Automotive News World Congress
Questions on ElonsFAQ asked in this interview (3)
Transcript
0:00Reporter (voiceover)Jason rasidlo reporting for americajr.com Jason Rasidlo reporting from the Detroit Marriott at the Renaissance center for the 2015 Automotive News World Congress. Stay tuned for remarks from Mr. Elon Musk, CEO and Co Founder of Tesla Motors.
0:19Elon MuskAnd so I think I'm hopeful that, you know, coming here, maybe answering some questions, I can explain why I think the opportunity for electric cars is tremendous and why I think that all transport, with the ironic exception of rockets, will go fully electric.
0:39Elon MuskAnd so it's a question of when it goes fully electric and if we can make it go electric sooner, then that will be much better for the world. And we do have significant danger with fracking technology, which is I think really still at an early stage because I think fracking probably increases the accessible oil and gas in the world by perhaps a factor of 10.
1:08Elon MuskWe don't really know what the full extent of it is, but it's probably something like an order of magnitude, which means the potential harm to the climate is, is really much, much greater than it was before.
1:23Elon MuskAnd we can't rely on scarcity to drive the price of oil and gas high and have that be an adequate forcing function to move electric. So we have to figure out how to make electric cars themselves compelling without that economic forcing function of high gas prices.
1:44Elon MuskThank you. Very good.
1:46ModeratorA couple of Canadian boys talking fast cars and rockets could be better. If you were going to launch two businesses, I'm guessing the natural place to start would probably not be rockets and cars.
1:59Elon MuskYeah,
2:03Elon MuskFor sure. If you were to rank order companies to start and say what is the, what is likely to succeed and what, you know, what has the best risk adjusted return, pretty sure starting a car company, a rocket company, will be at the bottom of the list.
2:23ModeratorSo why cars and why space?
2:25Elon MuskWell, because in the case of cars, it was very important for there to be an example of an electric car that was great. Like there were no great electric cars.
2:39Elon MuskPeople thought electric cars were like a golf cart. So they were slow, didn't maneuver well, had low range or ugly, didn't have much functionality. And that's the picture that people had in their minds.
2:51Elon MuskAnd we had to show people that an electric car could be fast, sexy, handle well, long range and be a great car. And that's what we did with the Tesla Roadster.
3:00Elon MuskSo really important to sort of just break the mold to address that misperception that one couldn't make a great electric car and then to show that if you made electric car with all those attributes that lots of people would Buy it.
3:15Elon MuskBecause even after we made the car, a lot of people said, well, yeah, you've made this electric sports car, but nobody's going to buy it. So we have to show, yes, there is demand for it and the same for Model S and then with our Model 3 down the road.
3:28Elon MuskSo that is possible for the compelling long range, mass market electric car. I think that's the third part of the strategy that I outlined with my first blog post about Tesla now, almost 10 years ago.
3:45ModeratorSo you had a few people doubting you. I mean, when you go back to just a few. Just a few, just a few people. Right.
3:51Elon MuskEvery here and there.
3:53ModeratorIf we go back to 2008, you've had a couple of failed rocket launches, you've got a lot of Tesla sitting around in the garage. There are some issues there.
4:03ModeratorIn an instant, you receive funding from NASA, a huge contract from NASA for $1.5 billion, and then you also get funding for the car company. But you were at the bottom, correct?
4:14ModeratorI mean, you were.
4:15Elon MuskYeah. I think this is important to emphasize because if you look at, say, Tesla and SpaceX now and they think, they sort of think, well, maybe it was always, they were always in a healthy position.
4:24ModeratorBut it wasn't.
4:25Elon MuskNo. From the beginning, we were in really dire straits. No one would take us seriously, either the rocket company or the car company. They just thought, well, he's sort of an eccentric rich guy and he's going to lose all his money.
4:39Elon MuskAnd they told me that several times. The most common joke I heard was, how do you make a small fortune in the car business or the rocket business? And the punchline is, you thought was a large one.
