马斯克2017州长会议纵论大局

0:08Good afternoon and welcome Elon. Oh, I was gonna take off my ties. All right if I do that

0:12I I came in with a tie, but then I was like

0:21That's good

0:24Well, thanks for having me appreciate your your being here today

0:29Hey, you know, it's when I'm with you. It's difficult to know where to start

0:34Let's start just

0:36What drives you? What is it that when you wake up in the morning, do you see a problem and you want to solve it?

0:47I think the thing that drives me is that I want to be able to think about the future and

0:54You feel good about that so

0:58That you know we're doing what we can to

1:02Have the future be as good as possible

1:06to be inspired by what is likely to happen,

1:11and to look forward to the next day.

1:16So that's what really drives me,

1:20is trying to figure out how to make sure

1:24that things are great, and I'm gonna be so,

1:27and that's the underlying principle

1:31behind Tesla and SpaceX,

1:34is that I think it's pretty important that we accelerate the transition to sustainable generation and consumption of energy.

1:45It's inevitable, but it matters if it happens sooner or later.

1:51And then SpaceX is about helping make life multi-planetary

1:58and doing what we can to continue the dream of Apollo

2:03and ultimately make contribution to life becoming multi-planetary.

2:10Let's talk a little more about that. I think everyone is very interested in that.

2:14When you say making life multi-planetary.

2:17That's exciting. It is exciting.

2:20So what's your vision there?

2:22I think particularly for Americans, you know,

2:27Like, think about America is a nation of explorers.

2:31People came here from other parts of the world

2:34that chose to give up the known in favor of the unknown.

2:41So I think exploration, like United States

2:45is a distillation of the human spirit of exploration.

2:49And so that's why it appeals to Americans so much.

2:55You can see this when, say, there was a shuttle tragedy,

2:59and seven people died.

3:00And that's terrible.

3:02But a lot of people die all the time.

3:04Why do we care so much?

3:06Because it was the dream of exploration

3:09that was dying along with those people.

3:12That's why.

3:13No, and I'm one of those that probably, like many of you,

3:15remember exactly where you were when that tragedy happened.

3:20So you have 30 plus governors here today,

3:24and we're very excited about your willingness to be with us.

3:30And you hopefully heard me talk a little bit about my initiative,

3:34which is being ahead of the curve.

3:36What do you tell us as governors?

3:38What should we be thinking about in terms of innovation

3:43and developing public policy for the future?

3:46Well, it's sure it's important to get the rules right.

3:53And, you know, sort of in terms of legislative and executive actions, you know, it's sort

4:04of like, you know, if you think of, say, like professional sports or something, if you

4:10You don't have the rules right if the game isn't set up properly, it's not going to be

4:20a good game.

4:22So it's really important to get the rules right.

4:26I think it's worth noting that I think still in the United States the rules are still better

4:31than anywhere else.

4:35But it's very easy to put something in place which is an inhibitor to innovation without

4:43realizing it.

4:46So in terms of the regulatory environment, it's always important to bear in mind that

4:55regulations are immortal.

5:00And they never die unless somebody actually goes and kills them.

5:04And then they get a lot of momentum.

5:06So a lot of times, regulations can be put in place

5:10for all the right reasons.

5:12But then nobody goes back and gets rid of them afterwards

5:14when they're no longer make sense.

5:19And there used to be a rule in the early days

5:21when people were concerned about automobiles,

5:22because that was a pretty scary thing.

5:24See a carriage just going wrong by itself.

5:26You never know what those things might do.

5:29So there were rules where you had to, in a lot of states,

5:32where you had to carry a lantern in front of the automobile.

5:36It had to be like 100 paces ahead of the automobile.

5:38There had to be someone with a lantern on a pole.

5:43I'm like, OK.

5:44But you really get rid of that regulation.

5:45And they did.

5:47So it was really awkward.

5:50So just regulations, even if done correctly,

5:56and being right at the time, it's always important to go back

5:59and scrub those periodically to make sure they're still sensible, and they're still serving

6:04the greater good.

6:06I think in terms of tax structure, what is economically incented and what is noneconomically

6:14incented, just make sure that the incentive structure is correct.

6:18I think I'm saying just totally common sense things here.

6:23But it's economics 101.

6:25whatever you incent will happen. So if you incent one thing, that thing will tend to happen more

6:33than the other thing. If you send another thing, that thing will happen. And so the economics

6:40should favor innovation. And this is particularly important to protect small to medium-sized

6:49companies because it's sort of like trying to grow a tree in a forest.

6:54Like it's real hard for a new company to grow.

6:59When it's just a seedling or a sapling, it needs a lot more protection than if it's a

7:05giant red word or something like that.

7:07So it's very important to give support to small and small to medium sized companies on the innovation

7:15front.

7:18And they're the ones that needed more than the big companies.

7:22And I think this point, Tesla's almost a big company,

7:25biggest company anyway.

7:27So I favor supporting smaller companies in Tesla,

7:33relatively speaking.

7:35What would your response be?

7:37Because there are critics out there

7:38with regard to incentives.

7:40And that's right.

7:41And Tesla has been, and I can speak from experience,

7:46the beneficiary of incentives, economic incentives,

7:51with regard to the gigafactory.

7:53Sure.

7:54What would you tell those people?

7:57Yeah, I think.

7:58Well, first of all, as you know, those incentives

8:00were a little overstated.

8:07In the case of the gigafactory, it's

8:08a $5 billion investment capital investment

8:11to get that factory going.

8:15And I didn't actually know this until we did the press conference.

8:20Actually, over 20 years, the Nevada incentives added up to 1.3 billion.

8:26I actually didn't even know this.

8:29But it's not.

8:30Now he's telling.

8:31Literally I learned to have the press conference.

8:33I'm like, really?

8:34No, but I mean, the thing is that they took what added up over 20 years and made it sound

8:41like Nevada was writing us a 1.3 billion dollar check.

