Speaker 1: It was a little bit.
Speaker 2: I was interested by your background. You Uh, you finished
Speaker 2: your bachelor's degree at Warden and then you stayed on
Speaker 2: an additional year and got a physics degree when I
Speaker 2: imagine almost all of your classmates went to Wall Street,
Speaker 2: so that must have must have been a pretty tough year.
Speaker 2: Did you have a vision at this point for what
Speaker 2: you ultimately wanted to achieve?
Speaker 3: Well, I, uh, yeah, there were three things in college
Speaker 3: that I thought would most affect the world, and there
Speaker 3: were the Internet, sustainable energy, and space exploration. I didn't
Speaker 3: think I'd be involved in all three of those, but
Speaker 3: as it turns out, some success in the internet right
Speaker 3: now I was able to get involved in rockets and cars,
Speaker 3: which are pretty capital intensive.
Speaker 4: And but yeah, after sort of finishing the undergrad.
Speaker 3: I I decided I didn't want to work on Wall
Speaker 3: Street or work for McKenzie or something like that, which
Speaker 3: everybody else went to walk do do. And uh, I'd
Speaker 3: taken enough sort of physics electives so that I could
Speaker 3: just spend another year and finish of physics degree and
Speaker 3: then and then heads to California to do grad studies
Speaker 3: at Stafford and material science applied physics, working on hein
Speaker 3: inch sinsity capacities for electric vehicles, and then I ended
Speaker 3: up putting that on a hold too, really dropping out
Speaker 3: going back technically, I'm justerment. Dean says, I can come
Speaker 3: back any time, but that's unlikely.
Speaker 2: So you know, with that Stanford degree, you might really
Speaker 2: do something for life exactly.
Speaker 4: Yeah, so.
Speaker 3: Did a couple of internet companies and then kind of
Speaker 3: circled back to electric cars and and then in rockets.
Speaker 1: Yeah, it's a typical story, right, So.
Speaker 2: You know, it seems like a long time ago now,
Speaker 2: but you know, I think probably you know, your entire
Speaker 2: background is very interesting, you know for us, you know,
Speaker 2: we were we were you know, we were an internet
Speaker 2: company at our at our core as well, and we
Speaker 2: came up.
Speaker 1: Really during the same period of time as PayPal.
Speaker 2: To me, one of the really interesting things about you,
Speaker 2: and that is very similar to some of the history
Speaker 2: of our company, is that you have been very willing
Speaker 2: to put your own capital and your own money into
Speaker 2: into your business. And one of the most intriguing times
Speaker 2: for me for you was two thousand and eight with Tesla,
Speaker 2: and you went in and you were not originally the CEO,
Speaker 2: you were you were the funding. You know, you were
Speaker 2: the funder and the chairman, but then you were also
Speaker 2: just you were a developer. So talk a little bit
Speaker 2: about that time and you know what it was like
Speaker 2: to have basically everything on the line.
Speaker 3: Yeah, that was that was super unpleasant, that's for sure. Yeah,
Speaker 3: basically two thousand and seven, two thousand and eight, and
Speaker 3: two thousand and nine sucked.
Speaker 4: They were really horrible.
Speaker 1: It was awesome here in Washington.
Speaker 3: So so yeah, so you know, my thought with what
Speaker 3: I had originally hoped with Tesla, I mean, was that
Speaker 3: I wouldn't that I could just dedicate enough time to
Speaker 3: do product development but then not actually run the company.
Speaker 3: So that turned out to be a false assumption, and
Speaker 3: I was sort of faced with the choice of in
Speaker 3: two thousand and eight to either run the company and.
Speaker 4: Just work a lot more, or or would die mostly
Speaker 4: you know.
Speaker 3: So, Yeah, in two thousand and eight was particularly tough
Speaker 3: on a number of number of fronts because the third
Speaker 3: launch of the Falcon one rocket for SpaceX failed. The
Speaker 3: Tesla financing round fell apart because or we kept people
Speaker 3: kept telling us that the term sheet was just around
Speaker 3: the corner.
Speaker 4: They just want to see what the market's going to
Speaker 4: do like.
Speaker 3: It was great, we were doing the same thing right,
Speaker 3: So so Tesla desperately needed money, and then Solicity had
Speaker 3: a deal with Morgan Stanley, solo lease finance deal that
Speaker 3: Morgan Stanley themselves could.
Speaker 4: Not honor because they just didn't have money.
Speaker 3: And then I was also getting divorced, So that was
Speaker 3: like just ship on every level, utter misery. And then
Speaker 3: fortunately things perked up towards the end of the year.
Speaker 3: The fourth launch of Falcon one did work. Solicity was
Speaker 3: able to get through that period by just selling solar
Speaker 3: systems instead of leasing them.
Speaker 4: It was very tough Tesla.
