Elon Musk at the 2022 Baron Investment Conference
Questions on ElonsFAQ asked in this interview (7)
Transcript
0:52Ron BaronI don't.
1:00Elon MuskYou know, there are American heroes who don't like this idea. Neil Armstrong, Gene Cernan have both testified against commercial space flight and the way that you're developing it. And I wonder what you think of that.
1:14Elon MuskI was very sad to see that because those guys are. Yeah, you know, those guys are heroes of mine. So it's really tough. When you had that third failure in a row, did you think, I need to pack this in?
1:30Elon MuskNever.
1:32Ron BaronWhy not?
1:33Elon MuskI don't ever give up.
1:43Elon MuskLiving in the.
1:50Ron BaronYou know, I'll tell you something, every time I see that clip, it chills me every single time. And I look at it a lot. So thank you very much for coming here.
2:03Ron BaronI know it's not convenient, it's not around the corner. I'm really appreciative.
2:07Elon MuskAbsolutely. Thank you for having me. I was on a red eye flight, so I, if I'm a little slower than normal, just I didn't get much
2:15Ron Baronsleep, so, you know, that's sort of my first question. Is that. So you're 51.
2:22Elon MuskYeah, no, spring. I think I'm safely not a spring chicken anymore. Late summer chicken, perhaps.
2:32Ron BaronI'm 79.
2:34Elon MuskYes, but you, I mean, you look great.
2:39Ron BaronSo you're 51 and you do 16 hour days and you work seven hours a week and you fly all over the place and you go to these meetings constantly and people constantly criticize you for everything.
2:52Ron BaronIt's amazing to me. You're changing the world and you're giving yourself. Why do you do this? So my wife says to me, why are you still working? Why are you still working?
3:00Ron BaronWhat are you doing here?
3:02Elon MuskWell, I think what I'm working on has important, has an important effect on the future. You know, in the case of Tesla, I think it's fair to say that Tesla has significantly, significantly accelerated the advent of sustainable energy.
3:21Elon MuskYou know, before Tesla, no one was doing electric cars. And now as a result of Tesla, I think almost every major car company in the world has, is going, is building electric cars and, and that's, I think that's, that's a pretty big deal.
3:38Elon MuskBut there's still a long way to go to transition the world to a sustainable energy economy. And so, so, so we still have a lot of work ahead of us at Tesla.
3:48Elon MuskBut that's, that's our goal there. And then for SpaceX I think it's important for, for the future, for the future to be exciting and for humanity's existence to be insured.
4:00Elon MuskOver the long term, I think we must become a multi planet species and a space bearing civilization. You know, I think the,
4:14Elon MuskWe're here like four and a half billion years after Earth got started, 13.8 billion years into the age of the universe. And it's only now, recently, in the last 5,000 years that we even we invented writing.
4:30Elon MuskI say date the first civilization by when we there was the first writing which was in ancient Sumeria around five or six thousand years ago. So we've basically just been here for a very brief instant, a blink.
4:49Elon MuskAll of human civilization is a blink of an eye, if there was an eye on an evolutionary time scale. So I think it's important we take the actions to ensure that the light of consciousness continues.
5:04Elon MuskBecause we should really view consciousness as a small candle in a vast darkness and it can easily go out.
5:14Ron BaronSo you have these missions and somehow whenever you have the mission and you have this vision and you are a visionary, it's somehow whatever you do, you develop other businesses.
5:27Ron BaronSo when you started SpaceX, you didn't think about satellites. When you started Tesla, you didn't think about robots. When you don't have enough people, you didn't think about robots.
5:38Ron BaronSo you didn't think about autonomous driving. And without Elon, there would not be electric cars. Nobody who makes cars wants to make electric cars. They're being forced to make them.
5:49Ron BaronIn fact, every time they sell electric car, they sell one fewer car that they make money on. And they have all that money invested in plants to make those other cars.
5:59Ron BaronSo nobody wants to have these cars except for him. And everybody thought it was going to fail. And one of the things you said is that patents are for the week.
6:10Ron BaronAnd you share your patents and with other companies, of course. On the other hand, when they get your patents, you're two or three years ahead of them.
6:21Elon MuskWell, I mean, joking about patents for the week. I think there is a role for patents. Let's say if somebody spent, if some company has spent a lot of money developing a particular medicine and had to go through the expense of stage three medical trials and then they finally get something that is approved, but where the drug itself is cheap to manufacture, then I think a patent in that case makes sense.
6:44Elon MuskOtherwise no one would go to the trouble of doing stage three medical trials. So there are definitely roles for patents. In the case of Tesla, our goal is to advance sustainable energy.
6:56Elon MuskAnd so, and we can't just do it by ourselves. We need the whole industry to go that way. So we gave them our patents for free in order to help them accelerate electric vehicles.
7:10Ron BaronSo it must be terrifying to other companies to realize that we make cars. It's $39,000 in cost of car and we're making $15,000, $16,000 in profit a car. And so we invest $7 billion and we make $15 billion a year.
7:28Ron BaronI'm sorry. Yep, at 15 rate. 15amillion cars. 15,000. 15amillion a year on a $7 million investment. Shocking. So no one else does that. And when we're, and here you're telling us how you want to make cars for $20,000 a piece.
7:48Ron BaronHow do you do that?
