Jun 21, 2022

Tesla CEO Elon Musk at Qatar Economic Forum 6/21/22 Transcript

Tesla CEO Elon Musk at Qatar Economic Forum 6/21/22 Transcript
RevBlogTranscriptsElon MuskTesla CEO Elon Musk at Qatar Economic Forum 6/21/22 Transcript

Tesla Inc. CEO Elon Musk discusses his planned acquisition of Twitter Inc., his view that a US recession is likely, and the outlook for job cuts at Tesla. Read the transcript here.

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Speaker 1: (00:00)
We now have a man who, by many measures at least, is the world’s greatest capitalist at the moment, Elon Musk. Thank you very much for coming and talking to us. You could argue, at the moment, that us in the media, we have at least three Elon Musks to deal with. We have the proposed buyer of Twitter. We have the CEO of Tesla, SpaceX and much else, and we have Musk the emerging political force, and that’s before we discuss all the different provocations and tweets and so on, but maybe we can run through those three.

Speaker 1: (00:35)
Let’s begin with Twitter. I suppose my question for you is what is the status of the $44 billion deal to buy the company? If you look at the deal spreads at the moment, the investors seem to be betting that it won’t happen, I suppose. Right here, you have the Qataris who are amongst your backers, what are you going to say to them and to us?

Elon Musk: (01:00)
Well, first of all, I’d like to say, Your Highness, your Excellencies, and distinguished guests, thank you very much for hosting me virtually. It’s an honor to be there virtually, and I actually wish I could be there in person. With respect to the Twitter transaction, there’s a limit to what I can say publicly, given that is somewhat of a sensitive matter. I would like to be measured in my responses here, such as not to generate incremental lawsuits, unfortunately.

Speaker 1: (01:38)
That seems to be a risk you sometimes manage to overcome.

Elon Musk: (01:42)
Yes, deposition minimization is important.

Speaker 1: (01:49)
Have Twitter given you enough information?

Elon Musk: (01:53)
Well, there are still a few unresolved matters. You’ve probably read about the question as to whether the number of fake and spam users on the system is less than 5% as Twitter claims, which is probably not most people’s experience on when using Twitter. We are still awaiting resolution on that matter. That is a very significant matter. We’re awaiting resolution on that. Then of course there is the question of will the debt portion of the round come together and then will the shareholders vote in favor? Those are the three things that stand in the… that need to be resolved before the transaction can complete.

Speaker 1: (02:46)
What about the general state of the economy? Does that weigh on you when you think about this? I mean, you described it, you have a super bad feeling about the economy. Are you still in that position? I just said to you earlier, Joe Biden has just come out and said that a recession in America is not inevitable. How do you feel about the economy?

Elon Musk: (03:07)
Well, a recession is inevitable at some point. As to whether there is a recession in the near term, that is more likely than not. It’s not a certainty, but it appears more likely than not. What do you think?

Speaker 1: (03:27)
I’m with you. I agree with you, it’s more likely. Can I ask you one particular thing to do with the Twitter bid, which is you are one of the biggest and fastest growing investors in China. Tesla, you’ve talked about it being a third of your sales going forward. You’re now buying Twitter, the public forum for free speech. The Chinese, historically, don’t tend to be very enthusiastic about free speech. Are you worried about whether you can keep those two particular horses running? Is buying Twitter going to get you in trouble with the Chinese?

Elon Musk: (04:06)
Well, Twitter does not operate in China. China does not attempt to interfere with the free speech of the press in the US, as far as I know. I assume you’re not under pressure to Ed Bloomberg from China? I don’t think there is going to be an issue.

Speaker 1: (04:39)
In terms, generally, of that issue of freedom of speech and Twitter, you’ve talked about Twitter making it even freer and letting more people onto it. Is there a limit at all to who you think should be allowed onto Twitter?

Elon Musk: (04:52)
Yeah, well, my aspiration for Twitter, or in general, for the digital town square would be that it is as inclusive in the broader sense of the word as possible; that it is an appealing system to use. Ideally, I’d like to get 80% of, that’s in North America and perhaps, I don’t know, half the world or something, ultimately on Twitter in one form or another. That means it must be something that is appealing to people. It obviously cannot be a place where they feel uncomfortable, or harassed, or they’ll simply not use it.

Elon Musk: (05:41)
There’s this big difference between freedom of speech and freedom of reach, in that one can obviously, let’s say in the United States, go in the middle of Times Square and pretty much yell anything you want, and you’ll annoy the people around you, but you’re allowed to just yell whatever you want in a crowded public place, more or less, apart from this is a robbery, probably that would get you in trouble.