Speaker 3: Tesla was probably the most difficult in that time because
Speaker 3: you know, obviously General Motives and Christ they were busy
Speaker 3: getting bankrupt.
Speaker 4: And trying to raise money.
Speaker 3: Can you imagine trying to raise money for a car
Speaker 3: company in late two thousand eight while Jero's and Christs
Speaker 3: are trying to are going bankrupt, and they're like asking
Speaker 3: for examples of prior successful car companies and the last,
Speaker 3: you know, the last examples are at least you know
Speaker 3: that they're not in delivering memory, you know, So there's
Speaker 3: that Tucker, Yeah, yeah, I mean they think of Tucker
Speaker 3: and Laurian. You know, it's like I've had a buck
Speaker 3: for every time somebody mentioned Laurien. I wouldn't need to
Speaker 3: have an IPO. So yeah, that was very difficult. In fact,
Speaker 3: the only way we could raise money was internally, so
Speaker 3: from existing investors and uh, and then I had to
Speaker 3: commit all of all of my available capital to to
Speaker 3: Tesla in order to get the other investors to do
Speaker 3: the other half of the round. And that was enough
Speaker 3: to get Tesla through that point. And then a lot
Speaker 3: of people assume that the deer we saved our butt,
Speaker 3: but actually it was Daimler. So that that in early
Speaker 3: two thousand and nine, Diamler invested fifty million dollars into Tesla,
Speaker 3: which was extremely important. Teslas didn't actually get any dearing
Speaker 3: money until twenty ten.
Speaker 4: So if that was alone, correct, correct the structure.
Speaker 3: Alone, and it's it's a staggered loan. It's actually what
Speaker 3: it is is as we incur expenses, those expenses and
Speaker 3: then audited by PwC, and the portion that is applicable
Speaker 3: to the model s and to powertrain deals or powertrains
Speaker 3: supply to other companies like the powertrainsply deal, we have
Speaker 3: to dime level Toyota. That portion is then reimbursed about
Speaker 3: a month or two later, because we also got some
Speaker 3: bullshit press about like, oh, the dear Wes, you know,
Speaker 3: giving us money for the for the roads to and
Speaker 3: it's like no, it's like literally impossible for them to
Speaker 3: do that. So yeah, I made the mistake of calling
Speaker 3: some the New York Times reporter who falsely reported that
Speaker 3: knowingly falsely report that a doucheback. If somebody knowingly falsely
Speaker 3: reports something.
Speaker 1: Look the truth. Well, I'm gonna ask you a we'll
Speaker 1: go from dark to light. Here's a question.
Speaker 2: I really never thought that i'd ask someone what was
Speaker 2: it like to have a rocket fail?
Speaker 1: I mean, I mean, that sucks.
Speaker 4: It's really terrible.
Speaker 1: It was, it was, but it looked kind of cool.
Speaker 4: It did look kind of cool, just between you and me. Well,
Speaker 4: so the first one.
Speaker 1: I mean, I guess a serious question.
Speaker 2: I mean, you had to expect that there was a
Speaker 2: very high likelihood that the rocket was you know that
Speaker 2: there were kind of a lot of things that could
Speaker 2: go wrong.
Speaker 4: Yes. Yes.
Speaker 3: At the beginning, at the start of SpaceX, I thought
Speaker 3: the chance of success of the company was less than
Speaker 3: fifty percent. How are we doing now, oh, I'd say,
Speaker 3: well ninety nine percent at this point, because well, SpaceX
Speaker 3: has been profitable for four years and will be proffible year.
Speaker 3: Is three billion dollars of contracts under revenue a contract,
Speaker 3: three billion dollars in revenue under contract, even if we
Speaker 3: didn't sell any more launches, would be profitable for the
Speaker 3: next just for several.
Speaker 1: Years existing the NASA contract.
Speaker 3: Correct, Yeah, the NASA is the biggest contract. But SpaceX
Speaker 3: has over thirty launches. Thirteen of those are for NASA,
Speaker 3: so about forty percent of our businesses with NASA. But
Speaker 3: you know, if you look at the government spending as
Speaker 3: a percentage of the economy, it's about forty percent. So
Speaker 3: even if you sold pencils, about forty percent of your
Speaker 3: business would be with the government.
Speaker 1: I've lost more.
Speaker 2: And then I was like to when when when the
Speaker 2: when the fourth rocket went up and it was a
Speaker 2: successful launch, that that had to.
Speaker 3: Be kind of cool too, Yeah, that was awesome. Was
Speaker 3: it was actually more just relief. I didn't feel elation.
Speaker 3: I just felt like extreme stress relief. Yeah, I actually
Speaker 3: were disappointed that I didn't feel happier.
Speaker 4: I just felt like.
Speaker 3: Slightly less stressed, just onder the next thing, well that
Speaker 3: the fourth launch just meant that we wouldn't die quite then.
Speaker 1: But well that's good news, right.