7:51Elon MuskWell, we've not formally announced our next car program, so I can't talk too much about our upcoming vehicle program or programs that have not been announced. But we do expect to make cars that are more affordable than the current Model 3 or Model Y.
8:13Elon MuskSo and a big factor in this is. Yeah,
8:24Elon MuskBut I think by far the biggest factor is autonomy and the, in terms of value of a car. Because right now cars get driven for about 10 or 12 hours a week, like maybe one and a half hours a day.
8:40Elon MuskAnd so but there's 168 hours a week. And so if they were autonomous, you could probably drive, the cars could drive for 50 or 60 hours. So you would see a five fold increase in the utility of the car.
8:58Elon MuskYou know, that can do autonomy. This is a really, really gigantic thing. It would also mean that there was, we wouldn't need anywhere near as many, many parking lots.
9:08Elon MuskAnd this would also be helpful for the environment because you would need far fewer cars.
9:13Ron BaronSo I misspoke. It was a 7 billion dollar investment for a plant that makes a million cars a year, that makes $15 billion a year in profits. So you invest 7 billion and you make $15 billion a year.
9:25Ron BaronWho does that? And for a plant that makes, you know, things manufacturing. And so, so the way this is accomplished is so you're doing it with casting right now and casting half of the car and you can soon cast the other half of the car and other companies.
9:44Ron BaronWhy don't they try, why don't they try to do what we're doing? In fact, one of the executives of another automobile company wanted me to introduce her to you.
9:55Ron BaronAnd you did that once at a meeting. And now she wants to come visit with her director of engineering, our plant in Austin. And I presume when I ask you, you're going to say, yeah, bring her on.
10:06Ron BaronBecause you innovate so fast, by the time anyone copies what we're doing, it's on to something else. What else is there? How when you're casting, what else is there that enables us to make it cheaper?
10:19Ron BaronAre we eliminating a lot of other parts? Are we eliminating functions? What are we doing to do that? To be. How would we sell a car that's so cheap?
10:29Elon MuskI mean, I think the full explanation, or at least an accurate explanation would take a long time because first approximation, a car is made of 10,000 unique parts and process steps.
10:41Elon MuskAnd I mean Tesla is really, I think at this point probably the best at manufacturing in the auto industry, which I think nobody was expecting probably in
10:54Ron Baronthe history of the world.
10:56Elon MuskProbably.
11:01Elon MuskYeah. So. Well, I've got this like first principles algorithm that I find to be very helpful in the design and manufacturing of anything and people here may find it helpful.
11:23Elon MuskThe first thing you should do is make the requirements that you've been given less dumb. Whatever constraints and requirements were given, they were to some degree dumb. And you want to make them less dumb.
11:37Elon MuskIf you don't do the start with this, then you can you answer the right, you get the right answer to the wrong question. And the requirements must be given from a person who can explain the requirement, not from a department because then you don't know who to talk to.
11:57Elon MuskThen step two is delete the part or delete the process step. This sounds extremely obvious and yet over and over again we have found that parts were not needed.
12:11Elon MuskThey were just put in there just in case or by mistake or there was a step that people, someone thought was needed but was not actually needed. This sounds insanely obvious, but we've deleted so many parts from the car that were did nothing.
12:29Ron BaronThey were just there.
12:30Elon MuskWell, yeah, I mean I can give you some, so many examples. One example was there were three fiberglass mats on top of the battery pack. They partially covered the battery pack.
12:46Elon MuskAnd I was on the battery pack production line and it was the number one thing choking battery pack production. Gluing on these three fiberglass mats to the top of the battery pack.
12:58Elon MuskAnd so, so, so this is the reason I repeat this algorithm myself, is that I first did things backwards. First I try to automate it, then I try to accelerate it, just have the skill faster.
13:13Elon MuskThen I try to simplify it and only then did I delete it because it turned out that the, the team at Tesla that does noise and vibration minimization. So making, making the car quiet thought that the fiberglass mats were there because of the battery safety team for battery fire prevention.
13:41Elon MuskAnd then I asked the battery fire prevention team what were they needed for and they said, oh, noise and vibration. I'm like, okay. So then we had two cars drive one with a microphone in the car in each car and you could not tell the difference.
14:00Elon MuskSo we went to all that trouble for a part that should not exist. And then another example was there was a. Again, this was like these were choke points in the entire production system.
14:12Elon MuskThat's why they, you know, I'm running around the production line trying to fix the production line just like a maniac sort of Tasmanian devil just running around the factory like a lunatic.
14:24Elon MuskAnd let's see, we have the. The body production line of Model 3 was at 1 point stuck because we had a laser welding cell to weld a small cross car beam in the passenger footwell of the, of the front seats.
14:41Elon MuskAnd I'm looking at this, this sort of this beam and I'm like, what the heck does that do? Because the entire factory stopped trying to put, trying to get the laser weld cell to work.
14:54Elon MuskAnd I'm like, I can't imagine what a useful thing it could do. And then the production team said, oh, that's for crash safety. So then I called the crash safety team and said, is this for crash safety?
15:05Elon MuskThey said, oh no, that didn't do anything. We should delete. Turned out to be totally useless. They forgot to tell the production team, Honestly, a bunch of these things just feel like you're living in a Dilbert cartoon.
15:23Elon MuskOh no, what's our. I mean, in any given company. They said, what's your Dilbert ratio? Okay, it's not zero.