8:44I'm still waiting for that track.

8:46It's much better to get lost in the mail, I don't know.

8:51So, you know, this is the way the press works, of course.

8:56So if you divide 1.3 billion by 20, then it's like, okay, Tesla's on average receives a sort

9:07of a tax.

9:09Well, it's basically sales and use tax abatement is what it amounts to.

9:17So it tells me it's like on the order we get on the order of 50 to 60 million of sales

9:22and use tax abatement over 20 years.

9:27And but this is for something which has a $5 billion capital cost just to get going and

9:34then would have to generate about $100 billion over that period of time to achieve a $1.3

9:41billion tax benefit.

9:43So essentially it's a little over 1% over that period of time, and that's great, okay?

9:52But it's not, you know, it's not like it's not the way it was characterized in the press.

10:02If, because if put in the proper context, it sounds like, okay, well, that's neat, you

10:05know, it's about 5% helpful on setting up the factory and about 1% helpful over the next

10:1220 years.

10:13Cool.

10:14That actually sounds pretty reasonable.

10:19And yeah, so that was helpful.

10:23But there are a lot of other factors as well.

10:26And we actually had slightly bigger incentive packages from some other states that were

10:31But we factored in how quickly could we get the Gigafactory into operation, what were

10:39the risks associated with that progress, what would be the logistics costs over time of transferring

10:49battery packs and power trains to a vehicle factory in California.

10:57And all of those factors weighed together is what led us to make the decision in favor

11:06of Nevada.

11:08And working with your team was great.

11:11I was very forward leaning.

11:14And a big part was also just like making sure you feel really welcome within the state.

11:23So that's sort of what would let us make the decision

11:28for the Gigafactory.

11:31And then we have another factory in New York

11:35doing solar panels.

11:37Also, actually, it will be the biggest solar panel

11:42producer in North America when it's done.

11:46And then we expect just to establish probably at least two

11:49or three more Gigafactories in the US

11:53in the next several years, as well as a couple overseas.

12:01But the overall objective of Tesla is really,

12:04what set of actions can we take to accelerate the advent

12:08of sustainable production and consumption of energy?

12:12And I think the way I would assess the historic good

12:17historic good of Tesla is in terms of how many years of acceleration was it.

12:24And if we can accelerate sustainable energy by 10 years, that would be a great success.

12:32Even if it was only five years, that would still be pretty good.

12:36That's the overarching optimization.

12:41So you've talked about interplanetary travel

12:45and sustainable energy and the vehicles a little bit.

12:50What would you want things to look like

12:54in five to 10 years associated with energy

12:58and with autonomous vehicles, electric vehicles?

13:05Well, I think things are gonna be,

13:07they're gonna grow exponentially.

13:08So there's a big difference between five and 10 years.

13:11My guess is probably in 10 years, more than a half of new vehicle production is electric

13:32in the United States.

13:35And China's probably going to be ahead of that because China's been super pro-EV.

13:39I don't think a lot of people know this, but China's environmental policy is way ahead

13:43of the US.

13:44Like, they're mandate for renewable energy.

13:47the US. I think this, sometimes people are under the impression that China is either dragging

13:53their feet or somehow behind the US in terms of sustainable energy promotion. But they're

14:01by far the most aggressive on earth. It's crazy. I mean, in fact, the coalition of Chinese

14:07car manufacturers just wrote the Chinese government to beg for them to slow down the mandate.

14:14It's like too much.

14:15They need to make 8% electric vehicles, I think, like next year or in two years or something.

14:20They can't physically do it.

14:23So China is by far the most aggressive on electric vehicles and solar.

14:30So that's a common misconception that they're not.

14:34There's one Google search way to figure this out, but it's really pretty straight, pretty

14:40easy.

14:41And in 10 years, man, I think, yeah, yeah.

14:45So half of all production, I think, will be be be be, I think almost all cars produced

14:52will be autonomous in 10 years, almost all.

14:56It will be rare to find one that is not in 10 years.

15:03That's going to be a huge transformation.

15:05Now, the thing to bear in mind though is that new vehicle production is only about 5% the

15:13size of the vehicle fleet.

15:14So you think about how long does the car truck last and they last 15 to 20 years.

15:20So before they're finally scrapped.

15:22So new vehicle production is only roughly at most 1 15th of the fleet size.

15:32So even when new vehicle production, say, switches over to electric or to autonomous,

15:39that still means the vast majority of the fleet on the roads is not.

15:42It'll take another five to ten years before that becomes the majority.

15:48The majority of the fleet becomes EV or autonomous.

15:52But if you were to say go out 20 years, a well-mingly things are electric, autonomous,

16:01So well-maintly.

16:02Fully autonomous?

16:03Fully autonomous.

16:04So no one will have to touch the steering wheel if there is one?

16:09There will not be a steering wheel.

16:1120 years?

16:14It will be like having a horse.

16:19People have horses, which is cool.

16:22So having a regular car will be like having a horse?

16:26Is that what you're saying?

16:28Yeah.

16:29Yeah.

16:30There will be people that have, you know, non-autonomous cars, like people have horses.

16:35It's just, would be unusual to use that as a mode of transport.

16:40Yes, all right.

16:42Let's talk about the energy piece and rooftop solar and storage.

16:48Yeah.

16:49So the, I mean, first of all, it's important to appreciate that the Earth is almost entirely

16:57solar powered today.

16:59And in the sense that the sun is the only thing that keeps us from being at roughly the

17:05temperature of cosmic background radiation, which is 3 degrees above absolute zero.

17:09For one for a sun would be a frozen dark ice bowl.

17:15And the amount of energy that reaches this from the sun is tremendous.

17:21It's 99% plus of all energy that Earth has.

17:28And there's this energy we need to use to run civilization, which to us is big, but

17:35compared to the amount of energy that reaches us from the sun is tiny.

17:40So it's very easy, like it actually doesn't take much.