Speaker 3: But then we were awarded a big massa contract the
Speaker 3: end of literally I think it was December twenty third.
Speaker 4: In fact, the absolute low.
Speaker 3: Point was for me, it was I think December twenty
Speaker 3: second or twenty first of two thousand and eight, because
Speaker 3: even though we'd had the that Falcone success, the I mean,
Speaker 3: we didn't. We still had very few contracts and we
Speaker 3: didn't have enough money to keep the company going. We
Speaker 3: really needed a big contract win. And then NASA Corden
Speaker 3: said that they had awarded us the main contract for
Speaker 3: replacing the cargo transport function of the Space Shuttle and
Speaker 3: it was one point six billion. So I was like,
Speaker 3: I said, I love you guys.
Speaker 4: I don't know if that's your supposed to say that, but.
Speaker 1: Yeah, that was billion with a B right right right?
Speaker 4: I don't know, yes, lust all decorum.
Speaker 2: The I think one of the interesting things, you know,
Speaker 2: taking quotes from you, is that your cost is about
Speaker 2: one third you know, I believe that tried of of
Speaker 2: of the competitors for for for for rocket launches or yeah,
Speaker 2: are you are there things that you think that NASA
Speaker 2: could learn from private companies that are that are coming
Speaker 2: into the market.
Speaker 3: Now, yeah, you know, I think in general it's tough
Speaker 3: for government to do things efficiently, you know. So I
Speaker 3: mean I generally I think that that government should do
Speaker 3: try to minimize the number of things that government does.
Speaker 3: So I'm generally proponent of of of smaller government, not
Speaker 3: bigger government, just because government as a as a system
Speaker 3: is not an efficient system. So you want to minimize
Speaker 3: the government participation in the economy. That doesn't mean getting
Speaker 3: rid of it, but it's just saying you have to
Speaker 3: think really carefully before government does something versus free enterprise
Speaker 3: does something. For erprise is always going to be more efficient.
Speaker 3: So now, now there are things like like basic physics research,
Speaker 3: and obviously I think would rather have a government army
Speaker 3: than a private army. And I think probably a government
Speaker 3: justice system than a private justice system. You know, there's
Speaker 3: sort of things that are that the government should do
Speaker 3: and and also kind of doing things like the Hubble
Speaker 3: and the Mars rovers. You know, something like the Hubble
Speaker 3: is a small amount of good for everyone. Like it's like, well,
Speaker 3: we learn learn more about the universe, got some really
Speaker 3: cool pictures and and and that's that's that's that's a
Speaker 3: value to all of America and all of humanity really,
Speaker 3: but it's hard to say, like who's going to pay
Speaker 3: for it? If you try to raise private funds for it.
Speaker 3: I mean, you might be able to get it, but
Speaker 3: it's it's it's harder.
Speaker 1: So you got your money back from the last thing, right,
Speaker 1: so the.
Speaker 2: You got your money back from you know, having uh
Speaker 2: invested in Tesla and you know you just got the
Speaker 2: contract from NASA.
Speaker 3: So yeah, Actually, as it turns out, Tesla.
Speaker 4: And Space extensil the city are doing really well.
Speaker 3: And you know at the you know, the I think
Speaker 3: it's if you look at say the Tesla stock price,
Speaker 3: it's actually been remarkably stable. It's been sort of in
Speaker 3: the twenties for a year, despite massive grations in the market.
Speaker 3: And there was a there was a momentary short squeeze
Speaker 3: in December of last year, which there's a bunch of
Speaker 3: articles that reference, oh, Tesla had this high of like
Speaker 3: thirty six dollars. See that's not because there was a
Speaker 3: short squeeze at the end of December. It was because
Speaker 3: at the end of the that was when the six
Speaker 3: month lock up period for the IPO expired, and I
Speaker 3: think people in the market expected that there would be
Speaker 3: a lot of people selling stock at that point, and
Speaker 3: actually they won't.
Speaker 4: Just didn't happen, right, So it's a big short squeeze
Speaker 4: it took place.
Speaker 3: I think there's probably gonna be another short squeeze on
Speaker 3: Tesla because, like I apparently get these Google alerts that
Speaker 3: were like the third most shorted stock on the Nasdaq.
Speaker 1: Twenty one million sharees short.
Speaker 4: Now, I mean, somebody's got a lot of balls.
Speaker 1: Yeah. Well, so.
Speaker 4: All right, all right, saved.
Speaker 1: I mean, what do they have wrong?
Speaker 5: What?
Speaker 1: Okay?
Speaker 2: So that guy he's short your shares, So talk to
Speaker 2: Dave Meyer. You tell him why he's wrong.
Speaker 3: Dude, it's gonna sting, That's what I tell you. It's yeah,
Speaker 3: I think, well, I mean, I don't know if you're
Speaker 3: actually okay, but but I think generally when I told
Speaker 3: people who short the shows that they're not shorting it
Speaker 3: because of any they know about Tesla, they just shortened
Speaker 3: it because.