15:32Ron BaronSo is this you or is this your Gilbert question?
15:35Elon MuskTry to keep it low.
15:37Ron BaronSo is this you or is this. So you do all these different things here?
15:41Elon MuskOh, that's literally me. So do you have someone else who did this? I was living in the factory in Fremont and the one in Nevada for three years straight.
15:53Elon MuskThat was my primary residence. Not kidding, literally.
15:57Ron BaronDid you keep the couch?
15:59Elon MuskI actually stepped on a couch at one point on a, in a tent on the roof. And then for a while there I was just sleeping under my desk, which is out in the open in the factory for an important reason.
16:14Elon MuskAnd it was damn uncomfortable sleeping on that floor. And always when I woke up, I'd smell like metal dust.
16:19Ron BaronWe went to visit and they bought him a new couch.
16:23Elon MuskYeah, but actually I stopped using the couch because it was a little conference traffic room and a couch there. I stopped using the couch I just left on the floor under my desk.
16:31Elon MuskSo the. So during shift change, the entire team could see me. That's important because like, you know, the team, like, if they think like the sort of their leader is off somewhere having a good time, you know, drinking Mai tais on a tropical island, which I could definitely have been doing and would much have preferred to do, I'm not actually a masochist, I think.
17:01Elon MuskBut the thing is that since the team could see me sleeping on the floor during shift change, just with nothing, they knew I was there and that made a huge difference.
17:16Elon MuskAnd then they gave it their all.
17:18Ron BaronSo the focus is on always lowering cost and providing leadership. And this company, we're doing a million and a half cars a year, but you expect to do 20.
17:33Ron BaronAnd so what happens in 10 years if you're not there? What happens in five years if you're not there? How's that work? I mean, are there all these people.
17:42Ron BaronSo at all the engineering schools, the top engineering schools, the top choice of where everybody wants to work is Tesla, SpaceX, those two places. So do we have all these people coming up and fighting each other for the job or they're working together.
17:58Ron BaronHow do you get people to say, gee, I could buy that real expensive house, but I'm not going to do that. Boy, I could buy, I could go on vacation, I'm not going.
18:06Elon MuskWe do have that problem a little bit. So, you know, as a company has prosperity and then people become wealthy, then for a lot of people, you know that once they become sort of independently wealthy, they just can't bring themselves to work or they just don't want to work.
18:27Elon MuskAnd that's totally, you know, understandable. I have no judgment. And so, I mean, I have a lot of friends who are extremely talented and they had some success earlier in life and they just decided, you know, that was enough trauma.
18:44Elon MuskI mean, you know, one of my good friend of mine saying, like, for starting a company is like eating glass and staring into the abyss. So my people tell me, like, what can you do to encourage entrepreneurs to start companies?
19:03Elon MuskI'm like, if you need encouragement, don't start a company.
19:18Ron BaronIn SpaceX. And so we have, you know, competitors, sort of, I guess so sls. And you know, I read about. That's not. Yeah, just, just Boeing, Northrop and Lockheed.
19:38Ron BaronAnd with those guys, when they build the launching pad, it took them like 10 years and billions of dollars and we had to build a launching pad and it cost a few hundred million dollars and did it in six months.
19:52Ron BaronAnd then I was interested in how that was done. And the woman I'm talking to says that Ron, did you see the plumbing when you went there? I said why should it cost hundreds of million dollars?
20:03Ron BaronIt looks like landing field. And I said would you see what's underneath? Did you see the plumbing? I said no, they didn't show that to me. And she said well you should be aware that there's all these pipes that take away the heat and then they all deliver fuel to the rocket and it has to be there in the exact right amount at the exact right time.
20:22Ron BaronAnd if it's not, that doesn't happen, it blows up. And so I said well how does Elon know this? And because you hire these great people and then you ask them all these questions and, and then somehow you remember everything I tell you.
20:36Ron BaronIs that true?
20:38Elon MuskWell, my memory for technical matters is very good, but I think probably a lot of people don't realize what I do 80% of the time is engineering. So it's actually quite rare for me to give a talk.
20:57Elon MuskAnd my day to day work at SpaceX and Tesla is almost entirely engineering and design. So and, and, and also production, production is key but although I consider that to be part of engineering.
21:17Elon MuskYeah, so. But Starship is something special. The thing that is like the holy grail, like the critical breakthrough needed to make life multi planetary and for humanity to be a space faring civilization is a fully and rapidly reusable rocket, orbital rocket.
21:41Elon MuskAnd so we've gone most of the way there with Falcon 9. You may have seen the rocket booster come back and land and we also recover the nose cone or fairing, but we do not recover the upper stage.
21:55Elon MuskSo we've gone to the point where we're about, you know, 70 to 80% reusable with Falcon 9. With Starship we're going for 100% reusable. I cannot, it's difficult to say how profound a change this will be.
22:13Elon MuskBut a fully and rapidly reusable orbital rocket has the potential to drop the cost of access to space by a factor of 1000.
22:25Ron BaronFactor of 1000.
22:26Elon Musk1000.
22:31Elon MuskAnd I should say also Starship is, it's a very, very big rocket. It's more than twice the thrust of a Saturn V and about twice the mass. And it's also, the entire ship is designed to land propulsively so it can land to do what I did here.
