An Interview with Elon Musk

and the way that you've approached the design of the Tesla cars the way you've approached the theoretical plan for a hyperloop at some point safety has always been baked in as a core principle of what you've done so it's consistent yeah I think certainly um I think safety is safety is really important right um you know I think uh it's particularly important when there's the potential for uh mass destruction right you know it's I mean I think AI is something that is risky at the at the civilization level not merely at the individual risk level right and that's why it uh really Demands a a lot of uh Safety Research that that's what so I've um committed to uh fund $10 million worth of AI Safety Research I've resarch a AI Safety Research yeah um and I'll probably do more actually I think that's just just that's just the beginning that's that's the beginning let me uh uh ask you directly about Texas the fact that you're in Texas is no accident you were here during the second it is Texas yes I can confirm that it's Texas you were around during the 2013 legislative session your lobby team larger number was around the capital attempting unsuccessfully it turned out last time to try to get permission uh for Tesla to sell cars directly to customers in the state of Texas you said at the time that you'd be back that in the in the the political realities are sometimes it takes three times before I hope it's only twice you hope it's only twice right well Pro see you next time provisionally but let's see if you can get it done this time would you talk about the issue the political and policy issues at the center of this fight it sounds that in a state like in a state that is so good with free enterprise right Liberty we want to give everybody the right to do what they want without the giant boot of government coming down on their heads sure that this sounds like something that ought to be a no-brainer but the automobile dealers and their team has a different point of view about this so talk talk about that yeah absolutely um really all we're saying at at Tesla is that we want to be able to sell our cars direct to consumers in Texas right um and I think this is this is actually directly in line with the ethos of Texas um in fact restricting what consumers can do uh in terms of buying Direct is extremely unex right um it's it's it's very weird that it's that it even exists I mean you think of something like um Michael Dell's company Dell direct Dell direct Dell started his computer company in Texas selling direct to Consumers right if the same laws had existed for for for uh computers as exist for cars right uh then Dell wouldn't exist right or it would be in some other state yeah um so it really uh I I think there this something on the books that most Texans aren't even aware of that is that is fundamentally un Texan and and needs to be changed and and and the Restriction relates uh uh to the model for selling cars that exist in Texas today you have to go through kind of a franchise dealership model that is the law on the books right now yeah the the law currently says that in order to sell a car in Texas you have to sell through a franchise dealer right um but this exists only for alcohol and cars which is weird right um maybe maybe you can fix that booze problem next actually I mean probably that should shouldn't exist either um it's just weird that it's cars like what the right you know and uh and we we can sell Direct in every other in every other country in the world and in um in in all of in we can sell Direct in every state in the United States except for about half a dozen yeah um so it it's it's just we're just asking for uh essentially a modification of the law to allow us to sell direct consumers and um is it competition Mr musk is is that what has the the the opponents of this plan tied up in kns competition they don't want you in taking away some of their b as I understand the numbers right now don't your sales in Texas represent .1% of the total number of cars that are sold in Texas yeah I don't think we're like a huge threat to the car dealers right um but of course if you were permitted to sell cars directly you might you presumably would grow those numbers to some degree yeah we might grow from 0.1 to 1% perhaps or 2% yeah um but it's it's not something that I think is fundamentally a threat to to the car dealers um and and and the problem is that the the the incoming car dealers have a conflict of interest um they make all their money from selling uh gasoline cars right um for them to to then tout the advantages of an electric car uh when most of their money coming from gasoline cause they're undercutting their own deal it's a conflict of interest right um they're not going to do that right um so if we were to go through them we would fail but of course many of the traditional automobile dealers and and auto companies are themselves getting into the business of electric vehicles yeah right but but they they always sell them very very I mean the electric car sales in the United States are are very low right I mean and and it's but you're betting on the future Mr musk and there are obviously things that have to happen in order to enable the electric car sector to grow there has to be adequate infrastructure which doesn't always is not always in the control of the car companies themselves there's got to be you know working with government working with local communities being sure that we have the infrastructure that we need to to to support this this emerging sector but the reality is if the auto companies or the auto dealers see that there is growth potential they will get into this business in a much bigger way in the long in in the long term yes and we've actually struck compromises in a number of other states where we've um we've been allowed to open you know let's say take the state of New York for example we're allow we're allowed to have um up to five stores right in the state of New York so if we were to do something like that proportion in Texas maybe we would have like the Texas biggest state so seven stores right um and then say after seven stores at that point you know we'd have to go to franchise or something like that so you'd be willing to entertain