Speaker 4: Of historical precedent.
Speaker 3: It's like, oh, there's never there hasn't been a successful
Speaker 3: car company in ages, So Tesla is going to be
Speaker 3: is not going to succeed.
Speaker 4: Like, how about looking at the fundamentals? You know.
Speaker 3: So the thing is that whenever there's a big change
Speaker 3: in technology, whenever there's a big technology just continuity, that's
Speaker 3: when opportunity arises in an industry. And if you look
Speaker 3: at say, like the computer industry, we had IBM was
Speaker 3: extremely dominant in mainframes and everyone thought, oh, you know,
Speaker 3: they'll just be extremely dominant in PCs and everything, and
Speaker 3: they weren't. They just they have a hard time with
Speaker 3: the technology. You know, when there's a shop change in technology.
Speaker 3: Gradual changes they can deal with, but but sharp changes
Speaker 3: that they tend to not do well with. And and
Speaker 3: you can look at the Internet and say, well, why
Speaker 3: wasn't Microsoft the leader in search? Why didn't they beat Google?
Speaker 3: Why didn't Google beat Facebook? And you know, it's just
Speaker 3: tough to deal with big technology change. And what we're
Speaker 3: seeing in the automotive industry is the biggest technology change
Speaker 3: since the moving production line and the entire powertrain is changing.
Speaker 3: So and and then and and then people say, well,
Speaker 3: how could you possibly compete with like the big car
Speaker 3: companies like Toyota, Like I mean Toyota mean our partner,
Speaker 3: the one that we're providing electric power trains to that?
Speaker 4: Would that be the Toyota referring to it? You know,
Speaker 4: it's it.
Speaker 3: You have to say, well, why is why is Toyota
Speaker 3: having Tesla supply electric power trains?
Speaker 4: It can't be that easy.
Speaker 3: If if if if we're doing that, why is Diamond,
Speaker 3: of the company that invented internal commission engines having a
Speaker 3: supply components to them? And it's it's because it's it's
Speaker 3: it's really hard technology, but it tells it is really
Speaker 3: it's it's a we're a hardcore technology and design company.
Speaker 3: You know, there's I think there's other companies out there
Speaker 3: like that that that are not that are sort of
Speaker 3: different and you know, like like Fisco is pretty different
Speaker 3: from us, like they're not a hardcore engineering company, but
Speaker 3: but but we are.
Speaker 4: And so I think come with me.
Speaker 3: There's there's this huge value and tests in terms of
Speaker 3: the intellectual property that that we've developed. And if you
Speaker 3: look at you know, some of our strategic investors like
Speaker 3: Daimler and uh and like Toyota and like Panasonic who
Speaker 3: have not sold a share in fact, Diamler at the
Speaker 3: last when we do secondary earlier this year, Diamler participated
Speaker 3: for Parana in that secondary.
Speaker 4: You know, it's difficult to ask for a better endorsement
Speaker 4: than that.
Speaker 2: I think that the power train contract that you all
Speaker 2: signed with U with Toyto was very interesting for for
Speaker 2: one reason. It's it seems to me I couldn't think
Speaker 2: of another another instance where a company, a car company,
Speaker 2: had outsourced such a central component, Like usually they do
Speaker 2: a lot of manufacturing, but that's a central component. So
Speaker 2: that feels like not just a game changer for you,
Speaker 2: but a game changer for the industry.
Speaker 3: Yeah, you're right, it is unusual for that to occur.
Speaker 3: And part of what Akio Turta is trying to do
Speaker 3: with his company is is try to push it to
Speaker 3: be more entrepreneurial. He remembers the days of his grandfather
Speaker 3: when it was very entrepreneurial. You know, Toyota made sewing
Speaker 3: machines in the thirties, and then there's just decided one
Speaker 3: day they're going to make cars, and people like, ah,
Speaker 3: they can possibly make a car that anyone will want
Speaker 3: to buy, and then.
Speaker 4: They made a great car.
Speaker 3: But they were very entrepreneurial, and Ako Turta's concerned that
Speaker 3: they've become two set in their ways. They've become too
Speaker 3: convinced in their own rightness and that's part of what
Speaker 3: led to some of the issues that that he came
Speaker 3: in to fix. And Akotota is a really great guy
Speaker 3: about Toyota is really fortunate to have him at the
Speaker 3: helm there. But but but he you know, he wants
Speaker 3: to push push his team to to try new things.
Speaker 3: Because when he went to his team and said, hey,
Speaker 3: what about electric vehicles, they said it couldn't be done.
Speaker 3: And so it's like, okay, so let's see if this
Speaker 3: little company to Tesla can do it. And so and
Speaker 3: we're doing it and I'm like, oh, okay, I guess
Speaker 3: it can be done.
