be to get a job or anything like that so i hadn't really had a real job um because i was only 17 so i've done like paper routes and stuff like that so i thought well just in case it takes me a long time to get a job i better make sure that my tiny stash of money lasts a long time so uh i only had a few thousand dollars uh so um so i thought well wait let me see if i can live for under a buck a day and you can do it i mean just buy like hot dogs in bulk and oranges and bulk and you know scurvy is bad so you could have an orange throw an orange in there that's right when the blisters start forming on your tongue it's right here an orange every couple of days will you know keep scoby away and uh hot dogs are you know like it's just sort of like pasta and pasta sauce you know just buy the stuff in bulk and and uh you can get at least the time you can get to under a bucket a day so now you pick up two different stick a little monotonous after a while yeah i can imagine the 14th day in a row of spaghetti right a lot of people pick up econ degrees a lot of people pick up physics degrees but not many people pick up both of those those are two different worlds i thought it was relatively unique and then i found it actually somebody else did it but uh uh but yeah i was it was um yeah just i i i um i mean i'm more an engineer than anything else you know uh engineering and design is my interest um but i figured if i don't learn the business stuff then somebody else is gonna make me do things i don't wanna do um so i better learn you know the secrets of business uh and so that's why i did the uh the physics degree as well as the fight of the foreign finance degree now now this is the most fine stuff was easy by the way that was really like and i say all my business courses like in the final year all my business courses together were not as hard as quantum mechanics okay i'll buy that so now this is the mythical moment in your career you get accepted to grad school at stanford that alone is a pretty big deal you're in physics well to be precise um actually my initial department was the material science department um and and you use the word high energy physics and and that's actually defined term in physics technically um i would have actually been in in kind of uh the quant quantum mechanics more than high energy physics uh because the area i was going to be researching was a sort of intersection of applied physics and material science and basically trying to figure out can you create a a capacitor with enough that enough energy density to replace battery now capacitor is are very common components in circuit boards um and and they're occasionally used to store limited amounts of energy but the problem is that they that the energy density does not compare to what a battery can do but if you if you could get a capacitor to approach the interchangeable battery then things like charging could be done in minutes or seconds technically so you wouldn't have a recharge time issue and then also cycle life and calendar life are would be measured in decades but elon you were there for two days you're there for 48 hours i've been in meetings that lasted longer than 48 hours right i've been drunk longer than 48 hours me too two days how do you do two days i mean that's not even long enough to like get the books well it was a it was a tough decision actually i was trying to figure out okay should i do grad studies or start a company uh doing some internet stuff and this was in 95 it was before um for the bubble just before an escape you were in public yeah um so in fact when i started zip2 it was not with the expectation that i would make a large sum of money it was like okay can i make enough money to live um and uh buy food and stuff that's that was really the threshold was very very low threshold and netscape had not gone public um or somebody wrote something about me that said oh i saw an etsy go public and that's why i decided to start zip2 i started zip two in the summer of 95 um and uh before escape have gone public i try to get a job at escape actually and and my didn't hear back from them so yeah now so you're really reading your biography i would have thought you were the wild man the black sheep of the family but now i've come to conclusion it has to be your brother because you come out planning to get a phd and 48 hours later your brother has convinced you to drop out of school and join his new company not quite no actually um i convinced my brother to come from canada oh yeah um my brother's convincing guy or maybe it was well he was in canada at the time um and and uh uh but you know i always wanted to do something with my brother and he wanted to do something with me and um and so a 300 million dollar shared gift is a pretty good gift for you yeah but i mean i really it at the time it was the expectations were really tiny now is this when you were sleeping on the floor in your office um actually i was sleeping on a futon uh which turned into a couch during the day that was like where you held your meetings yes right exactly that are true so you were you were you hadn't you were renting an office but you didn't have a place to live right so your apartment cost more than the office so we so then my brother and i just got two few times um which turned into couches you know and then during the day and then we'd have our meeting we'd have a table and have meetings there and then it might be unbeknownst to people that would have meetings with that before we slipped um and then we shouted the ymca on page mill and el camino uh so uh and then you could work out as well so i was in great shape and um yeah it was it was it was actually fine um so all you guys sitting in pete's with your business plans you think you guys think you have it tough uh any questions from the audience right now we're gonna get into space in a minute here but i want to as long as we're on cars let's take car questions first yes sir congratulations on your success thank you i'm very interested in your idea about email being built into your next car now the question i have for you is say i'm sending you an email with this voice is that what you're going to hear while you're driving my voice reading my email to you and when you respond to me i'll hear your voice responding to me it's just an idea so you got it from me just keep it in mind you don't have to respond right now yes or no thank you okay everybody sign an nda on the way in why did you name the car tesla uh so well the the company is named after nikola tesla who's