Here is the full transcript of Elon Musk’s Interview 2017 titled “The Future The World & Technology”
Interviewer: Well good afternoon, and welcome Elon. Oh, I was going to take off my tie. Is that all right if I do that?
Elon Musk: I came with a tie, but then I was like, tall bit with a tie, so.
Interviewer: Then we’ll both be more comfortable.
Elon Musk: Sounds good. Well thanks for having me.
Interviewer: I appreciate your being here today. You know when I’m with you, it’s difficult to know where to start. Let’s start, just what drives you? What is it that when you wake up in the morning, do you see a problem and you want to solve it?
Elon Musk: I think the thing that drives me is that I want to be able to think about the future, and feel good about that. So, that you know, we’re doing what we can to have the future be as good as possible, to be inspired by what is likely to happen, and to look forward to the next day. So, that’s what really drives me is trying to figure out, how to make sure that things are great, and going to be so. And that’s the underlying principle behind Tesla, and SpaceX, is that I think it’s pretty important that we accelerate the transition to sustainable generation and consumption of energy.
It’s inevitable, but it matters if it happens sooner or later. And then SpaceX is about helping make life multi-planetary, and doing what we can to continue the dream of Apollo, and ultimately make a contribution to life becoming multi-planetary.
Interviewer: Let’s talk a little more about that. I think everyone is very interested that when you say, “making life multi-planetary”.
Elon Musk: Yeah. That’s exciting.
Interviewer: It is exciting, so what’s your vision there?
Elon Musk: You know, I think, particularly for Americans. Think about America is a nation of explorers. People came here from other parts of the world, chose to give up the known in favor of the unknown. So I think exploration, I think United States is a distillation of the human spirit of exploration. So that’s why it appeals to Americans so much.
You can see this when there was a shuttle tragedy, and seven people died. That’s terrible, but a lot of people die all the time, but why do we care so much? Because it was the dream of exploration that was dying, along with those people. That’s why –
Interviewer: You know, and I’m one of those, that probably like many of you remember exactly where you were when that tragedy happened. So you have 30 plus governors here today, and we’re very excited about your willingness to be with us. You’ve hopefully heard me talk a little bit about my initiative, which is being ahead of the curve. What do you tell us as governors, what should we be thinking about in terms of innovation and developing public policy for the future?
Elon Musk: Well, it sure is important to get the rules right. In terms of legislative and executive actions, you know, it’s sort of like, think of say, professional sports or something, if you don’t have the rules right. If the game isn’t set up properly, it’s not going to be a good game. So it’s real important to get the rules right.
It’s worth noting that I think still in the United States the rules are still better than anywhere else. It’s very easy to put something in place which is an inhibitor to innovation without realizing it. In terms of the regulatory environment, it’s always important to bear in mind that regulations are immortal, and they never die unless somebody actually goes and kills them, and then they get a lot of momentum. A lot of times regulations can be put in place for all the right reasons, but then nobody goes back and gets rid of them afterwards, when they no longer make sense.
There used to be a rule in the early days, when people were concerned about automobiles, because that was a pretty scary thing, seeing carriages going around by itself. You know, you never know what those things might do. So there were rules in a lot of states where you had to carry a lantern in front of the automobile, and it’d have to be a hundred paces ahead of the automobile, there’d have to be someone with a lantern on a pole, like, okay. But they should really get rid of that regulation, and they did, you know. So it would really be awkward. Just regulations, even if done correctly and being right at the time, it’s always important to go back and scrub those periodically, to make sure they’re still sensible, and they’re still serving the greater good.
I think in terms of tax structure, what is economically incented, and what is non-economically incented, just make sure that the incentive structure is correct. I think I’m saying, just totally common sense things here, but it’s economics 101, whatever you incent will happen. So, if you incent one thing, that thing will tend to happen more than the other thing. You incent another thing, that thing will happen, and so the economics should favor innovation. This is particularly important to protect small to medium size companies, because it’s sort like trying to grow a tree in a forest, it’s real hard for a new company to grow.
When it’s just a seedling or a sapling, it needs a lot more protection than if it’s a giant redwood, or something like that. So, very important to give support to small to medium size companies in the innovation front. They’re the ones that need it more than big companies. I think at this point, Tesla’s almost a big company, the biggest company anyway, so I favor you know, supporting smaller companies than Tesla, relatively speaking.
Interviewer: What would your response be, because there are critics out there with regard to incentives, and Tesla has been, and I can speak from experience, the beneficiary of incentives, economic incentives with regard to the Gigafactory. What would you tell those people?
Elon Musk: Well first of all, as you know those incentives were a little overstated. In the case of the Gigafactory, it’s a five billion dollar investment, capital investment to get that factory going. I didn’t know this until we did the press conference, actually that over 20 years, the Nevada incentives added up to 13 billion. I actually didn’t know this.
Interviewer: Now he’s telling, go ahead.
Elon Musk: I learned it at the press conference, I’m like, “Really?” I mean, the thing is that they took what added up over 20 years and made it sound like Nevada was writing us a $13 billion check. You know, I’m still waiting for that check. Did it get lost in the mail, I don’t know.
But you know, this is the way the press works, of course. Now if you divide $13 billion by 20, then it’s like Tesla’s on average, receives sort of a tax. Well, it’s basically sales and use tax abatement is what it amounts to. So Tesla, we get on the order of $50 million to $60 million of sales and use tax abatement, divided over 20 years. But this is for something which has a $5 billion capital cost, just to get going, and then it would have to generate about $100 billion over that period of time to achieve a $13 billion tax benefit. Essentially, it’s a little over 1% over that period of time, and that’s great, okay, you know, it’s not the way it was characterized in the press.
Because if it’s put in the proper context, it sounds like, “Okay, well that’s neat.” It’s about 5% helpful on setting up the factory, and about 1% helpful over the next 20 years, cool. That actually sounds pretty reasonable, and yeah, so that was helpful, but there are a lot of other factors as well. And we actually had slightly bigger incentive packages from some other states that were offered, but we factored in how quickly could we get the Gigafactory into operation? What were the risks associated with that progress? What would be the logistics costs over time of transferring battery packs and powertrains to a vehicle factory in California?