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Shit Elon Says - Transcript - Elon Musk on Tesla in Hong Kong and China

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[How is the business doing here in Hong Kong?]

(1:28) At Tesla we're super appreciative of Hong Kong. It's the city with, I believe, the most number of Teslas per capita. It's a very exciting model in Hong Kong because I think Hong Kong will have, over time, the highest percentage of electric vehicles of any city in the world and can therefore serve as a model for how other high-density cities around the world can transform to a sustainable transport future. I think that's very exciting so we plan to work very closely with the Hong Kong government and to take lessons learned and to see what we can do then propagate that to cities around the world. So we're very excited about the partnership with Hong Kong.

[Because of the high density there's no range anxiety in Hong Kong, what are some other factors behind Tesla's popularity here?]

(2:37) Certainly the range not being an issue is one factor, although that is counterbalanced by challenges with charging. So one of the things that we need to work through- and this is a challenge that any other dense city in the world has- is, as you have more and more electric vehicles on the roads, you have to find someplace to charge them. The ideal place to charge the car is at your home or office. Essentially the same place that you'd charge your phone. But this is challenging because most apartment buildings didn't anticipate having that level of power in the garage and sometimes the parking spots float around, aren't consistent. So it's going to be quite important to get the power to the buildings that need it. And then figure out a good and convenient way for people to charge at home. We are deploying a lot of Superchargers and of course that's going to be important, but those are really meant for when you have an unusually long trip - you've been away from your home or office for a while - or you need to top up when you're out and about. But by far the most convenient is home or office charging and that's the thing that we're really working closely with the Hong Kong government on.

[Now that oil prices are falling, what does that mean for the EV industry?]

(4:21) It definitely makes the transition to sustainable energy more difficult. I think there's no doubt that that is going to dampen interest in electric vehicles in general. With our cars what we aspire to do is to make the car so compelling that, even with low gasoline prices, it's still the car you want to buy. That's the only thing I could think of. I don't know what else we could do, really.

[The fact that a Tesla IS something you would covet, environmentally-friendly or not, is a major selling point.]

(5:08) I think this is sort of general advice I would give to people starting companies, to entrepreneurs in general, is really focus on making a product that your customers love. It's so rare that you can buy a product and you love the product when you bought it. There are very few things that fit into that category. And if you can come up with something like that, your business will be successful for sure.

[China needs your technology. Do you get the sense that China's really aware of that?]

(6:10) China is definitely aware of Tesla; I've had a number of high-level meetings with the Chinese government. And in fact the minister of finance recently mentioned Tesla in a speech that he gave, as a good example. So he likes what we're doing. And then last year, in an effort to help the rest of the industry and just sort of be a good neighbor, we open-sourced all of our patents so any company in China or elsewhere can use our patents to create electric vehicles.

[Should developed countries be doing more to help developing countries, when the goal is a shared goal?]

(7:19) I agree. Although quite frankly I think that China is quite well developed. China has better highways and definitely better trains than the United States, by far. In fact I had a great experience taking the bullet train from Beijing to Xi'an to see the Terra Cotta warriors. So yeah, I think there's a lot of opportunity there. I think the challenge for Tesla in China is that we need to establish sort of a local partnership, so we're going to figure that out.

[On Beijing traffic: can Tesla autopilot provide some sort of a solution to that?]

(8:28) I think autopilot can certainly take the edge off. "Our autopilot capability right now is really good in two scenarios: either on a highway where there's no traffic and the lines are quite clear or in heavy traffic. So it's super good in heavy traffic. Not that I'd recommend it, but you can read a book or do email. Is what I've found ...err heard people say." So it can really take the edge off the traffic, but I'm actually quite a big fan of tunnels. Tunnels are so under-appreciated. The fundamental problem with cities is that we build cities in 3D. You've got these tall buildings with lots of people on each floor, but then you've got roads which are 2D. That obviously just doesn't work. You're guaranteed to have gridlock. But you can go 3D, if you have tunnels. And you can have many tunnels crisscrossing each other with maybe a few meters vertical distance between them and completely get rid of traffic problems. It's my understanding that Hong Kong is actually in the process of building some tunnels; I was very pleased to hear that. But that really is the solution for solving traffic in major cities.

[You can also go 3D with flying cars ...]

(10:11) "Flying cars sound cool, but they do make a lot of wind. And they're quite noisy. And the probability of something falling on your head is much higher."