17:44If you wanted to power the entire United States with solar panels, it would take a fairly

17:51small corner of Nevada, Texas, Utah, anywhere. It's the only need about 100 miles by 100

18:00miles of solar panels. It's probably entirely United States. And then the batteries you need

18:08to store that energy to make sure you have 24-7 power is one mile by one mile. One square

18:19That's it. I showed the graph of the image of this where this is what 100 miles, 100 miles

18:28looks like. A little square on the U.S. map. And then there's a little pixel inside there.

18:35And that's the size of the battery pack that you need to support that. Real tiny.

18:40So you talked about 20 years from now, none of us, well some people still be using horses

18:47or what would be zero?

18:50But it's so rare.

18:51So what will the energy piece look like?

18:54I mean, what will there be transmission lines?

18:56Will there be a need?

18:58Yeah, I think the...

19:00So there's...

19:02Use of energy is roughly divided into three areas.

19:08And they're more or less equal at a high level.

19:13There's about a third of energy is

19:15for transportation of various kinds, about a third is used for electricity, about a third

19:21is used for heating.

19:23So if you want to have, and then of the electricity production, call it something in the order

19:32of 10% depending upon how you count it is renewable, maybe 15% today.

19:41So that means that there's a massive amount of solar that would need to be produced and

19:46connected in order to be fully sustainable. Because fully sustainable means you're tackling

19:52transport, nonrenewable electricity generation and heating. So that means that we'll need

20:01to be a combination of utility scale solar and rooftop skips. Solar combined with wind,

20:08geothermal hydro, probably some nuclear for a while, in order to transition to a sustainable

20:18situation, which means really for the most part massive, massive growth in solar.

20:26And it's going to be important to have rooftop solar in neighborhoods because otherwise you

20:32that they'll need to be massive new transmission lines built.

20:37And people do not like having transmission lines go through the neighborhood.

20:41They really don't like that.

20:42I agree.

20:44So you want to have some localized energy production combined with utility.

20:53So what rooftop solar, utility solar.

20:57And that's really going to be the solution from a physics

21:02standpoint, that I can't see any other way to really do it.

21:05I have people talking a lot about fusion and all that,

21:09but the sun is a giant fusion reactor in the sky.

21:12It's really reliable.

21:13It comes up every day.

21:17If it doesn't, we've got bigger problems.

21:22Somebody asked me to ask you this.

21:23We talked about workforce today, but they

21:26ask me, are robots going to take our jobs, everybody's jobs in the future?

21:33How much do you see artificial intelligence coming into the workplace?

21:40Well first of all, I think on the artificial intelligence front, you know, I have exposure

21:46to the very most cutting edge AI.

21:52And I think people should be really concerned about it.

21:56I keep sounding the alarm bell, but you know, until people see like robots going down the

22:01street killing people like they don't know how to react, you know, because it seems so

22:06ethereal.

22:09And I think we should be really concerned about AI.

22:12And I think we should, this AI is a rare case where I think we need to be proactive

22:18in regulation instead of reactive.

22:21I think by the time we are reactive in AI regulation, it's too late.

22:29And normally the way regulations are set up is that a whole bunch of bad things happen.

22:33There's a public outcry.

22:37And then after many years, a regulatory agency is set up to regulate that industry.

22:42And there's a bunch of opposition from companies who don't like being told what to do by regulators.

22:50Anyway, it takes forever.

22:55That in the past has been bad but not something which represented a, you know, fundamental risk

23:05to the existence of civilization.

23:08AI is a fundamental risk to the existence of human civilization.

23:13In a way that car accidents, airplane crashes, faulty drugs, or bad food were not.

23:25They were harmful to a set of individuals within society, of course, but they were not

23:31harmful to society as a whole.

23:34AI is a fundamental existential risk for human civilization.

23:40And I don't think people fully appreciate that.

23:45It's not fun being regulated.

23:47It's not pretty irksome.

23:51But in the car business, we get regulated

23:56by Department of Transport, by EPA, and a bunch of others.

24:00And this regulatory agency is in every country.

24:04in space, we get regulated by FAA.

24:11And if you ask the average person, hey,

24:15do you want to get rid of the FAA?

24:18And just take a chance on manufacturers, not cutting

24:22corners in the aircraft, because profits were down

24:25that quarter.

24:26I was like, hell no.

24:30That sounds terrible.

24:32So I think even people who are pretty extremely

24:38like the libertarian free market, they'd be like, yeah,

24:41we should probably have somebody keeping an eye on the aircraft

24:43companies, making sure they've both a good aircraft

24:46and good cars and that kind of thing.

24:49So I think there's a role for regulators that's very important.

24:55And I'm against over-regulation, for sure.

24:58But I think we better get on that with AI in front of.

25:06And so there'll certainly be a lot of job disruption.

25:12Because what's going to happen is,

25:13Roas will be able to do everything better than us.

25:19I mean, all of us.

25:24Yeah.

25:25I'm not sure exactly what to do about this.

25:27It's like the scariest problem to me, I'll tell you.

25:38And yeah, so I really think we need to go a regulation here

25:43just to ensure the public good is served.

25:47Because you've got companies that are racing,

25:49that they kind of have to race to build AI,

25:52or they're going to be made uncompetitive.

25:58Essentially, if your competitor is raising the world AI

26:00and you don't, they will crush you.

26:03So then you're like, ah, we don't want to be crushed.

26:05So I guess we need to build up two.

26:12That's where the regulators come in and say, hey, guys,

26:14you all need to really just pause and make sure this is safe.

26:21And like when it's cool and working with it and the regulator

26:23to convince that it's safe to proceed, then you can go.

26:26But otherwise slow down.

26:29But you kind of need the regulators to do that for all

26:32the teams in the game.

26:36Otherwise the shareholders will be saying, hey, why aren't

26:38you developing AI faster?

26:43Because your competitor is.

26:44Like, OK, we better do that.