Speaker 2: Why don't you think they could do it? I mean
Speaker 2: they tried for they tried on a number for a
Speaker 2: long time. They put millions of dollars into into developing
Speaker 2: the technology.
Speaker 1: What's what's different.
Speaker 3: Well, no, I think they will be able to do
Speaker 3: it over time. But it's just it's just not very
Speaker 3: quick and you know they didn't, uh, the mindset of
Speaker 3: trying something new and radical was just not there. That
Speaker 3: it's you know, if there's people have written books about this,
Speaker 3: like Crushing the.
Speaker 4: Chasm and innovator's dilemma and all.
Speaker 3: That about how it's difficult to do radical innovation at
Speaker 3: a big company because if you try to do radical
Speaker 3: innovation and you fail, you get a huge ding.
Speaker 4: And and and then.
Speaker 1: And especially if you have something to protect to start with.
Speaker 3: Yeah, right, exactly, you've got to decide that you're trying
Speaker 3: to decide that you can to cannibalize your existing business
Speaker 3: and take a big risk and deal with all the
Speaker 3: issues that inevitably arise when you're trying to push a
Speaker 3: new technology, and and and and then and not get
Speaker 3: fired along the way.
Speaker 4: It's pretty hard.
Speaker 2: One of your one of your passions has been, uh
Speaker 2: been clean energy, and you know this is you know,
Speaker 2: this has been something that you've done, I guess on
Speaker 2: the side of the other you know, these other very
Speaker 2: small projects. Do you believe that the developing markets like
Speaker 2: India and China, how are they going to develop in
Speaker 2: a way that sustainable and clean energy is possible?
Speaker 3: Well, China is actually already moving to towards clean energy
Speaker 3: very aggressively.
Speaker 4: People.
Speaker 3: There's a lot of press about Clendra and you know,
Speaker 3: the dary giving flinder for hundred million dollars and cylinder
Speaker 3: failed and should should the government really have given them.
Speaker 4: A hundred million dollars?
Speaker 3: And well, it's worth pointing out that they got about
Speaker 3: eight hundred million dollars from from private investors, primarily Silicon
Speaker 3: Valley venture capitalists, including some very big names.
Speaker 4: So we're suckers who got that money.
Speaker 3: And the fundamental issue with Slender was they would have
Speaker 3: been okay at about two dollars or work for solar,
Speaker 3: but the Chinese pushed it down to a claskal white.
Speaker 4: Yeah.
Speaker 3: The prices collapsed, right, Yeah, and the Chinese government invested
Speaker 3: forty billion in their solar industry. And so people were like, like, Slender,
Speaker 3: you suck for failing. I'm like, yeah, they had literally
Speaker 3: one percent the resources of their competitors.
Speaker 4: Who would win in that situation, It's pretty hard. You
Speaker 4: did well? Okay?
Speaker 3: Yeah, but you know in the case of Solar City,
Speaker 3: so I mean I did I thought this would occur,
Speaker 3: you know, I thought there would be a rabbit competition
Speaker 3: in the cost per what of solar the somewhat inevitable
Speaker 3: with Korea, Japan, China, Germany or competing like mad On
Speaker 3: on cost per WAT and it's a very much a
Speaker 3: commodity that you do not want to be in that
Speaker 3: in that business. And then so Solo City's focus is
Speaker 3: on balance of system. They're kind of like Dell or Apple.
Speaker 3: You know Dell Apple. They don't make the memory chips
Speaker 3: or the CPU or the hard drive, but they designed
Speaker 3: the overall system. They put it together, they handle the
Speaker 3: customer relationship, They own the customer brand, they own the relationship.
Speaker 3: I mean, if you've got Solar City in slation in
Speaker 3: your house, you have no idea what panels you've got.
Speaker 4: I mean it's like panel panel dumbing Solo City panels.
Speaker 4: You might as well know.
Speaker 3: Like people know about as much about what panels are
Speaker 3: on the roof as they know about what de ram
Speaker 3: chips are in their computer. Daku major de ram chips
Speaker 3: in your mac Apple.
Speaker 4: No, it was not Apple.
Speaker 3: So in fact, I think I think that there's a
Speaker 3: lot of parallels between the d RAM business and and
Speaker 3: the solar panel business. I think it's going to go
Speaker 3: through the same sort of boom bust microscopic margin situation.
Speaker 3: But the bull competition there is in panel cost for
Speaker 3: what the better solace that he is. So they're kicking butt.
Speaker 3: I mean they're growing at fifteen a year and positive
Speaker 3: cash flow.
Speaker 2: Uh, you have a you have a pretty tight time frame,
Speaker 2: so I want to make sure that we open it up.
Speaker 5: Uh.
Speaker 2: Two questions from from the audience, if that's if that's okay?
Speaker 6: So well, and thank you very much for visiting us today.