uh actually very well known in the in physics because units of magnetism are actually units of tesla um and uh and we came up with a number of innovations also went crazy but uh so hopefully that that's no indication of the future of tesla but but he was a great man and and and didn't get i think the popular uh side of things hasn't gotten quite the recognition that he deserves um so uh it was a choice between tesla or maybe my faraday after michael faraday so um so capacitance is measured in far rights by the way in paradise so could you give us your perspective on the future of detroit uh future of detroit wow um well they clearly the companies are going to be smaller than they used to be uh i mean i don't think i can actually i'm not sure i could share any light that people don't already know about detroit and that it's going to be a much smaller industry than before there's i think there's a good chance it will emerge uh healthier from this this process than it then it's been in recent years um i mean gm and chrysler in particular and to some degree ford this was inevitable it was only a question of when um and so this the financial crisis kind of accelerated the inevitable but it it it didn't it would have happened anyway um so uh you know there need to be substantial reforms in the management side and on the labor side and you know i think really they need to get back to they need to focus on producing great products um that's what it really comes down to you know if you say who makes great cars how many people in this room would say gm um like it's kind of unusual um people say that if you said tell me who makes the best cars in the world it might be a toyota or a daimler or a bmw or an audi or something like that uh so i mean that's really what great companies are both great products hopefully but now once you prove mass production of electric car why wouldn't the m a guys from general motors and ford come knocking on your door well i should point out that if you there needs to be some currency for that acquisition um you know and the stock isn't worth a lot and right and they don't have any cash give you you're not going to take equity in general motors well so i mean i made this comment actually several months ago um i mean i was a little more a little more flippant when i say well what if general motors calls up and if what if bob let's see along with the board calls up and says he'd like to acquire it tesla what would your response be i said well you can't afford it because and that's just true i don't think they can afford much of anything they just don't have the cash and equity is not worth anything one more one more car question out there and then we'll go to space uh yeah how would you compare a tesla with fisker automotive uh so well frisco is producing a plug-in hybrid um so frisk is producing a plug-in hybrid it's not as we're talking about earlier it's we're pursuing a different strategy for the reasons articulated um and um you know if biscuits stay i think they're producing a four-door sedan but it's a sportier uh sedan than ours um you know our sedan is intended to to really be very functional and have a lot of cargo space carry five adults in comfort plus potentially two kids and still have room for luggage um and we're we're sort of the roughly 50 000 price point there i think at around 80 000 starting price after tax rebates i think that's probably a fair characterization of the differences let's talk about space we literally don't have enough time interviewing you to cover everything you do uh we could do three different events on three different activities let's do a space real quick where does spacex stand right now what's the status of things and where's what's that's the x prize too let's get into that okay um well spacex is doing really well thankfully otherwise it would be in real trouble um i mean it does particularly in terms of the time that that it takes you know the time that i have dedicated to the companies i'm on average sort of roughly 50 50 between spacex and tesla although as there are issues that crop up that need to be addressed that may that could swing into as much as 80 spacex or 80 tesla in a given week um but spacex is profitable it's been cash flow positive for the cash flow positive and profitable for the last two and a half years um uh we got to orbit last year uh we in december just before christmas uh nasa awarded spacex a 1.6 billion dollar contract uh to um resupply the space station with cargo when does that begin that begins the end of next year okay it's the first mission first the first operational mission after the demonstration missions is december of next year and at what point do you take over completely don't you have exclusivity for a while as as the space shuttle retires well fashionable is supposed to retire at the end of next year so then and then we'd follow our cargo missions immediately thereafter although if the space shuttle ends up running a little longer then there may be some overlap um are you gonna hit those milestones i think we have a decent chance of doing it it's not entirely something there's gonna be guys you have guys waiting up there for simple well nasa isn't nasa isn't i don't think nasa's counting on us being there exactly on time uh they do have some contingencies um um we're still going to do our best to meet those timelines i think i think we can we don't have it's not fully within our power because you know there's there's nasa as well we've got to meet all the nasa uh safety requirements and if they levy requirements on us that we don't yet understand or appreciate all their new requirements uh then that could push out the the effective date of the first operational mission um but i don't think it's going to be much much beyond the end of next year so i'm curious i've always wondered about this about you you know space exploration rockets are the stuff of governments large countries did you have an epiphany one day where you just said to hell with it i'm going to actually do this myself i'm going to have to create a commercial space company yeah i mean who sort of comes up with that idea you know you're in the shower yeah yeah um well like you know you mentioned uh the areas of interest that i had in college you know one of them was was uh space travel in in particular the extension of life beyond earth uh to like making life multi-planetary i mean now i actually when i was in college i didn't think i would actually be a part of i was going to say you're the only guy who had who