Elon Musk: (06:13)
Whatever you say, however controversial, does not need to then be broadcast to the whole country. Generally, the approach of Twitter should be to let people say what they want to do, within the bounds of the law, but then limit who sees that based on any given Twitter use of preferences. If your preferences are to see anything, or read anything, then, well, you’ll get that. If your preferences are you prefer not to see comments that you find offensive in one form or another, then you can have that as a setting, and not see it. One way or another one needs to take the steps that entice most people to want to be on Twitter, and enjoy it, and find it informative, and entertaining, and funny, and useful as possible.

Speaker 1: (07:23)
It sounds like you want to be involved. Is your plan to be CEO of Twitter, and if you do that, would you still keep being CEO of Tesla and SpaceX?

Elon Musk: (07:32)
Well, I would drive the product, which is what I do at SpaceX and Tesla. I drive the product in technology. Whether I’m called the CEO, or something else, is much less important than my ability to drive the product in the right direction.

Speaker 1: (07:57)
Can I jump towards Tesla there? Most people, it’s very obvious, you have changed the car industry in a dramatic way. I’m quite intrigued by one thing, which is your competitors. Where do you see competition coming from? Do you see it coming from the old car makers coming back at you? I just saw a forecast that maybe in a couple of years’ time, Volkswagen would be bigger than you in electric cars, or do you see it coming from new place? Do you believe that?

Elon Musk: (08:24)
I believe that forecast was from you?

Speaker 1: (08:27)
Yes, it was. Yeah, and do you agree with that?

Elon Musk: (08:31)
I would not agree with that forecast. No.

Speaker 1: (08:36)
Do you see people like Volkswagen, and General Motors, and people like that as the opponents, or do you see people like China, the new Chinese companies… Where do you see the most vibrant competition in electric cars?

Elon Musk: (08:49)
I’d say that I am very impressed with the car companies in China, just in general with companies in China. I think they’re extremely competitive, hardworking, and smart. There’s going to be just a massive wave of Chinese products going out into the world. There already are, but for example, almost all the iPhones are made in China by contract manufacturers for Apple. I think we’ll see a large wave of products being exported from China in many industries.

Speaker 1: (09:31)
In electric cars, do they have an advantage at all?

Elon Musk: (09:36)
Yeah, no. I should say from a Tesla perspective, we don’t really think about other competitors. Our constraints are much more in raw materials and being able to scale up production. Our constraints are not imposed upon us by competitors, but rather imposed upon us by the realities of the supply chain, and building up manufacturing capacity.

Elon Musk: (10:12)
As anyone knows who has tried to order a Tesla, the demand for our cars is extremely high and the wait list is long. This is not intentional. We’ll increase production capacity as fast as humanly possible. Like I said, we really don’t think about competition at all. We just think about how do we address the limiting factors in the supply chain and in our own industrial capacity. Basically, we need to build the factories faster, and then we need to look ahead to whatever the choke points are in the whole lithium mine battery supply chain from mining and refining to [inaudible 00:10:55] production and cell formation.

Speaker 1: (10:58)
Can you set the record straight on one thing, which is this issue about the layoffs? I think you said initially that Tesla, 10% of the workforce would be cut. Then 10% of salaried would be cut. Then salaried would stay flat, and overall head count would go up. What is the number? There’s already been a lawsuit about the 10%. Is 10% the goal to reduce the workforce, or what is the number that we should think about, or that you are planning?

Elon Musk: (11:29)
Yes. So Tesla is reducing the salaried workforce, or roughly 10%, over the next, probably, three months or so. We expect to grow our hourly workforce. I was quite clear that we expect to grow our hourly workforce, but we grew very fast on the salaried side, and we grew a little too fast in some areas, and so it requires reduction in the salaried workforce. We’re about two thirds hourly and one third salary. Technically, a 10% reduction in the salaried workforce is only roughly a three and a half percent reduction in total head count.

Speaker 1: (12:23)
That number is important legally, isn’t it, because people are trying to say, if you’re going to lay off 10% of your workforce, you have, even in America, to make an announcement about that.

Elon Musk: (12:34)
We did make an announcement. Yes, let’s not read too much into a preemptive lawsuit that has no standing; that is a small lawsuit of minor consequence. Anything that related to Tesla gets big headlines, whether it is a bicycle accident or something much more serious. It seems like anything related to Tesla gets a lot of clicks, whether it is trivial or significant. I would put that lawsuit you’re referring to in the trivial category. A year from now, I think our head count will be higher in both salaried, and obviously in hourly, but in the short term of the next few months, we expect to see, like I said, roughly a 10% reduction in salaried workforce, which is actually just really only a three and a half percent reduction in total head count, and not super material.