4:51Elon MuskRight. So it's like, I've heard that book so many times, I would just hit them with the punchline before they had a chance to say it. The. Yeah, so.
5:01ModeratorAnd you nearly had a nervous breakdown. I mean, this is a personal.
5:04Elon MuskI'm that close to breakdown. But I did think to myself on the Sunday before Christmas in 2008, waking up on a Sunday morning thinking, I never thought I would have someone who was capable of having nervous breakdown.
5:21Elon MuskBut this is about as close as I've ever come because things were really so dire, as you alluded to earlier that year. The first three rockets had failed off our Falcon 1 vehicle.
5:36Elon MuskAnd I don't really allowed for enough money for three flights. So we had to desperately try to scrape together enough money for a fourth flight. And the. And then with Tesla, the financing round fell apart in the summer of 08 because the whole financial markets were crashing and GM and Chrysler were going bankrupt and nobody wanted to give us money.
5:56ModeratorNot an ideal time to start a car company.
5:58Elon MuskDefinitely not. I mean, try to raise money for a startup car company that's making electric cars to boot, which is like, like that sounded like stupidity Square.
6:12Elon MuskInvestors would be angry that we'd even ask them. We even asked them that would be angry about that. In fact, the only way we raised money to keep the Tesla going was that most of the existing investors agreed to fund a company.
6:31Elon MuskAnd I put all the money that I had remaining into Tesla. So it still wasn't, it was amounted to about, in total, about $40 million, 20 of which came from me.
6:43Elon MuskAnd then, and I was tapped out, had to borrow money for rent after that. And that tided us over into, for about six months to May of 2009, when Daimler invested in, in Tesla.
7:01Elon MuskAnd that diamond investment was really fundamental to the survival of Tesla. In fact, a lot of people think like some other government bailed us out or anything. That is actually not true.
7:11Elon MuskIt was the Daimler investment that saved Tesla, not government funding. The first money we got from the government ever was in March of 2010, and that was after the crisis had passed.
7:25ModeratorAnd it wasn't your intention to even that this would be profitable. I mean, you thought it was actually going to fail at some point, right?
7:31Elon MuskWell, when, or you weren't sure it was going to be that successful at the start of Tesla, when it was just in the NFU guys, I thought we maybe had a 10% chance of success.
7:46ModeratorHow do you feel now?
7:49Elon MuskWell, now I think we've got, now I think there's some degree of success is assured, but it's a question of the magnitude. So does Tesla, does Tesla become sort of a niche car maker making maybe 100,000 cars a year or something like that, which is always super tiny?
8:14Elon MuskYou know that that would be. Yeah, I mean, 0.1% of market share. I think that's the definition of a niche. If you're 0.1%, you have to at least get past the decimal point to not be a niche.
8:31Elon MuskSo that's one possible future 100,000 or,
8:36Moderatoror your stated goals of 500,000 by 2020?
8:41Elon MuskYeah, I think we'll probably aim to do more cars than that. I'm not necessarily by 2020 for the 500,000, but I think we'll probably continue past that. You'll continue past the 500,000?
8:54Elon MuskYes.
8:55ModeratorOkay, within which time? Within what kind of time frame?
9:00Elon MuskLet's say I don't know. I think we should be able to get to probably at least a few million cars in 10 years a year.
9:07ModeratorSo by 2030.
9:10Elon MuskWell, by 2025.
9:11ModeratorOh, by 2025. Okay.
9:13Elon MuskHope. We can probably get to a few million cars a year. I think we're just going to keep driving our volume as high as we can, because our mission is fundamentally to transition the world to electric cars.
9:32Elon MuskSo if we don't make a lot of electric cars, then we're not doing as much as we can now. I mean, that being said, I think most of the good that Tesla will accomplish is by sort of cutting a path through the jungle to show what can be done with electric cars.
9:54ModeratorSo you think that the industry as a whole will adopt a greater.
9:57Elon MuskYes, I think.