some modest yeah yeah pres to start yeah yeah abut and you indicated actually at the Detroit Auto Show this week that you would be willing at some point down the road to consider a more traditional franchise dealership structure if it came to that um yeah we certainly consider that down the road but I I can certainly say like anyone who's been a huge joke to us thus far is not not going to be one of those so J need not apply right that's I mean if they've been punching Us in the face they shouldn't expect that we're going to be their friend right yeah um let let me ask you about that question of adequate infrastructure this this this came up in a weird way a misperception of the Tesla situation in China where you all reported in fact I think you specifically revealed at the Detroit Auto Show that fourth quarter sales of Teslas in Chi in China were not where they had hoped to be where you had hoped them to be and there was some question about whether on the China end of this conversation they thought well you won't really don't have charging capacity that's adequate to to to make this go can you talk a little bit about that and I want to understand in this country if we have a similar misperception of what's required to make this model car work yeah I I think there's a I maybe a couple points that are worth clarifying um for for for for Tesla sales and and demand are are two different things because the way that sales is measured is is in terms of deliveries right um whereas you know for the rest of the car industry because the cars aren't ordered in advance um sales uh demand and and deliveries are the same thing because their cars are out on the lot um and and that're they're not they're not built to order right they're out in the lot right so so very it's extremely common for people to uh misunderstand demand and and sales for for Tesla for um sales for us is or the the the sort of technical accounting definition of sales is how many cars did we deliver right but the measure of demand is how many cars have been ordered correct um so at we we have far more cars ordered than we can deliver right now now we're trying to solve that problem U by ramping up our production so increasing production would would address that in part yes it's important to note that the demand for our cars significantly exceeds our production Capac currently so when people say well he only sold 33,000 cars in 2014 less than he predicted or he won't reveal his monthly sales numbers because he says they'd be misleading this is what you're talking about yes I mean maybe at some at some point this will become clear but but because Tesla is so is like a different different animal than the rest of the car industry uh it the the numbers mean different things it's not Apples to Apples correct people people look at uh our deliveries or sales and take that as a proxy for Demand right um whereas the actual proxy for demand is is how many unfulfilled orders do we have right it's more like the aircraft business where they'll have an order backlog indeed um so uh I mean right now the the wait time for a Tesla if you if you order one is anywhere from three to five months three to five months yes right and ideally it would be with all adequate facilities in place you'd like it to be what a a month a month you know goal is to cut it down goal is cut it down yeah if we can get it down to like low single digit weeks I think that's that's ideal right let me let me ask you about one aspect of this model and the the the the cost of a car and where those dollars go that are of particular interest to Texas right now we are engaged in an enormous conversation about funding of Transportation well people who buy gasoline powered cars in doing so or use gasoline powered cars indirectly contribute to to the state budget in ways that we really need and in fact we're constantly looking for more money for transportation more money if if you have an electric powered as opposed to a gasoline powered car how will your customers contribute from a revenue standpoint to the Texas budget to education to roads sure where are you all going to put in your table Stakes to contribute to the economy of Texas well I mean there's there's certainly are taxes on electricity Generation Um there's registration fees and that kind of thing right um and but you're not paying gas taxes well no drivers of your cars will not pay gas taxes and therefore the revenues available to Texans through the state budget generated by gas taxes will not come from Tesla customers I mean gas taxes can't be very high because the price of gas in Texas is real low right well it is right now don't bum us out it'll get back it'll be okay it'll be better it's like super cheap right but the point is you don't think that electric car customers should have to figure out a way to contribute their share as gasoline car customers do through yeah no sure they should I mean maybe there should be at some point some some increased tax on electric cars or something like that to match that of gasoline cars right uh but um you know me but I mean I I I can't imagine like you said that that there's very much revenue generated from taxes on gasoline given the low price of gasoline now you're going to be putting a fairly heavy lobbying effort in place to get this legislation done up this session you've got a bunch of Tesla cars now actually out by the capital today as a demonstration yeah you're going to have meetings today up at the capital and you intend to really put on a full court press to get this done what's it going to take what will be different this time than last time well um I think where there's a lot more awareness there actually are a lot of Tesla customers in Texas um again 1500 cars sold in Texas last year right so not all that many our voter turnout is bad but it's not that bad yeah yeah but still it's there's a lot of supporters um and I think there's a lot more awareness in the Texas state legislature than this time than there was last time right um now we we are being out lobed by the Cod Dealers Association by probably 10 to one well that that's one another reality of life in Texas is he who has the biggest Lobby team wins right that's it well I certainly hope not um but but yeah it's kind of