thought of this stuff that actually did it i mean there are millions of people that think oh i'm going to do this i'm going to you know be an astronaut when i grow up not many people actually build rockets yeah they're 35 years old right and actually when i was in college um it wasn't it wasn't these are the three areas i want to be involved in it's these are these are the three areas that i think will most affect the future of humanity um i didn't if you'd ask me in college do it do you think i'd be involved in space the answer would have been almost certainly not um i thought it would be highly unlikely because you need billions of dollars you know you need to be a government and actually there's only like a handful of governments that can even do that so um so it wasn't what the expectation that i don't expect to be involved in space um but but as a result of paypal the capital i got from that i could do something in space and um it actually uh the the the space stuff uh well it actually came from a conversation with deo and i was there yeah there he is so i we're coming back from rodeo's parents place in long island and they're asking me like what do i do after paypal and i said well you know i i thought maybe there'd be something philanthropic that could be done in space that would get the public more excited about space travel and in particular uh sending people to mars um and and i said but i'm sure nasa's got that covered and uh you know so um i'll go look on the nasa website for for when are we going to march because of course it should be on the website like we're going to mars in this year and this is how we're going to do it um but there was nothing nothing at all um about about people going to mars i was like this is i just don't understand why there's nothing about people going to mars because if you look at the literature in the 70s um it was all about well we went to the moon now we're going to go to mars right um and so what happened and well there was a space shuttle and space shuttles turned out to be a really big mistake um and um it could barely get to lower orbit um forget about moon or mars or anything like that and uh so well geez maybe i can do something that's gonna get the public excited about about mars and and and that will generate congressional support which will turn into funding for nasa to go do this um and i looked looked at a few different options actually there and i did a couple of trips to russia to look at buying some russian refurbished russian icvms right um that's just change that's exciting a little bit yeah yeah make sure you you shift the payload like which one which button do we press i mean while nasa lost the blueprints for the saturn v rocket right so you couldn't rebuild that right um the saturn v was a great rocket it's it's just too bad that that we you know we should just rebuild that rocket and make it better like just improve on that rocket it was it was a good it was a good design um it's so much better than than the space shuttle it's so are you going to put them in your comparable are you going to put a man on mars you and i have a bet i haven't forgotten the bet right we were in a plane flying over the north pole under the aurora borealis right as a matter of fact and we made a bet you but you believe that man would walk you would put a man on the moon by 20 not on the moon i'm sorry on mars yeah by 20 20 20 maybe i think it was 20 20 at 2025. okay you gonna make it we'll try what's the next milestone for spacex well um there's the next big milestone we'll be launching falcon 9 our big rocket which hopefully will occur towards the end around the end of summer um and that's the rocket that will be used to carry our dragon spacecraft to orbit and dragon spacecraft as well will serve as the space station so falcon 9's pretty good sized rocket that's actually the most powerful single core rocket in the us fleet um more powerful than what boeing and lockheed make um before considering side boosters how much each one of these cost on a per flight to falcon 9 about 40 million dollars those are big bets yeah although and then if you add a dragon spacecraft on top of that is about the same and then there's various nasa overhead so you're like 100 million dollar bet when you yeah like the fuse on that thing yeah that's a deal in the rocket world by the way um for only a hundred million dollars um we will carry some cargo over um so yeah um so that launching falcon i will be the next big one there's a sort of smaller milestone which is an upcoming falcon one flight maybe as soon as the end of this month uh that'll deliver our first operational satellite orbit uh which is the malaysian satellite um it's intended to do earth observation you know for like natural disasters and stuff like that and um yeah and and then let's see then at the end of this year hopefully we'll do it launch our first dragon spacecraft from falcon 9. um we'll go to the space station we'll do some basic orbital maneuvering and re-entry uh and then uh next year we go to the space station for the first time okay how long is the contract for the space station how long how large how long or long um it runs through approximately 2015 okay and although i think it'll be extended beyond that because right um it's just the operational plan for the space station kind of only goes to 2015 so uh frankly in theory if you get this right do we need nasa anymore well absolutely well nasa um we aren't a customer to nasa right or right nasa is our customer i should say um so they're our biggest customer and and in fact um when when nasa does developments although in in all circumstances prior to this nasa has been has had these sort of made the design decisions the implementation of those design decisions has been done by um aerospace contractors so so the the novel thing here is that for the first time nasa isn't isn't dictating the design they're simply saying we need cargo delivered we're willing to pay given you a performance contract and yeah the rest right yeah right it's sort of more like fedex you know yeah for spacex we deliver yeah yeah absolutely any questions about space guys there one down here we have a homestead high school junior asking a question uh is this on okay uh so for your uh falcon series you decided to use the merlin engine right um right we developed the middle of engineering yes my question for you is why did you go for the single or one type of engine and then using nine of them on the falcon nine how many yep because i've seen a lot of other in