22:52Elon MuskTo land on its engines, to land propulsively so it can land on any solid surface in the solar system. So if we can make starship work, then it enables us to, over time, get anywhere in the solar system.
23:08Ron BaronSo why is it so hard? Why don't other people do the same thing? Everyone says it's impossible.
23:14Elon MuskWhy is it so hard?
23:15Ron BaronAnd how much harder is it to do what we're trying to do than we're doing with Falcon?
23:20Elon MuskWell, so see, Earth's gravity is actually quite strong, and we have. We have a thick atmosphere. So with known physics, it is only barely possible to make a fully reasonable orbital rocket.
23:37Elon MuskOnly barely possible. This was a video game. The setting is extreme difficulty. Not impossible, but extreme difficulty. Because it's not like those who have developed rockets before weren't aware of reusability.
23:53Elon MuskThey were, you know, fully aware. They're fully aware of reusability, that aircraft and cars are reusable. It's just that in order for a rocket to be reusable, everything has to be perfect.
24:08Elon MuskSo you have to have exceptionally efficient engines. You have to have an exceptionally efficient structure. You need advanced avionics and software. You need a very lightweight heat shield for orbital reentry.
24:27Elon MuskAnd then another key factor for traveling to Mars is you need orbital refilling so that you get the ship to orbit and then you send up tankers to refill the ship in orbit, just like is done by the Air Force with aerial refueling.
24:46Elon MuskThose are the things that are necessary. And it's never been achieved before. There have been many attempts to achieve it, and they've all been basically, they've all failed. And they usually had canceled the program partway through once they thought it was no longer possible.
25:08Elon MuskSo it's a very difficult engineering challenge.
25:11Ron BaronSo SLS is supposed to get to the moon. They got a contract in 2010, and it was supposed to be for $10 billion, but it was quite. Cost plus is now up to $40 billion.
25:22Ron BaronAnd they say it's going to be $100 billion and $90 billion. Yeah. And we haven't gotten anything. And we have. Our rocket is 10 meters taller than theirs and we can reuse ours.
25:39Ron BaronHow can anyone possibly compete if they're not doing what we're doing? How can they compete? I don't understand. And how can they get contracts? And then I just saw something from NASA and they said that we're spending 20 billion a year.
25:54Ron BaronAnd, oh, by the way, that's 360,000 jobs in all these congressional Districts.
26:01Elon MuskWell, I think I have to be careful what I say here.
26:10Elon MuskI have enough enemies.
26:15Elon MuskI would, I would like to have, you know, I think, I think yes, I would like to have smaller, a smaller number of companies that want me to die.
26:29Elon MuskThat would be great.
26:40Elon MuskSo, but like, you know, a big part of this is like what's the goal? You know, in the case of starship, the goal is to lower the cost of access to orbit and ultimately to Mars and the moon and elsewhere.
26:56Elon MuskTo the point where humanity can actually afford to become a multi planet species. To the point where we can afford to have a permanent, permanent base on the moon and ultimately far exceed the high water mark of Apollo, which was incredible and I think inspiring to all of humanity.
27:14Elon MuskEveryone. If you were to ask people, I think almost in any country, non Americans, anyone, what was the, what was the greatest, what was humanity's greatest achievement of the 20th century, maybe ever?
27:29Elon MuskSpace? Go to the moon. And that's why they say moonshot as a metaphor because that was incredible, you know, so amazing that that was achieved. In fact, a lot of people ask me was it real?
27:46Elon MuskI'm like yeah, it was real.
27:49Ron BaronWell, it's probably on Twitter, that's where they asked that.
27:55Elon MuskYeah, I mean that was just an incredible achievement and I think it's one of those things that you know, going to the moon makes you proud to be a member of humanity.
28:09Elon MuskYou know, it's like for all mankind. You know, that's it was for all mankind.
28:16Ron BaronSo amazing achievements. And now we have this web telescope that can know, I guess the big bang was 14 billion years ago and first light is 13 and a half billion years ago and our plan is four and a half billion.
28:30Ron BaronSo, so what do we get out of this? What is the, you know, so I, I so obviously Starlink a really big deal. A trillion dollar opportunity, maybe, maybe more and maybe.
28:44Elon MuskRight.
28:45Ron BaronAnd so, so what do we get out of seeing back 13 and a half billion years? What does that do for us? What technology do we develop? We do what we know, we don't know until we do it.
28:58Elon MuskYeah, I think,
29:05Elon MuskYeah, I think like there's two, there's two main motivations I think for becoming a multi planet species and a space faring civilization and, and then ultimately going beyond that to go to other star systems and explore the galaxy.
29:25Elon MuskAnd I think we may find that there's, there's many one planet civilizations that died out millions of years ago and never made it to the second planet.
29:32Ron BaronDo you think in your lifetime this
29:34Elon Muskhappens that I well, it depends how long I live.
29:39Ron BaronMaybe forever.
29:40Elon MuskYou know, if I keep increasing that enemies list, it might not be much longer. It would be deeply ironic if it's someone angry on Twitter that takes me out.
29:55Ron BaronWell, now you keep them off Twitter.
29:57Elon MuskYeah, exactly. So anyway, I think there's. But there's two reasons for life to become more multi planetary. Life as we know it to become multi planetary. I think one is the defensive reason where we just, I think we want the, the light of consciousness to not be extinguished if something were to happen to Earth where.