crazy the the order Texas order Dealers Association is really pulled out all the stops right um they they said they'll spend whatever it takes to to win um I think they're spending us out spending us at least 10 to one maybe more um but I mean but at the end of the day I think um I think we have the people of Texas on our side y um and uh because all we're trying to do is give people in Texas the right to choose how they buy their car why should they be denied that right now didn't you um didn't you didn't you say to me uh earlier in this conversation we don't want to do business with jerks who who does right well so I'm wondering was was well in my business sadly it's occasionally necessary unfortunate right um but my my my question is you made the decision to locate your battery plant in Nevada and not Texas some people perceive that to be you saying well if they're not going to change the laws to accommodate my direct sales model I'm not going to do business with the jerk that is the state of Texas I'm going to take my battery plan to Nevada is that what happened was this punishment it wasn't punishment it certainly wasn't helpful um but it wasn't Punishment No right yeah um we are actually still strongly considering the long term um you know you know I'm please hope this doesn't come become some big news article um but but we are we are considering um in the long term uh you know F future vehicle and Battery plants right um and Texas would certainly be a strong Contender for you've already got a presence in McGregor and Waco a company I guess it's more SpaceX than Tesla right but you have yeah you're already doing business in one part of the state you obviously have the B to switch over to the SpaceX stuff you've got the bach chica facility now the the the rocket facility down there in the valley so you actually are doing business in Texas despite your issues with the legislation yeah uh I mean I mean I've been doing business in Texas for 13 years right um so that's that's 13 years ago when we established the rocket development rocket development facility in McGregor right uh near wo and uh that's worked out really well for us it's the most advanced uh Rock Development facility in the world at this point um so I think people in Tex should be very proud of that um and then we've we're establishing the first commercial orbital launch site in the world uh at Bach chica near Brownsville right um so I I think mean I love Tech you know come here a lot yeah um and uh you know so so yeah certainly you know big big fan can I can I ask you about the the the rocket facility in uh in the valley uh you just actually had a launch within the last little while right yeah and it was perceived to be not successful because of the way the rocket landed but the reality is the mission was really to deliver Goods North and that actually was a success right you you were generally happy with the test yeah uh I think within the space Community certainly uh it was I think quite well understood the uh the mission was completely successful in delivering Caro to the space station which toward the primary Mission um and I would consider it partly successful in uh trying to do something which has never been attempted before which is to to to land a rocket stage successfully to to actually um uh land rocket stage successfully because every other rocket in the world the the rocket stages basically smash into the atmosphere explode um and then further explode when they hit the ocean or in you know the steps of Kazakhstan or something like that um so uh that's what the Russians Rockets there's a there's a whole right there's a whole industry collecting rocket Parts by the way out there in kazakstan it's always Kazakhstan too right well yeah no I mean no they have they have a launch site in petk as well um but um you know basically the Siberian steps collectively right um and uh but but the you know all the other like the European Rockets and the uh boing and locki Rockets they all all of their stages basically just smash the bits and land they're somewhere at the bottom of the ocean um and uh so what we were trying to do was to uh land uh land land our rocket stage but it's a very difficult thing because this thing is coming in from Hypersonic velocity it's got to do multiple relights of of the the main engine it's got attitude control thrusts it's got slash baffles it's got um you know and it's got a and it's got these Hypersonic grid fins right this is extremely difficult and the point of this you want to reuse rocket uh uh you want to reuse Rockets or parts or what have you talked about the importance to be sustainable and to actually not have to consistently redo equipment for these launches and and I suspect that that was at least one goal you had in trying to land this thing safely right yeah yeah so um I mean in in in the sort of Rocket industry this is considered kind of crazy uh so and and like you know very unlikely to succeed right um I certainly agree with the very unlikely to succeed right you know thing but but as it turns out we were able to to actually hit the Drone ship um yeah it was a sort of a higher velocity bumpy Landing Landing than right uh yeah it's a what we call a a rud as a rapid unscheduled disassembly right um so I like your acronym it almost sounds good actually right yeah it's technical term yeah right um well you're pretty chill about it I think that's good um yeah but but I think we've got a decent chance of of Landing it uh intact on one of the the later missions this year so and you're going to try again soon right yeah in in about three or four weeks we've got another flight yeah um so so so now this is actually it's a tougher re-entry uh condition like it's coming in hotter harder and faster than the last flight so so that does throw a little bit more of a it's a little makes a little trickier yeah um but we've got 50% more uh hydraulic fluid which was the we ran out of hydraulic fluid uh last time so I think we we shouldn't if if we we may fail The Landing again but hopefully for a different reason um and um but the point is you're trying again you're not you're not particularly put off by the first result and let's see what happens I expected it to fail you did you expected it to fail