history of space it's like but everyone you know like above five you're like oh my god the turbo pumps are all going to blow up or something and then so why'd you choose that instead of developing a larger engine well i should put up like the saturn v although it had five engines on the first stage i also had five engines in the second stage and then one engine on the third stage there was actually 11 engine rocket falcon 9 is got nine engines in the first stage one on the second stage so it's actually one total of ten so one less than a certain five um and the the advantage of the nine engines is that you can lose an engine at any point including immediately after liftoff and still complete your mission which was not true of saturn v the thrust away the saturn v was about 1.15 so you actually had a very dangerous point immediately after liftoff uh where you could potentially subside uh if you had an engine failure within the first few seconds um with with uh with rockets because you're taking it vertically um you it actually point for the first stage it actually for the initial blue stage uh points you towards having more engines um because if you want true engine out uh capability um because you always have to have a thruster weight greater than one otherwise you're coming back whereas an aircraft you you can have a thrust rate of much less than one and still be okay because you you can sort of glide and reduce your your climb rate and that kind of thing and still be okay so so it actually it does it does push you to have more than than say like you know 747's got four engines but uh the equivalent for a rocket would be some number greater than four and so and maybe it's not as high as nine but we kind of we needed nine to achieve the pa the payload requirements that our customers wanted and as long as you're very careful about ensuring that the problem with one engine cannot cascade into problems with another engine more is actually better um and uh you know google operates with tens of thousands of computers rather than a few giant mainframes um so it also fits with the tesla model of having right you know eight thousand little batteries i think nine engines is bad uh 6831 cells next question so uh elon with the dragon spaceship uh spacecraft is that going to also be a man's craft and if so are you going to be shuttling the astronauts back and forth to the space station uh yeah a dragon is designed to meet the nasa demand rating requirements um there's a few key documents there regarding structural safety margins and redundancy signed to meet those those requirements there's uh um you know g loading mxg loading and dealing with worst-case abort conditions and that kind of thing it says all those things were designed to meet there's one key development item that we need to finish which is the escape tower so that um we have a launch escape system um in case something goes wrong with the core booster it can take it can carry the the capsule to safety um it's also something they had during the apollo europe but didn't have that they don't have that for this the space shuttle um and if so i mean in that really the two uh weak areas of the space shuttle and then the two most dangerous uh periods for uh you know a manned vehicle are during this of the sand phase and the descent phase there are two there are there are fundamental architectural flaws with with the shuttle approach um one is on the ascent phase there is no escape system they decided they didn't need an escape system because the shuttle would would never would never fail um really we're like wow okay um so so there's no escape system if anything goes wrong on the ascent it's curtains and then on reentry particularly the initial part of re-entry which is the high heating point the because it's a it's really it's not a naturally stable vehicle you've got to have control surfaces and wings um you know or so it has it has control surface and wings so if anything happens with the control system so any electronics that don't work malfunction or or there's a hinge that that you know isn't working properly in one of the control surfaces that that's at your toes it's not naturally stable it has to be controlled and and then the heating rate goes with the square of the radius of whatever you're doing so if you've got a wing leading edge that's got a very you know effectively a sharp radius you have a very concentrated heat which limits the material choice to some very brittle materials in fact it will only work for for earth orbit re-entry if you come in at a higher velocity than low earth orbit velocity there's no material known to man that can withstand it so actually for like the moon you could you couldn't use a winged vehicle it just it's impossible um so um i mean it's not like if you think of polar era okay they had airplanes back then it's not like oh wow wings what are those things um you know the the designers of apollo von braun and and the others were very familiar with aircraft um if they thought wings made sense they would have said let's put wings in this thing they don't um when it comes to space wings are dumb just as you don't make an airplane look like a boat um so if so so if when they retire the space shuttle how are they going to bring the astronauts back until you and get them up until you're able to do that the soyuz okay the russians are good yeah so the soyuz is a good i mean if i would definitely prefer to ride on the soyuz than the space shuttle you have an escape system on the soyuz oh and then of course on re-entry um a capsule a blunt body or entry capsule you can be designed to be naturally stable so that even if all the control systems fail that it you know you're just lights out dark everything's you know you're it's it's naturally it's like a shuttle it's naturally stable on reentry um and you don't have to you know um do anything there and you can just manually pull the shoots or something like that so in fact that's happened on a couple of soyuz flights where they've had control system failures if that had been the shuttle it would have been curtains um but because it's because it's naturally stable you don't have to worry about that and then because you've got that blunt body reentry um the heat shield is much more robust uh because you've got this really big radius heat shield instead of these sharp radius wings so it's really much safer design and i believe there's never been a fatality on the soyuz which has been going much longer than this than the shuttle man many many more flights