[What are your plans with regard to the difficulty of establishing Supercharger coverage in China?]

(10:43) We actually have a Supercharging network throughout China; at this point you can go almost anywhere in China using the Tesla Supercharger network and then we've got a whole bunch of third party affiliate destination chargers. We've actually had people drive all the way from Beijing to Tibet in a Model S.

[Have you driven a Tesla in rural China?]

(11:13) Um, no. Other people have...

[What can you tell us about the Model 3. What it's going to look like...]

(11:29) I can't tell you what it's going to look like but I can tell you some general characteristics about it: it's meant to be a smaller version of the Model S. It won't have quite as many bells and whistles but it will be at a much lower price point. The intent is to roughly cut the price in half for a smaller vehicles. I think that's probably going to be the most profound car that we make. Because that's going to be a very compelling car at an affordable price.

[You welcome your rivals' competition?]

(12:25) The goal of Tesla from the beginning has been to accelerate the advent of sustainable transport. We actually did some partnerships with Mercedes and Toyota, we open-sourced our IP and everything. The whole purpose of it was really to accelerate the advent of sustainable transport, so it's always great to hear when other car companies are making electric cars.

[Are there any Chinese EV makers that are capturing your attention?]

(13:03) We don't think too much about what competitors are doing, because I think it's important to be focused on making the best possible product. Maybe analogous to if you're in a race: don't worry about what the other runners are doing. Just run.

[Are you worried about (in China) the race being tilted in favor of ... the Chinese racer?]

(13:51) I'm trying to figure out if there's any way to answer that question and not lose. [You get one pass during this interview.] I'll pass on that one.

[What is the example of 'made in China' innovation that you thought was pretty cool?]

(14:33) A lot of the social media services in China (weibo, wechat) are pretty impressive, I think better than what's in the US. [Are you on wechat?] Yeah. [Do you use it in LA?] Occasionally to correspond with people in China. But it's pretty good. I think alibabi is pretty impressive. [Do you use ...] Uh, no. But I've heard impressive things about it. [What functions do you use on wechat?] I wouldn't call myself an expert, I basically just message people. Send pictures? Send pictures and text. Can you do other things?

[There couldn't be an 'Elon Musk' in China because the education system emphasizes too much rote learning. Do you agree with that?]

(16:11) Obviously there are a number of very successful entrepreneurs in China [Jack Ma, Pony Ma ...] Yeah exactly. So I'm not sure I would entirely agree with that. But it is generally true that innovation comes from questioning the way things have been done before. If, in the education system you're taught not to do that, that will inhibit entrepreneurship. [Being able to question what you're being taught?] Yeah, well. Saying 'is there a better way?'

[Is Tesla on its way to a driver-less model?]

(17:13) Yeah, I think the whole industry ultimately will be producing autonomous cars. If you fast-forward 10, certainly not more than 15, years I think almost all cars produced will be autonomous. [All cars produced will be autonomous?] All NEW cars, yes. But that's not the same as all cars on the road. There's roughly two billion cars and trucks on the road and just under 100 million produced every year. So the production rate is only 5% of the fleet size. But if you say 'of new cars produced,' I would be surprised if a majority of them are not self-driving in 10-15 years.

[How many of these new self-driving cars will have a steering wheel?]

(18:15) I'm not sure. I think there may be some auxiliary steering wheel that only pops out whenever you need to take manual control for whatever reason, but probably if you go long long term my guess is there isn't a steering wheel in most cars. It would be something you'd have to special order. I want to be clear that predictions are not endorsements. I'm not saying that this would be a good \or a bad thing, I'm just saying that this is probably what's going to occur. It's likely. I think it's sort of like elevators have to have a manual operator and somebody would be sort of moving the lever and be able to do fine-tuned adjustments with the elevator for each floor. Now there's no manual controller for elevators. I think it's going to seem the same way for cars.

[How many consumers will choose to own their own cars versus signing into a networked fleet of driver-less cars?]

(19:29) I think probably still most people will own their own car but there will be - it's hard to predict the exact percentage - probably roughly 60-70% of people will probably want to own their own car. Call it 2/3 own 1/3 share. This is a complete shooting-in-the-dark guess, but I think still most people will want to own their own car but they also may choose to add it to the shared fleet and then take it out of the shared fleet at will.

[You don't see that as a threat to your business model?]