you went into it thinking it might fail yeah no I said I said I think we've got a best of 50% chance W and even that I said I'm kind of making that up you know I don't really know yeah pretty good yeah good good guess um we're gonna have to go to questions Mr musk because we um we started a little late uh and I've got some Twitter questions here that I'll be asking from the stage but I want to ask you something as it relates to the bach chica fa facility we are at the beginning of a legislative session and there are many issues before people in this room and one of them relates to business incentives economic incentives offered to businesses to locate in Texas this has been a Hallmark of the Perry era now about to end as Governor he's been very successful in growing the economy in part by luring businesses here and there have been economic incentive funds that have done so you received more than1 15 million from the state and another $5 million from the city or Brownsville or from a city organization actually received that money well but it was offered to you but the but the point is it was offered to you and there was a lot of discussion that incentives were offered to get you to come here at the time how important were those incentives for you to come to Texas the incoming Lieutenant Governor Dan Patrick said during his campaign that he thought we ought to get rid of all incentives not menend them end them so what is your message to the Texas legislature as it relates to business incentives used to lure companies like SpaceX here here well I mean I I think uh the way to look at look at it is like more like um like you're you're like a landlord you know or or you're like a and you're looking for anchor tenants and you're making decisions try you're trying to make a decision of like um if if we bring this company or this facility to Texas is it going to be a net gain for the state or is it not um sometimes you'll be right about that sometimes wrong right um it's important to structure any incentives such that it's a a guaranteed win for the state um and in the case of the incentives for um the the bik facility we have to repay those uh that that money if you don't meet certain stated benchmarks yes related to job creation yes economic impacts and all that and a lot of them are are directly tried directly tied like so we create the job that then we get on a per drop basis would you have would you have come in the absence of incentives um there are a lot the reason I asked Mr mus no I think we would not have come there are a lot of people who view those kinds of incentives the the popular phrase these days is corporate welfare there are a lot of people who say that we shouldn't be offering incentives to multi-billion Dollar companies to come to a place like Texas that money could be better spent on people who need it no we wouldn't have come because it would have been quite rude if to not have offered incentives okay very good I appreciate I appreciate your cander that's good okay there you go all right can I ask some questions yeah yeah okay good it's more like it's what I mean is that it's it's like like a state has to show that it really wants a company to to be there right um ultimately SpaceX will spend hundreds of millions of dollars on that facility vastly in excess of what the of what the incentives would be of what the incentives would be right um so how much the incentives really make a difference in actually in the monitary in the grand scheme of things not that big of a difference but but it's it's sort of like it's it's it you don't feel welcome like it doesn't feel like the state really cares unless it does something right they've got to have a little skin in the game there's got to be a little skin in the game um there's got to be some contribution yep you know got it that's that's really what it is let's use the time we have left to ask some questions and I know that the people who are keeping time for this will tell me to shut up when the time comes first question could the proposed Tesla bill in the legislature open up all Direct Car sales in Texas in other words would the bill apply to companies other than Tesla and might this not be what the auto dealers fear not so much your direct car sales but Direct Car Sales that would not run through them by other companies sure well I think first of all it's like I think when when thinking when thinking about these things you have to say uh what is right like what is the origin of of this bill like why why is there the this restriction at all um and the Restriction actually originates from when a bunch of the car the big car companies tried to get back their franchises and and engaged in nefarious Behavior to do that particularly Ford under Jack Nasser so they put all these pressure tactics on the on the Cod dealer on on the on on the franchises to sell the franchises back to the the car company um and then the reaction from from the franchises uh who who had bought paid for their franchises and who had invested all this money uh they their cause was just and they went with their just cause to the legislature and said look if we have bought our franchise and we've invested our time and and and money to build this franchise it is not right for the franchise or to then uh engage in pressure tactics to to force us to sell it back to them at a fire sale price right obviously that would be you know so the cause was just but but now they T they're taking legislation that was meant for a just cause and applying it to an unjust cause which is to say that a company that has never granted them a franchise must be forced to grant them a franchise this is not right so would you be willing to stipulate if this is what was driving the auto dealers crazy the prospect that other companies would be selling direct would you be willing to stipulate in your legislation that this was a Tesla only Bill if that were even possible no I don't think it should be a teson bill that wouldn't be that wouldn't be fair uh it should it should be uh perhaps limited to new technology vehicles or uh limited to to to a certain number of stores or something like that right um I don't think it should be just for Tesla it shouldn't only be for Tesla a carbou for Tesla it