Tesla CEO Elon Musk on Trump, Twitter, Job Cuts, Recession Risks

[00:00:00] Speaker 1: 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 discover or discuss all the different provocations and tweets and so on. But maybe we can run through those three and let's begin with Twitter. And 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. And right here you have the Qataris who are amongst your backers. What are you going to say to them and to us? [00:00:59] Elon Musk: 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 here or be there virtually. And I actually wish I could be there in person. So with respect to the Twitter transaction, there's a limit to what I can say publicly, given that is somewhat of a sensitive matter. So I will actually be measured in my responses here, such as not to generate incremental lawsuits. [00:01:38] Speaker 1: Unfortunately, that seems to be a risk you sometimes manage to overcome. [00:01:41] Elon Musk: Yes, deposition minimization is, I think, important. [00:01:46] Speaker 1: Have Twitter given you enough information? [00:01:54] Elon Musk: 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, claims, which I think is probably not most people's experience on when using Twitter. So we're still awaiting resolution on that matter. And that that is a very significant matter. So we're awaiting resolution on that. And then of course, there is the question of will be the debt portion of the round come together? And then will the shareholders vote in favor? So I think those are the three things that, you know, that need to be resolved before the transaction can complete. [00:02:45] Speaker 1: 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? [00:03:07] Elon Musk: Well, I think a recession is inevitable at some point. As to whether there is a recession in the near term, I think that is more likely than not. It certainly isn't. It's not a certainty, but it appears more likely than [00:03:23] Speaker 1: not. What do you think? I'm with you. I agree with you. I think it's more likely. Can I ask you one particular thing to do with the Twitter bid, which is, you know, 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 kind of 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? [00:04:06] Elon Musk: Well, Twitter does not operate in China. And I think China does not attempt to interfere with the free speech of the press in the U.S. As far as I know, I assume you're not under pressure to, at Bloomberg, to, uh, from China. So I think there's, um, I don't think this is going to be an issue. [00:04:38] Speaker 1: And in terms generally of that issue of freedom of speech and Twitter, you've talked about Twitter being, making it even freer and letting more people onto it. Um, is there a limit at all to, to who you think should be allowed onto Twitter? [00:04:53] Elon Musk: Well, I, I, my aspiration for Twitter or in general for the digital town square would be that it is as inclusive, uh, in the broader sense of the word as possible. Um, that is, it is an appealing, uh, system to use. Um, so, I mean, ideally I'd like to get like 80% of, uh, uh, that's in North America and perhaps, I don't know, half the world or something ultimately on, on Twitter in one form or another. And that needs, that means it must be something that is appealing to people. It, it, it obviously cannot be a place where they feel uncomfortable or harassed, um, or they'll simply not use it. So, um, and I, I think there's, there's this big difference between freedom of speech and freedom of breach, um, 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, you want and you, you know, you'll, you'll annoy the people around you, but, but you're, you're, you're kind of allowed to just sort of yell whatever you want in, in, in, you know, a crowded public place, more or less, uh, apart from this is, this is a robbery, probably that would get you in trouble. Um, so, uh, but, but then that, that, whatever you say, however controversial does not need to then be broadcast to the whole country. So I think generally the approach of Twitter should be to, uh, let people say what they want to do within the bounds of the law. Um, but then, um, limit the, you know, who sees that, uh, based on, uh, uh, any given Twitter user's preferences. So if your preferences are to see anything, uh, or read anything, then, well, you'll get that. And if, but if your preferences are, well, you, you prefer not to see, uh, you know, comments that you find offensive in one form or another, then you, you, you can have that as a setting and not see it. And, uh, uh, but I think one way or another, it, one needs to take the steps that, uh, that, uh, that entice most people to, to want to be on Twitter and enjoy it and find it, uh, informative and entertaining and funny, you know, and just something and useful, uh, as useful as [00:07:22] Speaker 1: possible. 