26:48Anyway, so it's like, I mean, there's like

26:52some of the 12% of jobs are transport.

26:55Transport will be one of the first things

26:56to go fully autonomous.

26:58But when I say everything, like the robots

27:00will be able to do everything.

27:03Bar nothing.

27:06Let's move back to rolling out the Model 3 this year, right?

27:11How many orders would that kind of look like?

27:17Yeah, it's going well on that front.

27:20We got, I don't know, I think if somebody orders a Model 3 today, they'd only get it

27:26probably late next year.

27:29We just, actually just ordered production.

27:31We made the first production unit last week.

27:35And the thing that is not well appreciated about cars and any kind of new technologies,

27:45how hard it is to do the manufacturing.

27:47is vastly harder to do the manufacturing by factor of 100,

27:51like 100, than to make that car, to make one of something.

27:58With maybe 50 or 60 people, we could make a prototype

28:01of practically anything in six months.

28:06Now, the manufacturing thing, we need 5,000 people

28:09to spend three years, and that's considered really fast.

28:13So, a manufacturer does this kind of S-curve, where it's excruciatingly slow at first, and

28:20then it grows exponentially.

28:24And then, people tend to extrapolate on a straight line.

28:28So if it's real slow at first, they say, oh, it's real slow, look at that.

28:31They're only going to make five cars a week forever.

28:33Like, nope.

28:34It'll be 10 cars a week, then 20 cars a week, then 40 cars a week, then 5,000 cars a week,

28:40eventually.

28:41just goes crazy fast. So we're hoping to get to something like 5,000 cars a week by the end of the year.

28:51Well, I wanted to give an opportunity for some of the governors to ask questions and perhaps some audience questions.

28:59I was told that you'd be willing to do that.

29:02So, governors, any questions for Elon? Governor Scott.

29:08Well, thank you very much.

29:10We in Vermont have partnered with Tesla in terms of a power pack in our homes.

29:17And it's for $15 a day.

29:19You can rent this for 15 years and it'll carry power as a backup generation device for 12

29:24hours.

29:25And it's been really, really interesting from my perspective.

29:29But I'm curious about vehicles and where we're going in the future or how far in the future

29:34do the cars themselves become the charging device like the roof and decklids and hood

29:43or do the batteries get so efficient that you don't need that and then you just power

29:48up for a week or something like that.

29:50Where are we going in the future with battery storage?

29:53Yeah, I think the future is just there's three legs to the stool.

29:58There's electric cars, there's a stationary battery pack and solar power.

30:04Those three things, you can have a completely sustainable energy future.

30:08That's all that's all is needed on the solve on the solar front.

30:10Like said, it's going to be a combination of rooftop solar and

30:13utility scale solar.

30:15You'll need both because of the enormous amount of electricity.

30:21And then one of the things that's that's been missing,

30:24I think up till now is having rooftop solar that looks good and

30:29isn't an, you know, that's where we got this solar glass roof.

30:34that we're developing and we're doing any different styles so that it matches the aesthetics of

30:42a particular house or

30:44it's a regional style

30:46that's I think that's actually pretty important and

30:51The conventional flat panel solos will for flat roofs and for commercial will be the way to go

31:00But yeah, and putting solar panels on the on the card itself

31:04Not that helpful because the actual subs area of the car is not very much and cars are very often indoors.

31:12And so it's the least efficient place to put solar is on the car.

31:17Just wondering about maybe a wrap of some sort, is that make any sense in the future?

31:22Like a wrap of solar around either a building made of a solar panel or a wrap of a vehicle,

31:28actually being the solar panel but being the components of the vehicle itself?

31:33I don't think so.

31:35I'll scrap that idea.

31:37It's just way better to put it on a roof, for sure.

31:43I really thought about this.

31:46I pushed my team about, isn't there some way we could do it on the car?

31:51I mean, technically, if you have some sort of transformer-like thing

31:57which will pop out of the trunk like a hard-top convertible

32:02And just like ratchet solar panels over the whole

32:06surface of the car, extending, let's put the entire, say,

32:09square footage of a parking space,

32:13provided you're in the sun.

32:15That would be enough to generate about 20 to 30 miles

32:19a day of electricity.

32:22But that is for sure the expensive, difficult way to do it.

32:28Governor Berger.

32:29So thought about it.

32:30Maybe we should.

32:32Elon, thanks for being here.

32:33With your background in payment systems,

32:36you understand the important role of security and transactions.

32:41And now that you've got...

32:42I think security is a huge concern.

32:43Like cyber security?

32:45Yes, and in the vehicles you're building now,

32:48we're incredibly complex software systems.

32:50I mean, the car is really a rolling piece of software.

32:52It is. It's like a laptop on wheels.

32:54Yes. So share with us a little bit about your thoughts

32:57on cyber security and how we protect each other.

33:01about protecting society when you got a rolling fleet of...

33:06I think one of the biggest risks for autonomous vehicles

33:10is somebody achieving a fleet wide hack.

33:15In principle, if somebody was able to hack,

33:18say all of the autonomous Teslas,

33:20they could say, I mean, just as a prank,

33:22they could say, like, Sanimal to Rhode Island.

33:24The former, across the United States.

33:28And they'd be like, well, okay,

33:30that would be the end of Tesla.

33:31And a lot of angry people in Rhode Island, that's for sure.

33:38So we got to make super sure that Fleet White Hack is basically impossible and that if

33:46people are in the car that they have override authority on whatever the car is doing.

33:52So if the car is doing something wacky, you can press a button that no amount of software

33:56can override that will ensure that you gain control of the vehicle and cut the link to

34:05the servers.

34:08So that's pretty fundamental.

34:11Within the car, we actually have, even if somebody gains access to the car, there are multiple

34:15subsystems within the car that also have specialized encryption.

34:20So the powertrain, for example, has specialized encryption.

34:24So even if some of you would gain access to the car, they could not gain access to the

34:27powertrain or to the braking system.