30:19Elon MuskAnd, and you know, in the case of the dinosaurs, they only had to worry about like you know, meteors and super volcanoes and other things. But for us humans, we actually have the power to destroy ourselves with nuclear weapons or some sort of, you know, crazy bio terrorism thing.
30:39Elon MuskSo, you know, so there's some, there's some danger that is not zero that could cause the end of life on Earth as we know it. So that's kind of the defensive reason to ensure that life is not just and consciousness is just is not only on Earth.
30:58Elon MuskThat's the defensive reason to protect the future of consciousness then. The other big reason I think is that it's exciting and it's adventurous and it's inspiring and it makes you think positively about the future.
31:22Elon MuskLife can't just be about solving one problem or another. There needs to be reasons to be inspired, reasons that move your heart and say, yes, the future's gonna be great when you get out, when you wake up in the morning, I can't wait to see what happens next.
31:39Elon MuskAnd I think that's humanity going to Mars. Even if you don't yourself want to go to Mars. And most people don't just watch it. It's a tough gig, frankly.
31:53Elon MuskThis would not be a luxury expedition, but you'd be able to watch it happen. And I think it would just be incredibly inspiring to the world in the same way that the Apollo program was inspiring to the world.
32:06Elon MuskAnd like I said, there's got to be. Life can't just be about solving one problem or another. We need things that make us excited and inspired about the future future.
32:15Elon MuskAnd that would be one of them.
32:24Ron BaronSo let's go to Twitter just for a minute and we'll go back to this stuff, which is more interesting to me.
32:30Elon MuskI try to get out of the deal
32:34Ron Baronwere you told me, why don't you ask get out.
32:40Elon MuskI reminded that scene from the Godfather, basically.
32:42Ron BaronBut you told me you wanted to ask tough questions.
32:46Elon MuskI'll try it again.
32:52Ron BaronSo On Twitter.
32:54Elon MuskWhat could possibly go wrong?
32:59Ron BaronSo I saw this article says you bought something called Twitter and it says Musk puts off lifting Twitter bans. And so obviously the big deal in, to me anyway, in Twitter is that so we have this incredible.
33:18Ron BaronIt was incredibly poorly managed, this business, but those guys somehow did great for their shareholders by selling it to us. Right. But we didn't buy what they're selling. We bought something of what it's going to become.
33:34Elon MuskYes. I mean, I think it's most people would say, like, given how the market has evolved this year, the price is on the high side.
33:43Ron BaronRight, right. But that's on base of what it is.
33:48Elon MuskYes. But in terms of what I think there is a tremendous amount of potential that it will be very difficult to achieve, but I think possible and I think ultimately it could, could be one of the most valuable companies in the world.
34:03Ron BaronSo when we think about this, in order for that to happen, in order for that. So I met you and took me a few years and then I believe in you and your heart.
34:15Elon MuskRight, your heart. I think you were skeptical at our first meeting. You were a bit skeptical.
34:24Ron BaronSo the way I think about it is, is that. So I'm trusting you with the future of our country, of the world actually, when you're in charge of a media like that.
34:32Ron BaronAnd so what I think about is, so how do you prevent being Jewish? How do you prevent this anti Semitism or if I were black, how do you prevent all of the.
34:48Ron BaronSo how do you prevent the use of the N word? And when I think about TikTok and they're able, we're just looking at pictures to tell what you're going to do.
34:58Ron BaronYou know, you move your left arm, you move your right arm. What you other pictures you like, that's what they do with their software and they grade their algorithm.
35:06Ron BaronHow can we not have an amazing algorithm? Because we know more about than we do with TikTok and we ought to know what interest people have. And because of that, in words, we should be able to figure out words that people are using, what that means, and considering what content they're interested in, we should be able to figure out with software how to moderate this and prevent that from happening.
35:30Ron BaronIs that true or not?
35:31Elon MuskYes, absolutely. Totally agree. I want to be clear. Content moderation policies have not changed at Twitter and it is not okay to engage in hateful conduct on Twitter.
35:55Elon MuskSo we have had like actually oddly like targeted attacks where temporarily people have been able to put some hate speech on Twitter. But then it's been taken down immediately.
36:09Elon MuskSo, so now part of what I'm trying to achieve with this sort of enabling everyone to be payment verified with Twitter Blue is to try to get as many people payment verified as possible.
36:25Elon MuskIt's only eight bucks a month, although for some people that were complaining about that, and these are people who pay more than that for their lots of money.
36:33Ron BaronI'm going to be one of your Twitter bureau customers.
36:35Elon MuskThank you, thank you. But like, it's part of its revenue, part of it is payment authentication. And so if somebody, because there is a huge problem with spam and bots and trolls on Twitter and organizations trying to manipulate public opinion and just generally making the system worse.
36:59Elon MuskAnd I think, but I think that there is an answer to that, which is to, to get as many regular users of Twitter to be a subscriber for $8 a month.
37:10Elon MuskAnd you'll get a lot more than just the blue check mark for $8 a month. Because now we can afford long form video, long audio podcasts, and we can also start sharing revenue with content creators, which is essential.
37:24Ron BaronGive them a chance to make money.
37:25Elon MuskYeah, absolutely. I mean, right now if you're on Twitter, you'll see a lot of links posted to YouTube and TikTok. And that's because at least until now, Twitter has not even given them enough video length to post their video.