Speaker 6: Just a couple of questions. The first is why are
Speaker 6: there so many fewer IPOs now than have been the
Speaker 6: case in years past? And the second question is having
Speaker 6: never had the pleasure of working with you or for you?
Speaker 6: This might actually be a better question for your associates,
Speaker 6: but you know, I always think of CEOs and leaders
Speaker 6: as creating cultures around them. Bill's interview very much was
Speaker 6: focused on exploits, achievements and forward looking things for your businesses.
Speaker 6: What's it like to work with you on a daily basis?
Speaker 6: What kind of a culture do you typically create around yourself?
Speaker 6: Are there catchphrases you use?
Speaker 4: How do you roll?
Speaker 5: Well?
Speaker 4: I don't normally wear a suit.
Speaker 3: The reason I'm wearing a suit is because I'm in DC,
Speaker 3: and you know when in Rome, although you guys are
Speaker 3: wearing suits, but.
Speaker 1: We roll a little differently, right, You're no normal for DC.
Speaker 1: Welcome to differentia, right.
Speaker 3: I just gave a toalk at the National Press Club,
Speaker 3: and I'm headed to the Pentagon right after this. That's
Speaker 3: why I need to leave on time because they're quite
Speaker 3: punctual over there, So, you know, I don't know, I'm
Speaker 3: I'm not sure exactly how to describe the culture of
Speaker 3: SpaceX or TESLA, but I do try to think of
Speaker 3: it in kind of like signal to noise, you know,
Speaker 3: where signal is getting useful things done, noises everything else.
Speaker 3: And so we want to get have people do you know,
Speaker 3: be focused on doing useful things and not involved in
Speaker 3: sort of internescing politics, and uh, you know, I think, yeah,
Speaker 3: the role of the managers like basically to make sure
Speaker 3: people are well You need to be able to decide
Speaker 3: what is the right strategy, what's the direction to go,
Speaker 3: and then and then make sure people are are doing
Speaker 3: things that are pointed in that direction and that the
Speaker 3: that the their talents, the.
Speaker 4: Other opportunities are maximized.
Speaker 3: And I just sort of like iterate on that loop
Speaker 3: that that's that That's kind of how I think. And
Speaker 3: then I think in terms of of recruiting and motivating
Speaker 3: the best people having you've got to make sure it's
Speaker 3: a reasonably fun work environment. So people are looking forward
Speaker 3: to coming in the work to work in the morning,
Speaker 3: it's a lot easier to be productive and folks, but
Speaker 3: if you if you're interested in what you're doing and
Speaker 3: and and you're looking forward to it, then if your
Speaker 3: mind's trying to escape and it feels like prison where
Speaker 3: you leave at five five pm or something like that.
Speaker 3: And then the other is that is the financial reward
Speaker 3: needs to be commensurate with the effort expended. So if
Speaker 3: they work really hard, they've got to think, okay, that that.
Speaker 4: Will the reward will be proportionate to my effort. You know.
Speaker 3: Obviously, if you have a situation where where you see
Speaker 3: somebody is highly rewarded for doing much less effort than you,
Speaker 3: then that's demotivating.
Speaker 4: So you want to avoid situations like that.
Speaker 3: And then the third thing is I think if people
Speaker 3: think that what they're working at on it there's a
Speaker 3: greater cause.
Speaker 4: You know, that there's something that could change the world,
Speaker 4: then I think that that's also a motivating factor.
Speaker 3: Now, not everything changes the world, I mean, or it
Speaker 3: changes to various degrees, but I think for the most
Speaker 3: talented and driven people, it's important that there'd be a
Speaker 3: larger purpose how do.
Speaker 1: You view well conceived failures in your company?
Speaker 4: Uh, well, I think it's important.
Speaker 3: Like nobody bats a thousand obviously, and no matter how
Speaker 3: smart you are, you will make some number of mistakes.
Speaker 3: Everyone makes mistakes. It's just a question of how many
Speaker 3: and how often, and do you.
Speaker 1: Have a good whether a rocket blows on right.
Speaker 3: I didn't fire anyone responsible for particular failures associated with
Speaker 3: the first three flights, actually, and because they I mean,
Speaker 3: they could have made better decisions, but they're smart, hardworking,
Speaker 3: and it's sort of like, you know, it just wouldn't
Speaker 3: be fair in that situation. So it's only if somebody
Speaker 3: is either they can't that they're like they can't get
Speaker 3: themselves motivated around the core mission, or they're really not
Speaker 3: giving it everything they can.
Speaker 4: In some cases that they may be.
Speaker 3: Not the right fit for a particular role, or there's
Speaker 3: an error in the hiring process. But other than that,
Speaker 3: it's it's pretty forgiving I think.
Speaker 7: Okay, So, Hi, I've got a question. It's a nice
Speaker 7: segue to your next appointment at the Pentagon. So I'm
Speaker 7: interested in what the US military is doing with green energy,
Speaker 7: how they're going to use it in the future. For them.