34:33But it is my top concern from a security standpoint that tells us making sure that fleet wide

34:39hack or any vehicle specific hack can occur.

34:42They have the same problem with cell phones.

34:47It's kind of crazy today that we live quite comfortably in a world that George Orwell

34:55would have thought was super crazy.

35:00We all carry a phone with a microphone that could be turned on really at any time without

35:06our knowledge with a GPS that knows our position and a camera and all of our personal information.

35:16We do this willingly and it's kind of wild to think that that's the case.

35:28So the phone, like Apple and Google kind of have the same challenge of making sure that

35:36can not be a fleet wide hack or a system wide hack of phones or a specific hack.

35:43So that's our tough concern.

35:48Yeah, it's gonna become bigger and bigger concern.

35:51I think Tesla's, I don't know what to have fate here,

35:54but Tesla's pretty good at software

35:57compared to the other car companies.

36:00And so I do, I think it's gonna be a bit,

36:06like an even bigger challenge for the other car companies

36:08to ensure security, yeah.

36:11Thank you.

36:12Governor Deu Guard.

36:14Thank you Governor. Mr. Musk, thank you for speaking to all the

36:17governors today. It's an honor to have you here. One question I

36:21had, we saw when gasoline prices went to three and a half

36:25dollars a gallon. There was a big jump in interest in hybrid

36:29vehicles and you saw those vehicles become very much in

36:34demand. And then as gasoline prices have fallen, you've seen a

36:38reversal of that. And I'm wondering to what extent you have a

36:42concern about the future of electric vehicles in the face of those very low prices.

36:47Can you speak to that?

36:49Well, the economics, they kind of set the slope of the curve.

36:59So there's no question in our mind whatsoever that all transport with the ironic exception

37:07of rockets will go fully electric.

37:11everything, planes, trains, automobiles, well, trains are already electric, all ships, and

37:19a bit of this question of what the timeframe is.

37:25And the economic incentive structure drives that timeframe.

37:31That's really what it amounts to.

37:38You know, there's, the big challenge is that there's an unpriced externality in the cost

37:43of fossil fuels.

37:45So, the unpriced exunality is the probably weighted harm

37:55of changing the chemical constituency

37:58of the atmosphere and oceans.

38:04Since it is not captured in the price of gasoline,

38:08it does not drive the right behavior.

38:12You know, it would be like if tossing out garbage was just free.

38:17And you know, there was no panel.

38:19You'd just do as much as you want.

38:21And like, streets would be full of garbage.

38:24So, and we regulated a lot of other things,

38:30like sulfur emissions and nitrous oxide emissions,

38:33that kind of thing.

38:33It's done a lot of good on that front.

38:36With CO2, it's tough because there's

38:37so many vested interests on the sort of fossil fuel side.

38:44And sometimes I think those guys feel like kind of hard done

38:47by because it wasn't obvious when they were creating

38:53their oil and gas companies that it would be

38:55bad for the environment.

38:56And they worked really hard to create those companies.

38:59And then they feel like, well, now they're being kind of

39:01attacked on moral grounds when they didn't originally

39:06start those companies or we'll build them up on bad moral grounds.

39:10And it is true that we can't instantaneously change to a sustainable situation.

39:16But then those guys will also fight pretty hard to slow down the change.

39:22And that's really what I think is morally wrong.

39:26Governor Bevin and then Governor Hutchinson.

39:29And we'll take a couple, and then Governor Hickenlooper, and

39:32then we'll take some audience questions.

39:34Governor Bevin.

39:35Elon, Elon, thank you for being here.

39:38Short version of the question, and then slightly longer.

39:40The short version is, do you ever feel pressure

39:44by others' expectations of you and your endeavors

39:49in light of the progress you've made thus far

39:52is the short version?

39:53And more specifically, when you look just at Tesla alone,

39:57and you look at a company with a $54 billion valuation,

40:01and seemingly by typical market metrics,

40:05no justifiable reason for that.

40:07What do you think?

40:08I'm just saying, I'm curious,

40:10I'm just in all seriousness,

40:11do you feel a concern ever that your intellect

40:16and your intellectual curiosity and your ingenuity

40:19cannot be matched by those that are trying to commercialize it?

40:23Does that ever affect how you think or decisions that you make?

40:27Well, it is actually a finer, quite tough when there are very high expectations.

40:36I try to actually tamp down those expectations as, you know, to be possible.

40:42In fact, I've gone to record several times as saying that the stock price is higher than

40:47we have any right to deserve.

40:52And that's for sure true based on where we are today and have been in the past.

40:58So the stock price obviously reflects a lot of optimism about where Tesla will be in the

41:05future.

41:06And now the thing that makes that quite a difficult emotional hardship for me is that

41:16those expectations sometimes get out of control.

41:19And I hate disappointing people.

41:23And so I'm trying real hard to meet those expectations.

41:27But that's a pretty tall order.

41:31And a lot of times, rule not really not fun, I have to say.

41:36All that less fun than me seeing.

41:46I mean, I don't ever sell any stock unless I have to for taxes.

41:51So, you know, to probably, I'm not gonna take money off the table.

41:56I'll be the last, I'm gonna down with shit.

42:00So, I'll be the last to it.

42:06But, yeah, I mean it's, I really wouldn't recommend anyone start a car company.

42:13I really wouldn't recommend it.

42:15It's not a recipe for happiness and freedom.

42:20Thanks, Governor Bevin. Governor Hutchinson.

42:24Mr. Musk, Asa Hutchinson of Arkansas, thank you for your frank observations about exploration.

42:33You know, I look at the spirit of invention and the spirit of exploration, which is really

42:39the hallmark of America. What is your comment on NASA? Its mission. I was in Congress.

42:47I supported NASA, but I always feel like it's floundering

42:50does not have the support of the American people that's needed.

42:54What's your comment on NASA's mission

42:58and what advice would you give us?

43:00Sure.

43:01Well, first of all, I should say I'm a big fan of NASA.