37:40Elon MuskAnd then they give the content creators no means of monetizing the video. So we're going to change that rapidly at Twitter. It's going to be transformative. But if we can get enough verified users and we're going to prioritize Twitter, Twitter search replies, mentions by verified users
38:00Ron Baronfirst and yeah, that's what calls amplified.
38:06Elon MuskYes. So if you're payment verified with blue checkmark, then you'll be prioritized. And so the point of this is to make crime not pay. Because. Because right now to create a bot on Twitter costs less than a penny.
38:26Elon MuskSo the cost of crime is so cheap. And that's part of why crime and hateful conduct pays. But if somebody risks losing even eight bucks, it's too expensive to now have 100,000 fake accounts because they have to spend $800,000 a month as opposed to, you know, $800 a month.
38:50Elon MuskSo, and then we also, since we're using payment authentication, we're piggybacking on the authentication system of the payment system. And we're also piggybacking off of Apple's authentication system, which is another layer of security.
39:05Elon MuskSo the net effect will be over time that the verified users will be willing to pretty much always be at the top of comments and search. And you won't really see.
39:17Elon MuskYou'll have to scroll far to see the unverified users, which will be the bots and trolls and whatnot. And this is sort of analogous to Google Search. If you go to page eight of Google Search, there will be a ton of scams and stuff.
39:36Elon MuskYou, you know, call it page eight, page nine, something like that. But the thing is that Google search results are so good for page one that you never go to page eight, so.
39:50Elon MuskOr it's rare. And like the old joke is like
39:52Ron Baronsomething we don't want to see. It gets pushed way down.
39:54Elon MuskYeah, basically the bad stuff gets pushed way down and then crime stops paying and they stop trying to do all these things and we can recruit them
40:04Ron Baronas engineers to program for us crime guys.
40:07Elon MuskYeah. So I mean, the joke is like, what's the best place to hide a dead body? Would be the second page of Google search results. Nobody ever goes there.
40:21Ron BaronSo today we fired half of Twitter and that should save us, what, 4 billion a year?
40:31Elon MuskNo, it's not going to say 4 billion a year. I wish, but. So, I mean, to be frank, Twitter was having pretty serious revenue challenges and cost challenges before the acquisition talks started.
40:47Elon MuskAnd any company that is dependent on advertising has had a hard time. So if you look at, say, Snap or, you know, Google, Facebook, whatnot, they've all had a difficult time with advertising revenue dropping.
41:04Elon MuskAnd Twitter is more, you know, currently more vulnerable than they are to advertising because most of Twitter's advertising is large brand advertising as opposed to direct response. So it's kind of like a.
41:18Elon MuskMuch more of a discretionary ad spend than it is for, for like, if you can do direct response for a specific product. So. And then we also recently had a lot of difficulty with activist groups pressuring major advertisers to stop spending money on Twitter.
41:43Elon MuskThis is despite us doing everything possible to appease them and to make it clear that moderation rules and hateful conduct rules have not changed and we're continuing to enforce them.
41:56Elon MuskA number of major advertisers have stopped spending on Twitter. So this, but this is, this doesn't seem right because we've made no change in our operations at all. And.
42:10Elon MuskBut nonetheless, the activist groups have been successful in causing a massive drop in Twitter advertising revenue and we've done our absolute best to appease them and nothing is working.
42:22Elon MuskSo this is a major concern, and I think this is frankly an attack on the First Amendment. Like if activist groups can pressure advertisers upon which Twitter is fundamentally dependent to, to suppress free speech, then that doesn't seem right.
42:50Ron BaronI meant, by the way, 400 million instead of 4 billion. I meant actually 400 million instead of 4 billion. Okay, so we're now there. You're living at this place.
43:02Ron BaronYou go there for next couple, three weeks, you need to vote. And then we have a team lined up. You think you have a team lined up to manage it and then you would just do it the same way we do with SpaceX and Tesla, where you just attend the meetings regularly, say this is what we need to do,
43:22Elon Muskdo it.
43:25Ron BaronWell, this is what we need.
43:27Elon MuskYeah, my, my workload went up from about, I don't know, 70 to eight hours a week to probably 120. So yeah, I go to sleep, I wake up, I work, go to sleep, wake up, work, do that seven days a week.
43:45Elon MuskI'll have to do that for a while. No choice. But I think once Twitter is set on the right path, I think it is a much easier thing to manage than SpaceX or Tesla.
43:58Elon MuskSo. And I, I mean I really understand the Internet and how to make. So I wrote software. Wrote software. I wrote software personally for 20 years. You know, it's one of the key people behind X.com which became PayPal.
44:21Elon MuskAnd so I also, like, I'm aware of like, I know how to make a way better PayPal.
44:29Ron BaronBecause you built PayPal?
44:31Elon MuskYeah, yeah, pretty much. I mean, with a lot of other people. But there's a product plan I wrote which I wish I'd kept a copy of in July of 2000, where I thought it would be possible to make the most valuable financial institution in the world and going to execute that plan from 22 years ago, which amazingly no one has done.
44:55Elon MuskAnd so I think that's part of why I think Twitter will be ultimately extremely valuable. Because I'm going to execute the X.com game plan from 22 years ago with some improvements.