Speaker 7: It's probably a matter of national security. I'm that's very important,
Speaker 7: but I also care a lot about our planet, and
Speaker 7: I know you do too. So any comments on upcoming
Speaker 7: opportunity for either solar or electronic vehicles or anything green
Speaker 7: with the military.
Speaker 3: Yeah, absolutely, Well you know that the military does does
Speaker 3: so the military does have a mandate to move to
Speaker 3: it's sustainable energy, and and it does have the dual
Speaker 3: advantage of being good for the environment and good for
Speaker 3: national security. I think certainly solar is is very important
Speaker 3: because a lot of the military bases out there, they
Speaker 3: operate on generators and and so it's there they're pretty
Speaker 3: inefficient from electricity generation standpoint. They're just importing a lot
Speaker 3: of oil and it actually takes.
Speaker 4: A lot of oil.
Speaker 3: It's oil to get the oil there, so it's really inefficient.
Speaker 3: So going big on solar is pretty important for the military,
Speaker 3: and Solar City is actually trying to do that, uh
Speaker 3: with with a big solar installation at military bases. It
Speaker 3: was announced recently it was actually going to be funded
Speaker 3: by in part by the DOE, but then the slender
Speaker 3: thing kind of threw everything for a loop, and so
Speaker 3: it doesn't look like that's going to happen unfortunately. But
Speaker 3: on the on the positive use side, the solar that
Speaker 3: he thinks they could they might be.
Speaker 4: They can probably get done without the doe. So I
Speaker 4: think I.
Speaker 3: Want to jump the gun here, but but I think it.
Speaker 3: I think they'll be able to move forward even without
Speaker 3: the doe. The cost is going to be a little higher,
Speaker 3: you know, because the cost of solar is so dependent
Speaker 3: on the capital cost of the thing, because it doesn't
Speaker 3: cost anything to run it, really, it's just the capital cost.
Speaker 3: So so yeah, I think things are moving in a
Speaker 3: good direction there and then and then over time I
Speaker 3: think we'll see military vehicles going increasingly electric. But you know,
Speaker 3: if the military can be a relatively slow adopter, you know,
Speaker 3: and unless there's like a pressing need, it can be
Speaker 3: a pretty slow adopter of technology. I mean, some of
Speaker 3: the planes that are up there flying pretty ancient. So
Speaker 3: I think it'll probably take a while for before the
Speaker 3: military will not be the probably not be the first.
Speaker 8: Here more of a whimsical question and a dream of mine.
Speaker 8: Chances of passenger flights how soon?
Speaker 3: Sure, well, I think we could do passenger flights. I
Speaker 3: think maybe best case three three years, but probably worst
Speaker 3: case five years, and these will be orbital flights, and
Speaker 3: depending upon what level of reusability we're able to achieve
Speaker 3: with the vehicle, that will drive the cost on a
Speaker 3: completely expendable basis.
Speaker 4: I think that the cost per seed.
Speaker 3: Would be on the order of twenty million dollars, which
Speaker 3: is obviously pretty expensive, but that's because you're throwing the
Speaker 3: rock or away.
Speaker 4: You know.
Speaker 3: It's sort of like, you know, imagine how much an
Speaker 3: air ticket would cost if you had to throw the
Speaker 3: plane away every time. Be really expensive, you know. Seven
Speaker 3: forty seven is about three hundre million dollars and you
Speaker 3: two for a round trip. But nobody's playing half a
Speaker 3: billion dollars for a plane ticket or even you know
Speaker 3: whatever it is w under passengers times that, so like
Speaker 3: one and a half plian dollars a ticket.
Speaker 4: So they do it.
Speaker 1: If they could get away with it.
Speaker 4: Well that's beauty of competition and everything.
Speaker 3: But you can use that some forty seven over and
Speaker 3: over again, like ten thousand times or more. So the
Speaker 3: capital cost is of the you know, in your ticket price.
Speaker 3: The capital cost has to be accounted somehow, but it's
Speaker 3: a pretty small portion.
Speaker 2: So we have time, I think for maybe two more
Speaker 2: questions right here, and keeping with the what do you
Speaker 2: see in the future discussion we've got going with Tesla,
Speaker 2: it seems like the odd industry is, you know, right
Speaker 2: for disruption as well.
Speaker 5: How long do you think it'll be till we're we're
Speaker 5: all driving Teslas to work? You know, it'll be a generation,
Speaker 5: it'll be ten years. What do you think the technology
Speaker 5: will really be commercially viable for the everyday consumer?