43:05In fact, at one point, my password was I love NASA.

43:10Literally, that was my password.

43:11And, you know, I think the, NASA does a lot of good things for which it doesn't get enough

43:25credit.

43:27And that the public, I guess, doesn't know that much about.

43:31Like, you know, most mayors of the public, they're not really into hard science, you know.

43:36It's like not, it's not the thing they're tuning in for most of the time.

43:41I love heart science, you know, but it's not that popular.

43:47So, but there's great things in terms of the telescope,

43:52like the Hubble and the James Webb and the, you know,

43:55the rovers on Mars and the, you know,

44:01the outer solar system, those are all like really great things.

44:07But to get the public excited,

44:08you got to get people in the picture.

44:10It's just a hundred times different if there are people in the picture.

44:18If there's some criticism of NASA, it's like important to remember people in the picture,

44:23if you want to get the public support.

44:29If you talk to a scientist about that, I'm like,

44:31well, where's the science in that?

44:34You're not getting it.

44:37That's not why people are giving you money.

44:39It's not that's I mean it's a little bit of the reason but the serious scientists are like people just make things more expensive

44:48Like why we have people like okay. Well, why do we have people at all?

44:52anywhere

44:55Sometimes the scientists are the ones who just don't understand

44:58even like smart people but like

45:01so you got to have something that's gonna

45:04to fire up the fire, fire people up and get them really excited.

45:09And like, I think if we had a serious goal of having a base on the moon and sending people

45:15to Mars and said, okay, this is, we're going to be outcome oriented.

45:20How are we going to do this?

45:21Okay, we got to change the way contracting is done.

45:25You can't do these like cost plus contracts, cost plus sole source contracts because then

45:31the incentive structure is all messed up.

45:33So as soon as you don't have any competition, well, okay, there's no essential urgency goes

45:39away.

45:40And as soon as you make something a cost plus contract, you're incenting the contractor

45:43to maximize the cost of the program because they get a percentage.

45:47So they never want that gravy train to end and they want to make it, and they become cost

45:52maximizers.

45:54And then you have good people engaged in cost maximization because you just gave them

45:59incentive to do that.

46:01And told them they'll get punished if they don't.

46:03That's what happens.

46:04So it's critically important that we change the contracting structure to be a competitive

46:11commercial bid, make sure that there are always two, at least two entities that are competing

46:17to serve NASA, and that the contracts are milestone based with concrete milestones.

46:25PowerPoint presentations do not count.

46:29Everything works in PowerPoint.

46:30Okay.

46:31I have a teleportation device.

46:32Look, here's my PowerPoint presentation.

46:36So milestone-based, competitive commercial contracts

46:41with competitors.

46:43And then you've got to be prepared

46:44to fire one of those competitors if they're not cutting it

46:48and recompete the rest of the remainder of that contract.

46:51And by the way, NASA's actually already done this.

46:54And they did it with the commercial cargo transportation

46:59to the space station.

47:01Then that was a case where NASA actually, I'm not

47:06if they thought it would work or not work,

47:08but they didn't have the budget to do anything else.

47:11So they're like, OK, we're going to try this competitor

47:13commercial milestone-based contracting, and it worked great.

47:18And they awarded it to two companies,

47:22to SpaceX and a company called Kistler.

47:25And SpaceX managed to meet the milestones.

47:28Kisla did not, so then NASA recompeded the remainder of the contract to orbital sciences,

47:34then orbital sciences got across the finish line. So now NASA's got two suppliers for taking

47:39cargo to the space station, and it's a great situation. Same thing for commercial crew

47:45to the space station. NASA competed that. In the commercial crew case, it's SpaceX and

47:52Boeing and it's also a good situation. So now, like, I can tell you, like the SpaceX

47:59team is like, we're going to do this before Boeing. That's for sure. And then like I

48:04read out the Boeing team, they're like, what are you going to do before SpaceX?

48:07That's good. It's a good forcing function to get things done. But that, I can't tell you

48:14how important that contracting structure is. That is nine day. There's way too much in

48:21government, which is where it's a sole source, cost plus contract.

48:29That just, again, economics 101, whatever you incent, that will happen.

48:34And people shouldn't be surprised.

48:36It's like, oh, you just, you know, said, okay, if that company manages to find some excuse

48:40to double the cost of the contract, they're going to get double the profit because they're

48:45getting a percentage.

48:46So they're going to do exactly that.

48:50They're not going to say no to requirements.

48:53So the government will come up with some set of requirements.

48:5690% of them could make a lot of sense and 10% of them will call the price of the project.

49:03For those 10% of the requirements in a cost plus contract, the contract will always say

49:09yes.

49:10There could be a future for you in government contracting at the state level.

49:14Yeah.

49:15Let's go to Governor Hickenlooper and then Governor Ducey.

49:19So, I think like most governors, I find it so refreshing to have the unbridled truth.

49:24I do suspect every time you say publicly that the stock price is higher than we have any

49:28right to believe, I'm going to guess you probably get some calls from investors suggesting

49:33that maybe you don't say that so frequently.

49:35Yeah, that's true.

49:38I wanted to go back just briefly because I think I wrote this down that you said that

49:42artificial intelligence is the fundamental existential risk facing civilization.

49:48should I get that close to the public?

49:51In my opinion, it is the biggest risk that we face

49:55as a civilization is artificial intelligence.

49:57And so to a group of leaders, what would you advise

50:01that we should, how should we be addressing something

50:03that's such a large landscape and yet obviously so important?

50:08I think that the, you know, one of the roles of government

50:11is to ensure the public good and to,

50:14that dangers to the public are addressed.

50:22So that, hence the regulatory thing,

50:24I think the first order of business would be

50:26to try to learn as much as possible.

50:29To understand the nature of the issues,

50:31to look closely at the progress that is being made,

50:34and the remarkable achievements

50:38of artificial intelligence.