so elon how do you keep these two different things separate in your mind i mean you're dealing with two massive industries very distinct worlds i mean do you have to like literally say oh wait a minute i'm doing rockets right now no i'm doing cars right now and how do you man how do you segregate those two things because they're they're both competing for your attention 24 hours a day right and i've kid my kids actually spend a lot of time with my kids by the way four kids five kids five kids yeah right how do you manage that yeah that is tricky uh yeah okay yeah uh well actually it's okay most of the time but you know if it's when when a crisis flares up in either kids or one of the businesses then then it gets can be quite a little bit overwhelming so it's like triage all the time it is it is kind of like triage um i mean and i mean the rocket business and the car business are pretty hard in the best of times and these are not the best of times next question you don't like wings i don't like wings for things that go to space where there is no air i think i mean my understanding of the reason the wings were on the space shuttle was so they could land where they wanted to oh okay so let me let me correct the misconception then uh a a a blunt body sort of a capsule you know gumdrop style thing uh is a controlled uh landing um in fact uh because you have you still have a lift vector so you you use offset center of mass to to create a sort of a tilt in in the capsule and that actually creates a lift vector um and that lift vector you typically be a lift of a drag of 0.2 to 0.3 but that's plenty plenty enough just to steer you where you want to go and in fact even in apollo when they didn't have gps and they uh you know they were really dealing with fairly very primitive electronics the their landing accuracy was a one mile radius and of course if you can get much better than that with gps and all that other stuff in fact the only error is uh the wind drift um that's the only that's really the only meaningful error and if you um if you have if you do a steerable shoots or put some like little like a little propeller that popped out or something like that um you could you could drop the capsule on the numbers on the runway uh just like you could drop just like a parachutist can can steer their their flagged down to a very accurate uh location um and then you could you know i think you sort of like flare it uh just before you go to the bottom just like a parachutist and there you are next question in the back i was there uh i was there several years ago uh in the mojave desert when space flight one took off for the maiden voyage i was wondering first of all what was spacex's involvement in that program and do you guys have any plans for taking up civilians into space um we didn't have any involvement uh with with the um vertebrate 10 spaceship one except that i'm a trustee of the x prize foundation and i i provided a little bit of the funding to um to that to the ansari x prize that they won and i was there for um one of the flights um so and it's actually you know it's it's great that it was one um but it is worth pointing out that there's a significant difference between a sub-orbital flight and an orbital flight because space kind of seems like well space is all the same thing but if you if you look at the energy required to get to space versus the energy required to get to orbit it's the very different orders of magnitude um you need a ideal velocity of roughly mach 25 to get to orbit mach 3 to get to space if you define spaces say 50 miles up and so it's pretty that's pretty big differential but but it's bigger than that because the kinetic energy goes with the square of the velocity so you need 625 units of energy to get to orbit nine units of energy to get to space um so about one and a half percent of the energy one versus the other so the requirements are really way way different um the uh yeah so you need in fact it's only just barely possible to escape this gravity well just just barely um if you look at the size of saturn v uh for example that that and that ultimately took two people to surface the moon one plus one who was orbiting the moon um that was a really gigantic vehicle i mean it's like the size of an office building and it got two people to search the moon next question um why do you think uh multi-planetary existence is important um excellent question um so okay so you have to say how do you decide that anything is important um so there's um i think the lens of history is a helpful way to distinguish more from less important things and the further out you you zoom the more you can distinguish the less important from the more important and if you take a look at the whole 4 billion year history of earth and evolution of life itself and say well what are the what are the really big uh milestones in the evolution of life itself and you can point to obviously you know single-celled life and multicellular life differentiation into plants and animals uh movement of life from the oceans to land um the uh mammals consciousness you know sort of those the big the biggies um and uh and those stand above the i think the parochial things uh concerns of of humanity um but i think on that scale would also fit life becoming multi-planetary i think it would be at least comparable to life going from the oceans to land arguably more so uh because at least ocean's land could be a gradual affair um if we've got uncomfortable you hop back in the ocean um it's that's it's it's a lot harder to go over you know to travel a billion miles over you know irradiated space um and then land on a hostile environment and create a self-sustaining and growing um you know life ecology that's really really hard and in fact this is the first time in the four billion year history of life itself that it is even within the realm of possibility so so i think therefore if something is important to be important enough to figure on the scale of the evolution of life itself it should be at least considered say worth is about as much money as we spend on lipstick um you know maybe not as much money as we spend on healthcare with that's a lot um but but enough on you know maybe north of cosmetics or something um and uh yeah so you know i think we should spend a little bit of of our resources doing that and and that's just a a wise bet for life as we know it um and um yeah so just it just seems like that that should make it important enough to for a little bit of a little bit of money like maybe a half percent