shouldn't be only for Tesla and but but nor nor should it erode the franchise that they've that they've boughten paid for and have put a lot of time into got it um you know that that wouldn't be right either so it's it's it it should just be that if somebody hasn't granted them a franchise they shouldn't be forced to grant them a franchise it would be like like if Apple came here and wanted to sell computers in the same legislations that they' have to like give out Apple franchise stores or something right that wouldn't be wouldn't make any sense well the the last question we're going to have time for is actually related to this and that is to ask what has happened in fact in other states where Tesla has been allowed to sell directly what has happened to the dealerships are the predictions of are the predictions of Doom here have they been manifested in other places no I mean in in basically in in more than 40 out of 50 states uh we sell cars the the the dealers are doing fine nobody's you know in in trouble or I mean there's no no terrible thing has happened to the dealers in in any of the other states and like I said in every we currently sell in over 30 countries right and and and these franchise restrictions don't exist in any of those countries and the dealers are fine there too and the dealers are actually fine yeah absolutely and there's plenty of examples where the they franchise restaurants and company-owned restaurants or a mixture of franchise and company-owned like McDonald's has a mixture of company-owned and they have mixture and franchise stores yeah it works fine so I I think I think it's a pretty reasonable thing to ask that uh you know if we want to sell direct that we we have the right to do so and that and that you know like I said that consumers in Texas have the right to to choose how they want to buy their car right um and and I know we're running short on time but there's um there is a one sort of announcement that that I'd like to make um oh please make news go ahead we'll make time since this is the this is this is is the trans Transportation uh Forum yes um uh so uh we're going to uh create a hyper test facility um so I if people have read about this sort of it's kind of a new mode of Transport uh that it's something that you rolled out as a as a on white paper in in 2013 right yeah yeah yeah and it's it's a futuristic that sometimes is negative I don't mean it in that case a futuristic way of uh going from point to point faster safer cheaper immune to weather earthquake resistant in the case of the California plan that was proposed but it looks it looks like a very futuristic way of doing this kind of travel yeah so so in order to kind of help things along uh we're going to create a hypop test track you are yeah so something that's maybe on the order of a kind of Five Mile a five mile Loop please say it's going to be here um Texas is the leading candidate it is yes is that right okay I'm I'm liking you better already and and so does the state have to promise not to be a jerk in order to get this business there's there's no quid pro quo here uh but something it would be nice it would be appreciated it would be nice I bet I bet okay but but no when and when will all this go into production the the the the test facility will be uh begun production on that or up and running when what's the time table yeah we're uh we're just figuring that out um so I just actually discussing it with some members of my team uh last night who are pretty excited about doing this how big a project is this how much money are we talking about going into something like this uh I actually don't know but we're not asking for any money from the state um so it would be it would be entirely funded it would be entirely funded by you all uh yeah private not private public not public all private funds uh yeah um I mean somebody wants to CHP in I I won't stop them right but this is not a stock offering right up here on this AG right yeah so but but no it's it's this would be kind of a a subscale track um and the the thing we were talking about last night it's not fully formed we're just sort of figuring it out is to to have have a test facility where uh different uh um teams from you know University or or even you know little companies that people form uh could use this test track to kind of validate uh their ideas on on designing the the Pod system within the in for the hyperloop but but the test track is quite a sort of expensive Capital item it is um so if we can build a test track and then uh offer that to for use by um by by companies teams of students uh to try out their their pod design and um something that we we we might might end up doing or at least it sounded good last night after you know a couple of drinks um uh was was um your your management style was okay with me shoot from the hip yeah right um so um but but there's this really awesome competition called formula sa okay uh where where where students uh inter students work together to design uh and build uh a race car and then they they race it at the end of the season and and then whoever builds the best race car kind of wins right it's like an adult Soapbox Derby yeah but it's pretty sophisticated yeah um and but I I some of our best Engineers have come from that program and and really really learned how to do uh great engineering as a result of that and uh so I think it could be kind of fun to to have some sort of formula thing uh for for the hyper Loop pods yeah where people could compete say okay who who could make their pod go the fastest um and you know maybe compete on other dimensions and I think that could be pretty fun yeah um and uh so we're going to talk to the formal SE uh organizers and see if if they if they think this would be this would be good and okay well and and was going to repeat what you said Texas is the leading candidate to get this facility yeah yeah okay all right well that's a good place to let's get out of here before he changes his mind right okay El thank you very much thank you all very [Applause] much

Channel: The Texas Tribune

Views: 24,364

Keywords: texas, politics, legislature, tribune, news, information, election, 2014

Id: E1QRlLCN4Gc

Length: 32min 15sec (1935 seconds)

Published: Fri Jan 16 2015