45:15Elon MuskAnd then we're also going to obviously make Twitter just a way better system. I mean, it stands to reason that if a social media company is not taking steps to make it positive to be on that social platform, then people won't come or they'll leave, you know.
45:42Elon MuskSo you speak of sort of anti Semitism or racism or anything like that. Well, I mean, if, who's going to stay on a platform if, if that's prevalent? Like that's, that's obviously.
45:53Elon MuskYeah, I mean, come on. And apart from its inherent wrongness if who's going to stay on the platform. So, like, you, you, you want to be. It needs to be something where, like, our goal with Twitter is like, how do we get 80% of America?
46:08Elon MuskMaybe not like the sort of far left and the far right, and maybe we don't want them necessarily, but how do we get 80% of the public to join a digital town square and voice their opinion and exchange ideas and maybe once in a while change their minds on occasion.
46:28Elon MuskYeah, I mean, once in a while.
46:32Ron BaronI read also that you said, and then we'll move off of Twitter, but you said that your goal is you want to make the 20% of people who are on the far right hate you, just like you want to make the 20% of people on the far left hate you.
46:45Ron BaronSo.
46:46Elon MuskWell, I don't want them to hate me, but I think the extremists, like, you know, it's just very difficult to satisfy extremists. So unless you fully buy into whatever their dogma is.
47:01Elon MuskSo. But I'm confident we can satisfy, like, I don't know, 80% of America, 80% of the world, but maybe not the most, the 10%, most extreme of either side.
47:13Elon MuskAnd I would count that as a great outcome. And I think it is important to have sort of a digital town square where people feel comfortable talking. And I also think it's like one of the things that's important is to be able to, to sort of decide what kind of experience you want to have on Twitter.
47:33Elon MuskBecause some people might say, okay, I want the, like if this was a radio station, I want the easy listening, smooth jazz station. Okay, cool. So you should be able to have that setting for, have that setting for Twitter.
47:47Elon MuskAnd then some people might say like, no, I want heavy metal, thrash and like, okay, so now this is going to be sort of. Then you don't mind someone saying mean things to you, you know, within the context of the law and you don't mind engaging in vigorous arguments on Twitter and that kind of thing.
48:04Elon MuskBut you should be able to kind of like pick, pick your preference and decide if you want sort of full contact battle or do you want like. No, I just want to look at puppies and flowers and nice landscapes and stuff.
48:19Ron BaronSo let's go off Twitter. Two other topics. Already had some questions that, number one is logistics. When we're starting to make so many cars by the end of this year, 40,000, 40,000 cars a week.
48:38Elon MuskI mean, I have to be careful of mnpi, but I believe I have said in the past publicly that our aspiration is to reach 40,000 a week by the end the of of this year.
48:47Ron BaronSo if we're doing that then that means that producing car every 15 seconds.
48:53Elon MuskYeah.
48:54Ron BaronAnd so but that's still only 2 million cars a year. There's 100 million cars that are made a year. And so the question. So there's presumably capacity to be able to logistics to ship all these cars all over the place to have people pick them up where they want them, but not if they all do them in the same week.
49:17Elon MuskYes, totally. So I mean we had a bit of criticism, a bit of criticism from our Q3 results because we had a lot of cars in transit and the reason was that we got too big for our cars to actually be transported in the final few weeks.
49:35Elon MuskThere weren't enough car carriers and weren't enough ships. So. But it's actually good, it's actually good in the long run to, to smooth out deliveries and actually have cars in transit at the end of the quarter because then you're not rushing to get everything delivered by the end of the quarter and paying all these expedite fees.
49:55Elon MuskSo.
49:56Ron BaronSo my question though is if we have autonomous driving and we have autonomous trucks, is that one of the ideas that we're going to be able to move things around with our own if there's not enough drivers that we're going to have autonomous transport?
50:08Ron BaronYes, that's question one.
50:10Elon MuskWe can also. Yeah, I mean have. If you're in the, if you're in the area, have the car just drive to you.
50:17Ron BaronRight, that's one. And then the other one was about materials and when all of a sudden. So we have somehow navigated supply chain problems from other people and you might have thought that it was the absolute brilliance that we had to be able to do that.
50:33Ron BaronBut probably the reason is that when you start off and you don't make any cars a year and you go to someone and say we're going to make 20 million cars a year from zero, who's going to believe you?
50:44Ron BaronAnd make all the equipment that we need. So as a result of that, you were forced initially to be able to say, okay, we're going to get, you know, we'll vertically integrate.
50:54Ron BaronWe can't rely on you. We'll do vertically integration and yeah, cut it.
51:01Elon MuskMaterials. I can talk longer if you'd like.
51:03Ron BaronDon't shoot the messenger. Talk a little bit longer. Materials. So we have geology. Anyone wants to show us a mine, we got people in minds to figure who are knowledgeable and they come to us and say we can produce this much lithium, this much copper, this much.
51:21Ron BaronWe are able to assess that and give contracts to be able to say contractual agreements. Okay. And they'll. And they'll rely on our agreement. Other people, they won't. Is that fair?
51:33Ron BaronAnd Glencore the email.
51:35Elon MuskWell, the scaling constraints change as time goes by. In the beginning we were just very vertically integrated because suppliers didn't take us seriously. Like we could get hardly any of the a of the best suppliers wouldn't talk to us because the car startup has not been successful in the United States since Chrysler in the 20s, I believe they started.
