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Shit Elon Says - Transcript - Opening keynote with Michael Dell and Elon Musk - Austin TX

Transcript History  

Great to see you. Thank you. You'll never guess who I picked up along the way as a hitchhiker. Yes, some hitchhiking in-fact. There was this guy who kept talking to me about 7 minute abs. I don't know what - there he is.

Well, I guess the - well, I like technology. I like doing things that have the potential to change the world in a positive way and the reasoning behind Tesla, specifically, was that there needed to be an acceleration of electric vehicles and it became clear to me that - and I think to a lot of people - that if it was simply left up to the big car companies we wouldn't see compelling electric cars. Not for a long time, and I think that became very clear in the movie Who Killed The Electric Car where GM recalled the EV1 and crushed them so no-one could get them back when California changed its regulations. That really hammered home the message that unless some new company came along and created an electric car, it'd be a long time before we would see sustainable transport.

[Was that movie part of your thought process?] It was, absolutely. I've been a proponent of electric cars for a long time. When I was in college, when I was studying physics, it seemed just very obvious that electric cars are the future and I think all transport, with the ironic exception of rockets, will go electric. It's just a question of how fast it goes electric and we have a fundamental issue right now where there is an unpriced externality or tragedy of the commons that's on a scale that I don't think the world has ever seen before. [You mean carbon.] Yeah, exactly. I think that will eventually sink in, but the problem with the carbon capacity of the oceans and the atmosphere is that it's on such an epic scale with so much inertia that the point at which, if it becomes obvious that it's a severe problem - it's like, imagine there's a supertanker coming towards you and, you know, it suddenly appears out of the fog, oh wait, supertanker coming towards me, you can't turn the supertanker real fast. It's going to keep going in that direction, so that's got a lot of inertia, and the amount of time that it'll take to switch the global industrial base to sustainable generation and consumption of energy is going to be measured in decades. So it's one of those things where you need - because the transition will take so long - you have to start early and in order to have electric cars actually sell, we have to work super hard to make the cars as compelling as possible. That's the reason, I think, why the car ended up being a great car is because we had a really dedicated team that believes in the mission.

[Question about demand for the Model-S.] At this point we're at around 600 per week, and our projections were about 400 per week. Panasonic, as our main supplier for the battery cells, was able to ramp up by 50%, but it's going to take them a little longer to improve production beyond that. I expect that our cell supply constraints will be solved, probably, around the middle of next year or maybe the second quarter but it has been good. It's been well received.

[Question about SpaceX.] I don't know if we've got the SpaceX video, that might be helpful to just - if we can cue the SpaceX video, if we can, otherwise we'll just keep talking. Oh, here we go. Okay, great. [How do you do all this?] I'm not entirely sure I have a good - I think there's some amount of good fortune involved here, and I think - I'm trying to think of, like, what is an accurate explanation here. I guess, I mean, there's certain things that I believe need to happen and I was able to convince a lot of great people to join me in trying to solve those problems. A lot of time I think people ascribe to me things where the credit is really due to a much bigger team. In fact, that's I think - the real answer is: "if you can get a group of really talented people together and unite them around a challenge and have them work together to the best of their abilities then a company will achieve great things."