Speaker 1: (13:40)
Should we jump to that third Elon Musk, the uncontroversial one in politics? You’ve indicated that the Florida Governor Ron DeSantis is someone you could get behind if he ran for President. I wondered if you’re still in that position and whether you would, for instance, think about supporting Donald Trump if he were to run?

Elon Musk: (14:02)
Well, I was simply asked if I had decided on who I would be supporting in the next Presidential race, and I said, I had not decided who I would support. Then I was asked, well, who might you be leaning towards? I said, possibly DeSantis.

Speaker 1: (14:22)
Now I’m asking you about Trump, whether you would consider him?

Elon Musk: (14:28)
I think I’m undecided at this point on that election.

Speaker 1: (14:34)
You talked about putting money behind a super moderate superPAC in the US.

Elon Musk: (14:39)

Speaker 1: (14:40)
I wondered how much money do you think you are going to put into that? What kind of support would you push?

Elon Musk: (14:46)
I have not decided on an amount, but it would be some non-trivial figure, I think on the order of…

Speaker 1: (14:53)
Nontrivial could mean a lot with you.

Elon Musk: (14:54)

Speaker 1: (14:54)
Nontrivial could mean a lot of money with you, I was guessing.

Elon Musk: (15:02)
Well, I don’t know. I’ve not decided on an exact amount, but perhaps there would be 20 or $25 million.

Speaker 1: (15:12)
Just on that issue. Again, you look at what DeSantis says, you look at what Trump says, and those sort of politicians, they, again are people who make a large noise about China. I wondered whether you thought that was also an issue for you, in terms of business in China?

Elon Musk: (15:37)
Well, no, I don’t think so.

Speaker 1: (15:41)
You’re a brave man. Can I ask you, over the weekend, you tweeted your support of one cryptocurrency. You’ve seen the kind of carnage that has been happening in cryptocurrencies at the moment. What is happening, and do you still think people should invest, or is it a more selective approach?

Elon Musk: (16:02)
Well, I have never said that people should invest in crypto. In the case of Tesla, SpaceX, myself, SpaceX and Tesla and myself all did buy some Bitcoin, but it’s a small percentage of our total cash and near cash assets. Not all that significant. I also bought some Dogecoin, and Tesla accepts Dogecoin for some merchandise, and SpaceX will do the same. I intend to personally support Dogecoin because I just know a lot of people who are not that wealthy, who have encouraged me to buy and support Dogecoins. I’m responding to those people, just people that, when I’ve walked around the factory at SpaceX or Tesla, they’ve asked me to support Dogecoins, so I’m doing so.

Speaker 1: (17:11)
Dogecoin has come down a lot. It’s down about 80, 90%, or it’s down a lot, and that’s the reason why you came out and said that you still thought there was value there?

Elon Musk: (17:24)
I said I’d support Dogecoin, and I am doing that.

Speaker 1: (17:28)
Can I ask you one last question? I noticed that you are going to unleash a humanoid robot to be unveiled on September 30th. I wonder if there’s anything more you could tell us about that?

Elon Musk: (17:43)
Well, I hope that we will have an interesting prototype to show people, that we have a very talented team at Tesla that I’m working with closely to have a prototype [human-right 00:17:58] robot ready by the end of September. We are tracking to that point, and there’ll be a few other exciting things that we talk about at the Tesla AI Day. We have these AI Day events to just emphasize that Tesla is a lot more than a car company and that we are, in my view, the leading real world AI company that exists.

Speaker 1: (18:26)
Did you see at all the drama at Google where people, at least one engineer, thought that what was happening in terms of their AI machinery was closer to human thought than had been seen before and had a personality? Is that something that you think about at all, or you worry about?

Elon Musk: (18:51)
We should be concerned about AI, and I said for a long time that I think there ought to be an AI Regulatory Agency that oversees Artificial Intelligence for the public good. Just as for anything that, where there is a risk to the public, whether that’s the Food and Drug Administration, or Federal Aviation Administration, Federal Communications Commission; whether there’s a public risk or public good at stake, it is good to have a government referee and a regulatory body. We should have that for AI, and we don’t currently, and that would be my recommendation.

Speaker 1: (19:35)
Elon Musk, you’ve been incredibly kind with your time, not least because I think it’s 3:00 AM in the morning in New York. It’s been a heroic performance. Thank you very much for talking to the Qatar Economic Forum and talking to Bloomberg. Thank you.

Elon Musk: (19:49)
Great. You’re most welcome. Thanks for having me.

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