(20:12) No. I think just as long as make great autonomous cars, it's just adding functionality that I think people will consider quite important in a car in the future. I think that, in the long term, owning a car that does not have autonomous capability will be a bit like owning a horse. You sort of own a horse for sentimental reasons, but not for actual transport.

[Hong Kongers are concerned with Falcon Wing doors; 'can I park this in my parking garage?']

(20:59) Yeah the Falcon Wing doors are double hinged - we call them 'Falcon Wing' instead of 'gull-wing' because they have a dual acting hinge - so they can actually open in a tighter space than almost any door. And certainly a tighter space than a conventional door. If you can physically fit between your car and a Model X then you'll be able to get in Falcon Wing door.

[It (the door) looks sci-fi, it looks cool, but also serves a design purpose. What is that purpose?]

(21:41) The Falcon Wing door is designed to improve accessibility of the third row. Typically in a three-row car, in an SUV, it's quite difficult to access the third row directly. You have to fold up the second row seat; you really somehow have to move the seat back of the second row. Which, if you've got a child or child seat in the second row, can make it really inconvenient to access the third row. So by having the Falcon Wing door we have a much bigger opening that allows you to directly step to the third row quite conveniently even if there are baby seats in the second row. And then if you're a mother putting your child in the child seat in the second row it's very each because you have such a big opening and you can step into the child into the child seat instead of cantilevering your child through a hole over the baby seat. It's meant to improve accessibility. There's really only two ways to achieve that level of accessibility. One is the sliding door of a minivan, and the other is to having something like that Falcon Wing door. The reason we didn't go for a sliding door like a minivan is that it fundamentally constrains the aesthetics of the exterior of the car. You have to have three support rails which also negatively effects the aesthetics. That's why all minivans pretty much look the same. We wanted to have something that had that level of accessibility, actually greater accessibility than a minivan door, but also looks good.

[Thank you for designing for moms, for parents.]

(21:32) I think parents will really enjoy the Model X. And we're also taking good feedback from customers and, for example one of the things that was asked of some of our Hong Kong customers that have ordered the Model X, is to have a 'partial open' function of the Falcon Wing door, so if it's really heavy rain and you'd want sort of a 50/60% open level so you have a good shield from the rain. I think people will be pleased to know that that's already in the works - just a software update.

[Also in the works for a select few, a submersible Tesla!]

(24:21) That'll be ... not any time soon. That's just sort of to be a fun side project to have a submersible Tesla. But I think the market for submarine cars is quite small.

[A Tesla truck?]

(24:58) I think it's quite likely we'll do a truck in the future. [Details?] Heh, no. I think it's sort of a logical thing for us to do in the future.

[You want to try to achieve this 'platonic ideal' of a car: what does the perfect car look like?]

(25:34) I do use that phrase with our engineering and design team, 'we're in pursuit of the platonic ideal of the perfect car.' Who knows what that looks like, actually. But you want to try to make every element of the car as flawless as possible. There'll always be some degree of imperfection but try to minimize that and create a car that is just delightful in every way. I think if you do that then rest kind of takes care of itself.

[How can solar make sense in a place like Hong Kong?]

(26:35) It's true that in dense cities rooftop solar is not going to solve the energy need. What you can do is have ground-mount solar power near Hong Kong tapping into the existing power lines that are coming in. So you can supply Hong Kong with solar power; it would just need to be coming from a land area that's not too far away. China actually has an enormous land area, much of which is hardly occupied at all. Given that the Chinese population is so concentrated along the coast, once you go inland the population in some cases in remarkably tiny. You could easily power all of China with solar.

[On to SpaceX: why is Mars important, why does Mars matter?]

(28:03) I think it's really a fundamental decision we need to make as a civilization: what kind of future do we want? "Do we want a future where we are forever confined to one planet until some eventual extinction event - however far in the future that might occur - or do we want to become a multi-planet species and then ultimately be out there among the stars, among many planets, among many star systems? I think the latter is a far more exciting and inspiring future than the former. And Mars is the next natural step." In fact it's the only planet we really have a shot at establishing a self-sustaining city on. I think once we do establish such a city there will be a strong forcing function for the improvement of spaceflight technology that will then enable us to establish colonies elsewhere in the solar system and ultimately extend beyond our solar system. "So there's the defensive reason: protecting the future of humanity and ensuring the light of consciousness is not extinguished should some calamity befall Earth. But personally I find, what gets me more excited, is that this would be an incredible adventure. It'd be like the greatest adventure ever. It'd be exciting and inspiring. And there need to be things that excite and inspire people. There need to be reasons why you get up in the morning. You can't just be solving problems, it's got to be 'something great is going to happen in the future.'"