Speaker 3: Well, so we're trying to get to mass mark electric
Speaker 3: cars as fast as possible, and if that's really been
Speaker 3: my goal with Tila from the beginning is to make
Speaker 3: mass mark electric cars. But as a small company, we
Speaker 3: didn't have economies of scale and the technology wasn't refined
Speaker 3: enough to go to mass market right away. So the
Speaker 3: master plan has always been to start with expensive vehicles
Speaker 3: and low volume, go to mid price mood volume, and
Speaker 3: then low price high volume. And so we're about to
Speaker 3: do step two in that strategy, which is mid price,
Speaker 3: mid volume with the model S, which I'm highly confident
Speaker 3: we'll hit the market and get delivered.
Speaker 4: To customers middle of next year.
Speaker 3: In fact, we've got a big event this weekend which
Speaker 3: is the first customer drive or the first first some
Speaker 3: anyone will drive the Modelist Beta, which is essentially indistinguishable
Speaker 3: from the production car except for slight bugs and things.
Speaker 3: And that's a car that starts at fifty thousand dollars,
Speaker 3: so it's comparable to you know, Mercedes BMW Lexus type
Speaker 3: of thing. And then hopefully in about four years or so,
Speaker 3: we can get to the kind of the sub thirty
Speaker 3: thousand or maybe around thirty thousand dollars car, and and
Speaker 3: we have the factory to do it. The great thing
Speaker 3: about the factory that we acquired from GM and Toyota
Speaker 3: is that it has about a half million vehicle your capacity.
Speaker 4: We're just using a little tiny portion of it.
Speaker 3: In fact, we've literally turned the lights out and cut
Speaker 3: off the main breakers in the rest of the building
Speaker 3: so not.
Speaker 4: To use baseload.
Speaker 3: But we have this huge asset, which is that this
Speaker 3: factory that that we can leverage and scale up at
Speaker 3: a relatively low capital cost.
Speaker 1: And you're you're a bull on manufacturing. Domestically, I really.
Speaker 3: Like manufacturing, and I think sometimes manufacturing is looked at
Speaker 3: as kind of a boring like you're just making copies
Speaker 3: or something like that. But there's a huge amount of
Speaker 3: innovation that occurs in manufacturing, and I think it's it's
Speaker 3: actually a really interesting problem. So I'm very pro manufacturing
Speaker 3: and a very very much in favor of thinking manufacturing
Speaker 3: like a technology problem and not just like you're just
Speaker 3: going to make copies bending iron.
Speaker 4: Yeah, you think.
Speaker 3: About like this, if you're trying to take raw materials
Speaker 3: and get them into the desired shape, if if as
Speaker 3: efficiently as possible, and it's a really interesting puzzle as
Speaker 3: to how you do that. And there's a huge amount
Speaker 3: of innovation that can be applied there. Toyota showed this
Speaker 3: with the total production system, and I think, I like
Speaker 3: this is actually there's more, even more that can be
Speaker 3: done in that in that regard, but I think you
Speaker 3: have to have a tight iteration loop between engineering and
Speaker 3: production in order to experience that, in order to apply
Speaker 3: that innovation. That's why we've got engineering and production closely
Speaker 3: physically located in Silicon Valley, I think.
Speaker 4: Jeff J.
Speaker 2: Loy, actually I was curious what you thought of the
Speaker 2: future of the Vasimir rocket and does SpaceX have any
Speaker 2: plans on working with that astra at all.
Speaker 4: So the Vasimir is.
Speaker 3: It's basically an in space propulsion. It's it's basically an
Speaker 3: ion drive, and uh, it's you can't use it to
Speaker 3: depart from Earth. You can only use it in space
Speaker 3: because the actual thrust is quite low. That's true for
Speaker 3: all ion drives. And I think it's okay as far
Speaker 3: as ion drives go. I mean, it's it's I think
Speaker 3: there's some question marks around how much energy is required
Speaker 3: to operate the Vasimir, and I think that generally pre
Speaker 3: sort of presupposed as a nuclear reactor and and all
Speaker 3: that sort of stuff.
Speaker 4: So I think that's that's a bit.
Speaker 3: Tricky, and it's not clear to me that the Vasimir
Speaker 3: wins when when you're looking at you know, basically watts
Speaker 3: of input energy per neutint of thrust, which is sort
Speaker 3: of a.
Speaker 4: Key figure of merit.
Speaker 3: I do, I do believe in ion drives, and it's
Speaker 3: saying it's that something SpaceX will get into. But but
Speaker 3: I think we'll probably be more in the in favor
Speaker 3: of sort of things like coal effect thrusters and and
Speaker 3: and and you know, maybe maybe maybe laser accelerated particles
Speaker 3: or something like that.
Speaker 2: So well on I think you can get a sense
Speaker 2: from you know, from our audience that We are enormous
Speaker 2: fans of purpose driven entrepreneurship and you know, you're one
Speaker 2: of the embodiments of of that and we, you know,
Speaker 2: we really appreciate that you.
Speaker 1: Took the time to come and speak with us today.
Speaker 1: Thank you, thank you,