half a percent of our gdp or something like that um and that'll be enough to do it anything you want to say on solar city uh solar city is doing great uh thank goodness uh it is you tell the audience what it is sure uh solar city is the country's largest provider of solar power systems to homes and small businesses so outside of the utility scale solar activity and it was co-founded and run by peter and lyndon rive who are my cousins and you're so full disclosure so i serve as the chairman there and i provide some advice strategically and on the product side and um but thankfully it requires almost none of my effort and those guys are just awesome in terms of their execution of solar city um having grown into a leadership position in the course of three years so um if anyone's thinking of getting solar call like 1-800 solar city something like that well 88 i'm sure any questions nice question so here so how does that work i mean you've convinced the nasa to give you like a huge contract um how can you imagine that what story is behind that can you tell us or can you share us that story a little bit that's the one question that i have and the other is you've been working on solo you've been working on cleantech or on cars you've been working on space so you're transforming society and all those projects and then there's paypal um so how does that fit that's the two questions um well definitely paypal i mean i was completely out of paypal well almost completely out of paypal when i started spacex and uh and then you know with i mean i from from a business standpoint my time is really split between spacex and tesla almost no time i spent almost no time on solar city because it's it's just running so well by itself um and the guys they're just doing a great job and there's really not much i can i can add to what they're doing um so um so but going to the nasa question it took us a long time to and a lot of effort to convince nasa to to rely on us um and when we when we won that cargo resupply services contract um you know basically value ranging from 1.6 to 3.1 billion dollars we competed against uh boeing lockheed and aligned tax systems we're actually there all three of them together against us so um this is sort of a partnership called planet space which is basically was just a it was flowing lockheed and line tech systems against spacex and we want so um and or at least nassau felt confident enough to give us that that that deal so and and um preceding that it had been sort of six years of of working to gain their confidence and we'd want a preceding contract which was a called the cots contract commercial overall transportation services to demonstrate uh progress in that direction but i have to give nasa a lot of credit here because without that cost contract it would have been very difficult for us to compete for the cargo resupply services contract they've been helpful in advisory capacity and enter financial capacity so i think we're very grateful to nasa and appreciative of everything that they've done because we we wouldn't be in a position to one that that calgary spy contract without their help during that microsecond each day that you actually have to contemplate other activities what are you dreaming of now i i yeah i mean i really i'm you know my mind is full um just dealing with with spacex and tesla and then family matters but i mean there are a few areas i mean i have some this i think at some point in future if you're interested take a look at fusion um that's a tough problem and it's something that i think we could solve but it would you know i'd say me i mean i think so humanity could solve that problem but it is a very tough one um and maybe there's something i could where i could be helpful there um and uh that's just completely speculative i'm not i mean it could be totally wrong success may not be one of the possible outcomes hey if you can get me to sit on 3 000 laptop batteries you can get me to sit on a fusion reactor uh yeah well fusion yeah fusion this i think some scale is needed for fusion pro probably um although some ideas for having smaller scale fusion um i'm not talking about cold fusion but sort of i kind of fusion at sort of a nano scale like basically very small amounts of fusion in a little container um but it is a very hard problem and then um i have an idea for uh great double deckering highways um which i think i thought i thought a lot about on when i'm driving to work in la um uh the highways i mean it would just be i think if you create prefabricated sections of highway and did a very efficient kind of a metallic uh structure that could withstand the worst earthquakes and um the trick would be making it light and it's very strong and um and inexpensive but i think i know how to do that um and it's that sort of relatively mundane but we have a big effect on people's lives and i have this some sort of idea for an electric plane which i think could be pretty cool um yeah yeah electric supersonic plane that's a lot of batteries it is that's a lot of batteries it is it is a lot of batteries next question by the way i haven't heard any of this stuff before this may be in print tomorrow yes so nobody says that's what i'm doing you asked me what i'd what nano say a split second of like i'm like okay i've been thinking a lot about the plain one more than i should actually i try to ban that from my mind i'll talk to you about it um yeah i i got to stop myself from thinking about that one because i that that's sort of that's a very exciting one um i don't think you covered the x prize um the status of the x prize and two-part question what do you think about a bigger x prize for battery technology in the us sorry a bigger x price for what a battery battery um yeah i think x-rays for battery technology would be great if there's you know a sponsor like the federal government or anyone um i think it's it's great to incent outcomes rather than that um as you know it's it's great to make beth bets on approaches but it's also good to incent outcomes um and ultimately you care about the outcome not the approach and that's the good thing about prizes is they they don't try to um rely on some panel of experts to figure out what the the approach is that's going to work because often those panels of experts are not the people who are going to figure out the innovations that result in the outcome you want and that's basically why you have prizes um so uh and as far as the expo is concerned there's um on automotive x price there's a genomics x prize for