51:59Elon MuskSo it's been a century since a car company was successful in the US that was not a foreign car company coming in with that was already successful in their home market.
52:07Elon MuskSo. But for an American car startup, it was the first Tesla's first success in 100 years. So you can imagine if you're an auto supplier. That doesn't sound like a smart financial decision.
52:16Ron BaronExactly.
52:18Elon MuskSo then we, we had to do just build a lot of the stuff ourselves, be vertically integrated or we couldn't. Couldn't create the car. And then that ended up being an asset because now we understood so much about the entire supply chain and what it took to build a car.
52:35Elon MuskSo we were able to design a more integrated vehicle that actually needed far fewer parts and costs less and weighs less and has higher performance. But it is looking increasingly like for some of the critical elements of batteries that Tesla will will need to get into the mining business.
52:59Elon MuskMining and refining.
53:01Ron BaronThat's why Glencore was announced. That's why we're talking to Glencore. We were.
53:05Elon MuskNo. And we've never contemplated investing at Glencore. I'm talking about Tesla doing it ourselves. Yes.
53:16Ron BaronJust time for some questions from the audience. Just give me a couple turn in the lights. Two questions. No Q and A.
53:28Elon MuskWho's there? The powers that be.
53:30Ron BaronI'll do it anyway.
53:31Elon MuskI mean, is it from me or you? I don't know.
53:35Ron BaronQuestions? So by the way, if you leave before we give away the door prizes, which are two Teslas, you're not eligible to get the Teslas, but go ahead. I gave an extra one once, I guess last time, but we're not going to do that again.
53:55Ron BaronYou got to be in your seat in order to get the Teslas. I'm paying for it. Not just. Not Elon Musk questions.
54:08Elon MuskElon Seneca once said, every genius has
54:14Ron Barona touch of madness.
54:15Elon MuskI thought you'd like that quote. Well, I agree with the madness part. So even with Tesla as a publicly traded company, I think it's down 40% or something from its high, is selling
54:31Ron Baronat 70 times earnings.
54:33Elon MuskMeanwhile, Mercedes Benz, which now produces EVs is selling for 6 times earnings and yielding 5%.
54:41Ron BaronWhy should I invest in Tesla rather than Mercedes Benz?
54:48Elon MuskWell, I actually rarely try to convince anyone to invest in Tesla and many times I've recommended people don't invest in Tesla and I've said our stock is too high, but then people just ignore me and keep buying the stock.
55:08Elon MuskSome reason. So. But if I think at a very high level, I'd say that autonomy is an insanely fundamental breakthrough. And no one is even close to Tesla for solving generalized autonomy or generalized self driving vehicles.
55:30Elon MuskNo one's even close. And with self driving, as I was talking about earlier, the car becomes, call it roughly five times more useful, but it costs the same to build.
55:44Elon MuskNow can you imagine what would happen if a company was, we're doing like 25 to 30% gross margins, but suddenly that same thing was five times more valuable. What would that do to the value of Tesla and the value of that car?
56:05Elon MuskIt boggles the mind, actually. So, you know, if you think of net present value of future cash flows, if you actually do the math on that, it's insane. Then there's also the Optimus program, which is our humanoid robot, where we'll leverage our manufacturing expertise and the intelligence we've developed for self driving to have a useful humanoid robot.
56:36Elon MuskNow, the economy is fundamentally GDP per capita times capita. If you no longer have a constraint on capita because of a useful humanoid robot, it is not clear that there is any limit to the size of the economy.
56:57Elon MuskAnd these things will actually happen. So. Okay, that's probably a good reason.
57:07Ron BaronOne more question.
57:14Ron BaronOkay, bring that to second. Okay, this is the last question.
57:26Ron BaronGo ahead.
57:29Elon MuskGiven all the cars, given all the cars that you're going to make, and I hope Ron's right, whether it's 10 million or 20 million, you're going to need a lot of charging stations around the world.
57:43Elon MuskYes. Have you thought about doing it more efficiently and more economically and better for our ecosystem from an ESG perspective? Because you may or may not know there are 400 million existing street lights in the world and every streetlight has pervasive, persistent electricity.
58:14Elon MuskYou could take some amount of those streetlights, which are half owned by utilities and half owned by cities, and repurpose that, and that would probably be the most cost efficient way to roll out millions of charging stations all over the world.
58:34Elon MuskWell thanks. I think they actually are using that idea in London and some other cities but I mean I think the long term goal for our supercharger stations is that they all have solar like Tesla solar and batteries at them so that they are as many as possible are self sustaining that the supercharger stations generate the energy during the day and then also have a localized battery pack so that people can charge at night so that the Tesla supercharging stations would continue to function even in a zombie apocalypse.
59:11Elon MuskJust never know that's coming one day we know it it's just a matter of.
59:19Ron BaronThank you very much. Can I get a selfie with you? A selfie?
59:28Ron BaronI'll post it on Twitter.
59:37Ron BaronYour arms are longer than mine also
59:40Elon Muskplease use Twitter
59:43Ron Baronwe're doing this right
59:44Elon Musknow and please subscribe to Twitter verified 8 bucks and actually it's technically at $7.99 so slightly less but I really encourage everyone here to use Twitter and you know yeah please do that here