[Do you ask why other people don't just try harder?] A little bit, yeah. Actually, it's more like, I think people self-limit more than they realize. I keep getting asked this question: how do you do more innovation? I think the number one thing is people should just try. Literally, just try. Like, did you try yesterday? Did you try today? It is quite - it takes a lot of mental exertion to innovate and I think it is helpful to learn about different industries and try to cross-pollinate because very often people get silo-ed in a particular industry. So, me running both Tesla and SpaceX has been helpful because I see how both industries work and I can take things from one to another. Yeah, so, I'll give you a couple of examples. One is, say, the Model-S is an all aluminum body and chassis and we employ some advanced drawing techniques and advanced casting techniques and so forth, so that's like a fairly obvious thing if you're coming from the aerospace industry. You don't see a lot of aircraft made out of steel, but cars are all almost made out of steel. In order to make the Model-S light enough to make the non-battery-pack portion of the mass light - you can get more range. The two big factors for range are - what is your aerodynamic drag and how much does the car weigh. Those are overwhelmingly the big factors for range, and so, making the car weigh less was really important, and not just for range - for handling and acceleration. So that was like an obvious thing, to make a car out of aluminum but the Model-S is, actually, the only car made out of aluminum in North America. In fact, there are very few cars made out of aluminum worldwide. The only other passenger vehicles are made in Europe, that are made out of aluminum. So that was an obvious thing to do, and on the other side, the car business is very good at manufacturing. It's actually incredible that a car, which is a super complicated object with dozens of subsystems, can actually be bought for the amount of money that it's - you know, you can get a pretty good car for $20,000. So, in taking the manufacturing techniques that were developed in the automotive industry and applying them to rocketry has been really helpful. In fact, our head of production at SpaceX came from the car industry. He used to run production of the Mini for BMW.

[Tesla was perceived to be on it's death bed.] There's some reality to that perception. It was really tight. [Were you still focusing on innovating at that point?] I think innovating to avoid death.. I think.. well, I'll tell you were things were in 2008 which was the most difficult time for Tesla as it was for many companies. In summer of 2008 we were trying to raise a financing round to take Tesla to the next level and then the financial markets fell apart, and we weren't able to raise any money at all. So, just when we needed money, we weren't able to raise any money and then you had General Motors and Chrysler which were going bankrupt, so trying to raise money for a startup electric car company in the face of General Motors going bankrupt was a very challenging endeavor. In fact, we weren't able to raise any outside money. The only choice I had was invest all the money I had left. In fact, I had to borrow money from friends for living expenses. If things didn't work out I would have been negative - essentially - but because I was willing to invest everything that I had, the other investors in the company were willing to put up the other half of the money that was needed to keep Tesla alive. Then there was a whole bunch of dramas that - skipping a bunch of drama - we were actually able to close the financing round only on the last hour of the last day where it was possible and that was 6pm, Christmas Eve, 2008. That was literally - we would have gone bankrupt a few days after Christmas.

[This was because of your faith in innovation.] I think that is probably overstating it. I thought we were probably dying. [You thought it probably won't work.] Yeah. I think it would have been irrational to have any other view. I should mention, some credit is also due to Daimler because - they became an investor in early 2009. The Daimler money was crucial to the success of Tesla, although people often think that it was the US government investment that was the lifesaver for Tesla - it was not. The government loan that we got, we only received that in - first monies were received in March of 2010, when we were actually in okay shape. The government loan was an accelerant but it was not life or death - yeah yeah - but the Daimler investment was life or death. [Are they still a good partner.] Yeah, they're great. We're coming out with the Mercedes B class, which is an all electric car. It'll be the biggest electric car program in Daimler history, in fact, bigger than the sum of all electric vehicle programs that have been done to-date. That goes into production, I believe, in March or April.

[Question about charger stations.] Yes, absolution, in fact we're now opening up supercharger, I think, every two or three days. [How many do you have now?] I don't actually have the right up to the minute count, but I think we must be approaching 50 or 60. [All over the country] and Internationally. We've got 80% of the population of Norway covered. Norway's actually our highest per-capita sales by far. [Why?] I don't know.. because Norway's so awesome, that's the reason. There's a lot of reasons but I did find it funny that sometimes people wonder if our car works in the snow and it's like, yeah, our number one sales per-capita is Norway. In fact, our number one customer lives above the arctic circle. I think he's now on 12 or something. We give him priority because he's awesome. He's a super nice guy. He's an optimologist actually and he's in this town, I think it's 15,000 people - it's called Narvik or something - and he kind of just leaves them around town so people can drive them.