low-cost sequencing of genes there's the google lunar x prize um which spacex is trying to help with a little bit by offering the the only discounted launches we offer are for the google lunar x prize actually and uh yeah so this is you know there's a bunch of stuff happening there and um i think i think it's a good model it should be emulated more uh darpa did a great you know did a great example of a prize thing with the dolphin grand challenge um that was um there's the grand challenge darpa urban challenge for autonomous vehicles that's got to be one of the highest bank for buck items that darpa's ever done because i guarantee if you made that like a dod contractor and had like you know lockheed and raytheon and all the usual suspects put on it it would have been like two billion dollars and they'd still be working on it um you know so so anyway i'm i think there's a lot of room for prizes i should be more of them one more question then i have one given the range of technologies and areas you've touched i'm curious what your take on robotics is it almost seems like on robotics exactly it seems close enough to what you've done but i haven't heard you talk about it well um you know tesla does use robotics to a limited extent in um in its production today particularly on the battery pack side because you've got so many cells almost 7000 cells that um so some robotic assistance is is important making the the battery pack um and we'll certainly see a lot more of that as tesla scales up so robotics makes makes a big it's great for mass manufacturing for space exploration obviously we've seen great dividends played by robotics as well with the mars exploration rovers um and uh there's a really big rover uh going called um mars science laboratory and that was supposed to launch soon but it's going to be a couple years before that goes that's about the size of like a volkswagen um so so i think there's a a lot of room for robotics in a lot of fields and um that'll increase and continue in both automotive and space and other areas but at the end of the day you know i think we still need to make life multi-planetary i can't just be sort of saying droids out there um yeah i'm pro-life uh in that sense so um so i think robotic aspiration robotic preparation um but but uh but we also need life going beyond earth as well i haven't really thought about robotics uh personally um but just not say that i don't think there are there are lots of things that could be automated and where there could be robots that help people in their daily lives you know uh some i'm sure there'll be a continued expansion of the whole irobot type type thing beyond vacuum cleaning um so um yeah yeah i think it's i think it's a great area so i have one last question for you i've followed your career for a long time known you for a long time yeah um you know for many many years you were very you were very successful but largely anonymous yeah you know i i've been here for a long time right i was underground you could walk the streets of oxford and nobody knew who you were i think i could still do that by the way i don't know but less and less um in the last couple years you become increasingly a public figure a celebrity and your name starts popping up now in gossip pages and websites and that sort of thing how are you dealing with that i don't love it is it is it interfering with your ability to do what you do um it i think i i don't like i don't like it when people think wrong things i mean i i'm not far from flawless so i'm like but i don't like when people think wrong things about me um and i guess the the the um yeah i i must say i don't i don't really like the the sort of celebrity element uh i or i i don't like when people sort of try to write things that are sort of trivialities that don't actually it's like why i write about that you know obviously people find that kind of interesting or some people do hopefully not many um and um i don't know sometimes people say like wrong things that i get you know concerned that well what if my kids read that you know because they're five and they're starting to read um and and that's that i mean that's probably the most concerning thing i'm not too worried about it from a business standpoint because most people that i interact with particularly if they've known me for a while they know what's true and what's not true and and um and in a lot of cases they don't care anyway even if it was true they don't care um but but i do i do it does concern me if my kids were to read something that was just not true i mean you understand if as tesla continues to be successful and as spacex begins to assume the role of the space shuttle you begin to become something like henry ford and werner von braun combined and that's a level of celebrity few people ever know and are you ready for that i'm probably not ready for that i'm not a naturally extroverted person in fact i i would i used to be horrendous at public i mean i'm not that great as it is but i used to be really horrendous and just sort of shake and be unable to speak uh but um i kind of learned not to do that um so i mean i'd much rather just be you know doing engineering and stuff uh and design so that's really what i like to do um maybe you know and i'm happy to and i like doing things like this which are which are fun fine and um but uh and you you know if you're in the car business you gotta sell cars and stuff so i gotta i gotta go out there and be promotional but there are other people at tesla that actually are much better speakers and sellers of the car than i am i think so that's hard to believe anything else you want to tell these folks out here uh she's talked about a lot um i thought there's some really good questions from the audience actually uh i'm not superstitious but uh you never know i mean there could be some uh divine entity that sort of uh there is uh then i uh i hope uh hope that that entity is favorable and worst comes to worst you already know how to live on a dollar a day yeah yeah absolutely ladies and gentlemen the uber entrepreneur elon musk elon mike thank you so much for being here we know that you have very busy schedules both of you we very much appreciate you taking time to speak with us this evening it is a very small gesture of thanks we have a wonderful churchill club t-shirt for you please wear it in very good health and thank you all for coming look forward to seeing you at the next churchill club program and by the way there are 13 letters in churchill club good night all right thank you