50:39I mean, last year I go, which is quite a difficult game to beat, that people thought would never

50:48be beaten with by a computer.

50:52That could be like a computer would either never beat the best human player or that it

50:56was 20 years away.

50:58And last year AlphaGo, which was done by DeepMind, which is a kind of a Google subsidiary, absolutely

51:06crushed the world's best player.

51:12But now I can play at the top 50 simultaneously and crush them all.

51:21Just like that pace of progress is remarkable.

51:30And you can see more and more coming out.

51:32I grew robotics.

51:33You can see robots that can learn to walk from nothing,

51:40you know, within hours, like way faster

51:42than any biological being.

51:44But the thing that's most dangerous is,

51:54and it's the hottest to kind of wrap, kind of get your arms

52:01around because it's not a physical thing,

52:03is kind of a deep intelligence in the network.

52:09He said, well, what home could a deep intelligence

52:11in the network do?

52:12So we'll start a war by doing fake news

52:16and spoofing email accounts and fake press releases

52:20and just by manipulating information.

52:24The pen is lighter than the sword.

52:25So, I mean, as an example, I want to emphasize, I do not think this actually occurred.

52:37This is purely a hypothetical that I'm digging my grave here.

52:46But you know that there was that second Malaysian airliner that was shot down on the Ukrainian

52:53Russian water, and that really amplified tensions between Russia and the EU in a massive way.

53:03Well, let's say if you had an AI that was where the AI's goal was to maximize the value

53:11of portfolio of stocks, one of the ways to maximize value would be to go long-long defense

53:19short on consumer, start a war.

53:21And then how could I do that?

53:26Well, you know, hacking into the Malaysian Airlines aircraft routing server, a routed

53:33over a war zone, then send an anonymous tip that an enemy aircraft is flying overhead

53:40right now.

53:45Let's go to Governor Ducey and then we'll have, after Governor Ducey, we'll finish

53:52our gubernatorial questions and then two questions and we quick questions are one

53:57audience question and we'll be done. We're running short on time. Governor

54:01Ducey. Thanks Elon. I really enjoyed your comments today and as someone who has

54:05spent a lot of time in his administration trying to reduce and eliminate

54:08regulations I was surprised by your suggestion to bring regulations before we

54:14know exactly what we're dealing with with AI. You know and I've heard the

54:19example used if I were to come up with a colorless, odorless, tasteless gas that was explosive,

54:27people would say, well, you have to ban that and then we'd have no natural gas.

54:33So you've given some of these examples of how AI can be an existential threat, but I

54:39still don't understand as policymakers what type of regulations beyond slow down, which

54:44typically policymakers don't get in front of entrepreneurs or innovators?

54:52Well, I think the first order of business would be to gain insight.

54:58Right now the government does not even have insight.

55:02And I think the right order of business would be to stand up regulatory agency, initial

55:07goal, gain insight into the status of AI activity, make sure the situation is understood once

55:20it is, then put regulations in place to ensure public safety.

55:23That's it.

55:27And for sure, the company is doing AI, most of them, not mine, will squawk and say, hey,

55:34this is really going to stifle innovation blah, blah, it's going to move to China, it

55:37won't. And it won't because it has Boeing move to China.

55:44Nope. They're Boeing aircraft here. Same on cars. And so it's the notion that if you establish

55:55regulatory regime that companies will simply move to countries with lower regulatory

56:01comments is false on the face of it because none of them do. Unless it's really overbearing,

56:08but that's not what I'm talking about here. I'm just talking about, you know, making sure

56:13that there is awareness at the government level. I think once there is awareness, people will

56:21be extremely afraid as they should be.

56:27audience question. We'll take the first hand that came up right here. Thanks

56:38Elon, Inafried with Axios. Early on in this administration you had argued pretty

56:44vociferously that it was best to engage and better to be in the room than not

56:48be in the room. Then when the president decided to pull out of Paris you said

56:53that was kind of the last straw and you were gonna drop off. What drove you to

56:57that and if you were still speaking to him today what would you say to the

57:00president?

57:03Well, I thought it was worth doing, you know, trying hard to, you know, do what's worth

57:13trying.

57:14I got a lot of flack from multiple fronts for even trying.

57:18I mean, some guy ran at billboards and like, attacking me and like full page ads in the

57:26New York Times and whatnot, just for being on the panel.

57:32And in every meeting I was just trying to make the arguments

57:36in favor of sustainability.

57:39And sometimes other issues like we need to make sure

57:44that our immigration laws are not unkind or unreasonable.

57:49And did my best.

57:53And I think in a few cases I did actually make some progress

57:56which gave me some encouragement to continue.

58:01But then I just really think that the Paris Accord,

58:04man, if I stayed on the Councils,

58:07then I'd be essentially saying that that wasn't important,

58:11but it was super important,

58:14because I think the country needs to keep its word.

58:17And that's, it's not even a binding agreement.

58:24So we could always slow it down.

58:27The argument that there would be job losses,

58:30well, we could see if there are job losses before we

58:33exit the agreement.

58:34And maybe there won't be job losses.

58:35Maybe there will be job gains.

58:38But yeah, there's just no way I could stay on after that.

58:42So, you know, it did my best.

58:47All right, well, everybody, if you would please join me

58:50in thanking Elon for being here today.

58:52All right?

58:56Thank you.

59:04someone with a lantern on a pole.

59:06Well, you're like, okay, but you really get a row of that regulation.

59:10And they did, you know.

59:11I think it would really be awkward.

59:17So just regulations even if done correctly and being right at the time, it's always important

59:23to go back and scrub those periodically to make sure they're still sensible and they're

59:29still serving the greater good.

59:31I think in terms of tax structure, what is economically incented and what is not economically

59:38incented, just make sure that the incentive structure is correct.

59:42I think I'm saying just totally common sense things here.

59:48But it's economics 101.

59:50Whatever you incent will happen.

59:54So if you incent one thing, that thing will tend to happen more than the other thing.