[It's not an exit strategy or a backup plan when Earth fails, it's also to inspire people on Earth and to go beyond our mental limits of what we think we can achieve.]

(29:56) Right. I mean think of how incredible the Apollo program was. If you ask anyone to name some of humanity's greatest achievements of the 20th century, the Apollo program - landing on the moon - would be in many if not most places number 1.

[When will there be a manned SpaceX mission and when will you go to Mars?]

(30:22) We're pretty close to sending crew up to the space station, that's currently scheduled for the end of next year. So that will be exciting. Then we'll have a next-generation rocket and spacecraft beyond the Falcon/Dragon series and I'm hoping to describe that architecture later this year at the International Astronautical Congress which is like the big international space event every year. So I think that will be quite exciting. In terms of me going: I don't know maybe four or five years from now maybe going to the space station would be nice. In terms of the first flights to Mars, we're hoping to do that in around 2025.

[I'm sorry .. the year 2025?]

(31:25) Yeah, nine years from now or thereabouts. [That's just around the corner!] Well, nine years ... seems like a long time to me. [Are you doing zero gravity training?] I've done the parabolic flights, those are kind of fun. [You must be reading up, doing testing, getting ready for the ultimate flight of your life?!] Ummm .. I don't think it's that hard honestly. I mean you just sort of float around. It's not that hard to float around. I do think going to Mars is definitely going to be hard and dangerous and difficult in probably every way you can imagine but certainly, if you care about being safe and comfortable, going to Mars would be a terrible choice.

[People want to be more like you ...] Really? [I think for the fate of humankind it would be great to have more Elon Musk's. So what do we need to do to become more like Elon?]

(33:21) I think it maybe sounds better than it is. Honestly, there's a friend of mine who's got a great saying about creating a company which is 'trying to build a company and have it succeed is like eating glass and staring into the abyss.' What tends to happen is it's sort of quite exciting for the first several months of starting a company and then reality sets in. Things don't go as well as planned, customers aren't signing up, the technology or the product isn't working as well as you thought, and then that concern has to be compounded by a recession and it can be very painful for several years. I think starting a company, I would advise people to have a high pain tolerance.

[Do you fear that maybe the younger generation doesn't have that perseverance and grit to take on these really tough challenges?]

(35:04) I think some people do. Maybe there are occasionally companies that get created where there's not an extended period of extreme pain, but I'm not aware of very many such instances. I do think that new great entrepreneurs are born every day and we'll continue to see amazing companies get built. But I would definitely advise people who are starting a company to expect a long period of quite high difficulty. But as long as people stay super focused on creating the absolute best product or service that really delights their end customer, if they stay focused on that, then if you get it such that if you get it such that your customers want you to succeed then you probably will. If your customers love you your odds of success are dramatically higher.

[What are the other ideas that you have that you would love to see another entrepreneur just take on and go?]

(36:49) I think there's a lot of opportunity in general in the electrification of transport. So, electric aircraft, I think here's a lot of opportunity there. I think in genetics - that's sort of a thorny area - but in terms of solving some of the more intransigent diseases, genetics are really key to solving those. Something that I think people are only beginning to look at is establishing some kind of brain/computer interface at the neuron level. Intelligence augmentation as opposed to artificial intelligence. I think that has a lot of potential.

[You mentioned yesterday, Iain Banks, 'neural lace.' This concept of wiring the brain so there could be a brain internet. And it would also mean that we could upload our thoughts to the cloud.]

(38:06) You would never forget anything. You wouldn't need to take photographs. [You would expand your ability to process and remember information, but then when the DDoS attack happens ...] Yeah you've got to watch out for hacking. That could really be awkward. [It can also be used to fight degenerative diseases like Parkinson's too.] Yeah absolutely. I think it actually would be quite an equalizer as well, because I think it would sort of even things out. [Humankind ... there would be no education disadvantage, everything would be starting at the same level, there would be no meritocracy?] There would be, but the differences would be smaller. The delta would be smaller probably. [And you really welcome that kind of world?] You asked for predictions. Predictions are not the same as preferences. Do I think that something like that is likely to occur? I think probably.


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