Channel: ChurchillClub

Views: 127,432

Rating: 4.8226371 out of 5

Keywords: Churchill Club, Business, Technology, Innovation, Silicon Valley, Uber, Elon Musk, Tesla Motors, SpaceX, SolarCity, Michael Malone, Author, Wall Street Journal, New York Times, Commercial Software, Blaster, Zip2, Entrepreneur, Business Strategies

Id: n1j0yHOxcL0

Length: 92min 59sec (5579 seconds)

Published: Wed Apr 08 2009

Reddit Comments

[u/Serpreme]

I believe the thought was that the gain in solar benefits in even unrealistic conditions did not provide enough benefit for follow through on this idea.

[u/Neo63]

I am currently on a solar car team, and to be perfectly honest, the amount of power generated is so minuscule that it's not worth the effort. 1 m² of solar panel will give you maybe 200W of power, which is a few percent of total power consumption for a commercial vehicle.

[u/datoo]

If you keep listening to that talk he also quotes the Model S price as about $50k. A lot has changed since then.

[u/10190155]

Ford made a concept: http://www.autoblog.com/2014/01/08/ford-c-max-solar-energi-concept-ces-2014/

With the help of a canopy/lens charges 21 miles in a day.

[u/alphacentauriAB]

Also, what is he talking when he says "And cook the whole car with some kind of amorphis...??" I couldn't hear what the last couple words were.

[u/RichardBehiel]

The power density of sunlight is about 1.36 kW/m².

Assuming 4 square meters and 20% efficiency, that's about 1 kW.

1 kW = 1 kWh per hour, so you can see why putting a solar panel on top of a car isn't really worth it.

Theoretical 100% efficient solar panels would only give you a ~5x improvement on current state-of-the-art panels.

[u/canadaarm2]

Maybe someday we will see windows and paint being transparent solar cells with 50% efficiency which can be produced at low-cost and cover the whole car.

If we assume 10 m² @ +50% efficiency and 1kW / m² of energy coming from the sun for 5 hours - that'd be 25 kW of converted energy and +50 miles per day - pretty amazing but unrealistic at this point (maybe in 10 years?).

I agree though, that even less powerful small solar panels (instead of the panoramic roof?) would be a cool add-on but I think Tesla should use their resources to concentrate on more important things at the moment and add solar panels + other cool features when it makes sense.

[u/[deleted]]

Here's the blog post from 2006 where then-CEO Martin Eberhart explains why they dropped that option from the Roadster:

We thought a lot about putting solar panels on the upward-facing portions of the body. The trouble is that the square footage available for solar panels would only increase your daily driving range by about 5 miles. While there is a sensible argument for such solar panels topping off your battery when you leave your car in the airport’s long-term parking for a week, it just did not seem worth the complexity, weight, and cost.

Solar panels make so much more sense on the roof of your house, or out in the desert someplace where there is enough acreage available to power all your driving. This becomes obvious when you think of the electric grid as storage: solar panels produce energy during peak consumption times, and your electric car consumes energy at night while charging – when energy is the least expensive.

Solar panels on an electric car seem a bit like fins on a ’59 Caddy.

A month later, Elon and Martin made a joint blog post where they got pretty deep into the technical details of photovoltaics. The relevant section:

Question: Why don’t you put solar panels on the car to at least partially offset the energy consumed by the car?

Martin: The only practical place to put panels on the Roadster is the roof (about 1 square meter). Ideally, this would then generate 263 kWh/year. However, the Roadster won’t always be in the sun, and it won’t be at its ideal angle. A 60% de-rating would be generous to account for shade and suboptimal angles, so the panel would generate about 150 kWh/year – driving the car an additional 2 miles per day. This is not even a 1% increase in driving range!

Elon: Although the amount of energy that could be recaptured from the top of the Roadster is small, I originally pushed very hard to have this option available. Martin argued that such panels would only be decoration.

Martin: Fins on a ’59 Caddy…

Elon: … Thank you Martin …But his real reason was that he needed to keep his engineering resources focused on completing the Tesla Roadster itself.

Martin: We may one day offer a solar-roof option for the Roadster. Perhaps an aftermarket company will beat us to it. In the mean time, we will partner with solar providers like Solar City to offer rooftop-based solar options for Tesla owners. We’d like to see a modular solar carport as well.

Interesting that Elon is mentioning it in 2009 in relation to the Model S…

[u/krystar78]

So that u can charge the car 100ft of range in an hour?