59:59You said another thing, that thing will happen.

1:00:02And so the economics should favor innovation.

1:00:10And this is particularly important to protect

1:00:13small to medium-sized companies, because it's

1:00:17sort of like trying to grow a tree in a forest.

1:00:19Like it's real hard for a new company to grow.

1:00:23When it's just a seedling or a sapling,

1:00:26It needs a lot more protection than if it's a giant red word or something like that.

1:00:32So it's very important to give support to small and small to medium-sized companies on the

1:00:40innovation front.

1:00:43And they're the ones that needed more than big companies.

1:00:47And I think this point has almost a big company, a bigish company anyway.

1:00:52So I'd favor supporting smaller companies in Tesla, relatively speaking.

1:01:00What would your response be?

1:01:02Because there are critics out there with regard to incentives.

1:01:05And that Tesla has been, and I can speak from experience, the beneficiary of incentives,

1:01:14economic incentives with regard to the gigafactory.

1:01:19What would you tell those people?

1:01:21Yeah, I think well first of all as you know the those incentives were a little overstated

1:01:29the

1:01:31In the case the gigafactory it's a it's a five billion dollar investment capital investment to get that factory going and

1:01:40I

1:01:41Didn't actually know this into by the weather. I didn't I didn't know this until we did the press conference actually that that over 20 years the

1:01:49Nevada incentives added up to 1.3 billion

1:01:51I actually didn't even know this.

1:01:54But it's how he's telling.

1:01:56Literally alerted at the press conference.

1:01:57I'm like, really?

1:01:59No, but I mean, the thing is that they took what added up over 20 years and made it sound

1:02:06like Nevada was writing us a $1.3 billion check.

1:02:09And I'm still waiting for that check.

1:02:11So I'm not going to get lost in the mail.

1:02:14I don't know.

1:02:16So this is the way the press works, of course.

1:02:21So if you divide 1.3 billion by 20, then it's like, okay, Tesla's on average receives

1:02:30a sort of a tax.

1:02:36Well, it's basically sales and use tax abatement is what it amounts to.

1:02:42So Tesla gets like on the order, we get on the order of 50 to 60 million of sales and

1:02:47use tax abatement.

1:02:49a good afternoon and welcome, Elon, I was going to take off my ties. If I do that, I

1:03:03came in with a tie but then I was like, tell them it's a bit tight.

1:03:08Then we'll both be more comfortable.

1:03:12That's good.

1:03:13Well, thanks for having me.

1:03:15Appreciate your being here today.

1:03:21When I'm with you, it's difficult to know where to start.

1:03:25Let's start, just what drives you?

1:03:28What is it that when you wake up in the morning, do you see a problem and you want to solve

1:03:33it?

1:03:37I think the thing that drives me is that I want to be able to think about the future

1:03:42and you feel good about that.

1:03:47So that we're doing what we can to have the future be as good as possible, to be inspired

1:03:57by what is likely to happen, and to look forward to the next day.

1:04:06So that's what really drives me, is trying to figure out how to make sure that things

1:04:14is great and I'm going to be so. And that's the online principle behind Tesla and SpaceX

1:04:25is that I think it's pretty important that we accelerate the transition to sustainable

1:04:32generation and consumption of energy. It's inevitable, but it matters if it happens

1:04:39sooner or later.

1:04:41And then SpaceX for the future.

1:04:45Well, it sure is important to get the rules right.

1:04:52And in terms of legislative and executive actions,

1:05:01it's sort of like, if you think of, say,

1:05:05like professional sports or something,

1:05:07if you don't have the rules right,

1:05:08If the game isn't set up properly, it's not going to be a good game.

1:05:19So it's really important to get the rules right.

1:05:23I think it's worth noting that I think still in the United States the rules are still better

1:05:28than anywhere else.

1:05:30But, you know, it's very easy to put something in place which is an inhibitor to innovation

1:05:39without realizing it.

1:05:43So in terms of the regulatory environment, it's always important to bear in mind that

1:05:52regulations are immortal, and they never die unless somebody actually goes and kills them,

1:06:01and then they get a lot of momentum.

1:06:03So a lot of times regulations can be put in place for all the right reasons, but then nobody

1:06:09goes back and gets rid of them afterwards when they're no longer going to make sense.

1:06:14You know, and there used to be a rule in the early days when people were concerned about

1:06:18automobiles because that was a pretty scary thing.

1:06:21characters going wrong by itself. You never know what those things might do. So there were

1:06:27like rules where you had to, in a lot of states, we had to carry a lantern in front of the automobile.

1:06:33I had to be like 100 paces ahead of the automobile. It is about helping make life

1:06:39multi-planetary and doing what we can to continue the dream of Apollo and ultimately make

1:06:50contribution to life becoming multi-planetary.

1:06:53Let's talk a little more about that. I think everyone is very interested in that when you

1:06:57say make your life multi-planetary.

1:06:59Yeah, that's exciting.

1:07:02It is exciting.

1:07:04So what's your vision there?

1:07:06I think particularly for Americans, you know, like think about America is a nation of explorers.

1:07:14came here from other parts of the world that chose to give up the known in favor of the

1:07:22unknown.

1:07:24So I think exploration, like United States is a distillation of the human spirit of exploration.

1:07:34So that's why it appeals to Americans so much.

1:07:38You can see this when, say there was a shuttle tragedy, and seven people died, and that's

1:07:44terrible but you know a lot of people die all the time but why do we care so much

1:07:48because it was the dream of exploration that was dying along with those people

1:07:54that's why. No and I'm one of those and probably like many of you remember

1:07:59exactly where you were when that that tragedy happened so you have 30 plus

1:08:05governors here today and we're very excited about your willingness to be

1:08:10with us and you hopefully heard me talk a little bit about my initiative which is being

1:08:17ahead of the curve. What do you tell us as governors? What should we be thinking about

1:08:24in terms of innovation and developing public policy?