[Question about the value of Tesla stock.] Well, I did think it got a little crazy there. It went up to like $22 billion market cap, which is - given that we're goingto have revenue a little over $2 billion this year - that's revenue - I'm like, this is probably a bit generous. Now, despite the fact that I said that on several occasions, when the stock did eventually correct I got a bunch of shareholder lawsuits. Like, I mean, I didn't want it to be up that high anyway, and then it dropped and then you get sued for the drop. I'm like, what? I think it's a big distraction actually. "I mean, the market is like a manic depressive." I mean, one day it's super great and then it's negative and then - it's not like the underlying fundamentals of Tesla change that much, but the instantaneous price changes a huge amount.

[Question about the future.] I think, first of all, it's worth pointing out that we're actually at what is arguably the best period of time in human history. I'm not sure what time would be better. Let me put it that way. In terms of violence per-capita in the world, we're at the lowest ever in history. You wouldn't necessarily know that reading the newspapers because - yeah, people should read Steven Pinker, he's awesome by the way. Violence is definitely lower now - it's been sinusoidal, obviously in the 20th century there was some - there was some bad moments there in the 20th century. But - violence per-capita, lowest in human history today and there's a lot of talk about income inequality and what-not, but I think we should also think about information equality. The amount of information equality that exists in the world is unbelievable, as a result of the Internet. It's really phenomenal because - if you go back, say, 30 years ago, and say well, the President of the United States probably had the most access to information of any person on Earth but today, if you have access to the Internet, you've got access to more information than the President of the United States had 30 years ago. You have access to all the world's information. You can go on Google and search for any book, any scholarly work. "Ya know, Wikipedia's actually pretty damn good. It's like 90% accurate. It's just not clear what 90%." But, it's really incredible what you can learn, and how connected you can be to people all around the world. So, I think one shouldn't ignore the negatives but I think one shouldn't ignore the positives either. I do think something needs to change about, maybe, modern media because it's like a misery microscope. A lot of the newspapers seem to be - I actually think the magazines are pretty good. The magazines are more balanced, but the - the magazines do more long form articles that are - there's still a negative bias in some magazines but it's less negative than the newspapers. Newspapers tend to be - it seems like - "a lot of the major newspapers seem to be trying to answer the question: what is the worst thing that happened on Earth today?" [It gets people's attention.] It does, and I think it does so for a fundamental evolutionary reason which is that we're trained to respond to dangerous things, but we didn't evolve to have global media. If something terrible happened in some far away part of the world that kind of triggers the negative response in our limbic system even though there's no way that actually represents a danger, at all. It's not something you should really worry about. Anyway, I think one can really have a severely negative biased view of the world reading newspapers, which is simply inaccurate.

[Question about Jeff Bezos and others buying newspapers.] Yeah, those are interesting moves. I think it's - I do think something like the Washington Post is an important institution and should be preserved and hopefully Jeff can do a good job with it. I don't totally understand the reasons for it, but I'm hopeful that it will be positive. I do think it is something we collectively should seek to address. I think to some degree it's going to be at the personal selection front where people will simply choose to get their news in ways that are not from the newspaper, unless the newspaper changes. That's the fundamental driver. It's the action of all individuals who consume news that will drive the change. I think that is already happening. I mean, I get my news from Twitter.

[Question about information gathering.] Well, uhh, I'm not sure exactly what you mean by that. The vehicles are constantly connected and so, in terms of analytical data we can see if a car has some issue that's developing so we can be proactive about servicing that issue. We don't store any sort of private information, like where someone's been or how fast they went, or anything like that. Just to be clear. We do not store how fast they drove. [You promise that?] Yes. We certainly look at things at a statistical level to see what people are doing and try to figure out how we can make the car better. I mean, that's really the reason for it. We look for data from the car, we look for feedback from customers, and we try to make the vehicle experience as compelling as possible. What really gets me excited is when people experience delight with the product. I don't think there's all that many things where you really experience delight and "if you can make the product good enough that it so far exceeds people's expectations that it just makes them happy, I think that's amazing."

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