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? Um, well, I, I would drive the product, um, [00:07:39] Elon Musk: which is what I do at SpaceX and Tesla. Um, so I drive the product and technology, uh, whether I am that when I'm called the CEO or something else is much less important than my ability to drive the [00:07:54] Speaker 1: product in the right direction. Can I jump towards Tesla there? Not, you know, most people, it's very obvious you have changed the car industry in a, 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 places? Do you [00:08:22] Elon Musk: believe that? I believe that forecast was, was from you. Yes, it was. Yeah. And do you agree with that? I would not agree with that forecast. No. [00:08:35] Speaker 1: And do you, but 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 [00:08:45] Elon Musk: vibrant competition in electric cars? I have to say that I am very impressed with the, the companies and the car companies in China and just in general, with companies in China, I think they're extremely competitive, hardworking and smart. And, and I think there's going to be just a massive wave of Chinese products going out into the world. Um, there already are, but, um, you know, for, for example, I think almost all the iPhones are made in China, um, uh, by contract rate vectors for Apple. Um, but I think we'll see just a large wave of, of products being exported from China in many industries. [00:09:29] Speaker 1: Um, you know, in electric cars, do they have an advantage at all? Yeah. Yeah, no, I, I do think, [00:09:39] Elon Musk: well, I should say from Tesla perspective, we don't really think about other competitors. Um, our constraints are much more in raw materials and, and, uh, being able to scale up production. Um, so our, our constraints are not, um, imposed upon us by competitors, but rather, uh, the just imposed upon us by the realities of, of the supply chain, um, and building up, uh, manufacturing capacity. So, um, I mean, as anyone knows who has tried to order to order a Tesla, the demand for our cars is extremely high and the wait list is long. So our, and, and, and this is not intentional. It, we are increasing production capacity as fast as humanly possible. So, uh, that, so, like I said, we really don't think about competition at all. We just think about how, how do we address the, uh, limiting factors in the supply chain, um, and in our own industrial capacity. Basically we need to build the factories faster. Um, and then we need to look ahead to whatever the choke points are in the whole, uh, lithium mine battery supply chain from mining and refining to, uh, catheter and energy production [00:10:55] Speaker 1: and cell formation. So can you, can you, can you set the record straight on one thing, which is this issue about the layoffs? I think you've said initially that Tesla 10% of the workforce would be cut, then 10% of salaried would be cut, then salaried would stay flat, flat and overall head count would go up. What, what, what is the number? I know there's already, I think, been a lawsuit about the 10% is, is 10% the goal to reduce the workforce or what is the number that we should think about or that you're [00:11:27] Elon Musk: planning. Yes. Uh, so Tesla is reducing the salaried workforce by roughly 10%, um, over the next probably three months or so. Um, the, uh, we expect to grow, uh, our, um, hourly workforce. Uh, it's quite clear that we expect to grow our, our, our hourly workforce. Um, but we, uh, uh, we grew very fast with on the, on the salaried side. Um, and we grew a little too fast in some areas. And so it requires a reduction in salaried workforce and we're about two thirds, uh, hourly and one third salary. So I guess technically attempts at reduction in the salaried workforce is only roughly a three, three and a half percent [00:12:18] Speaker 1: reduction in total headcount. Um, now, uh, I think that number is important legally, isn't it? Because I think people are trying to say if you, if you're going to lay off 10% of your workforce, you have even in America to make an announcement about that. We did make an announcement. [00:12:37] Elon Musk: Um, yes. Um, let, let's not read too much into, uh, a preemptive lawsuit that has no standing. Um, that, that, that, that, that is a, a smaller lawsuit of minor consequence that just anything that related to Tesla gets big headlines, but it is whether it is, um, you know, a bicycle accident or something much more serious. Uh, it's still, it seems like anything related to Tesla gets a lot of clicks, whether, whether it is trivial or significant, uh, I would put that lawsuit referring to in the trivial category. Um, so, uh, a year from now, I think our head count will be higher in both salaried and obviously an hourly. Um, but in the short term of the next few months, uh, we expect to see, like I said, roughly a 10% reduction in, uh, salary, salaried workforce, which is actually just really only a three, three and a half percent reduction in total head count and, uh, not, uh, super material. [00:13:39] Speaker 1: Should we jump to that third Elon Musk, the, the uncontroversial one in politics? Uh, you, 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. Well, I was simply asked, um, if there was, [00:14:04] Elon Musk: um, if, if I had decided on, on who I would be supporting in the next presidential race. And I said, uh, I had not decided, uh, if who I would support, then I was asked, well, who might you be leaning towards? I said, possibly DeSantis. And now, now I'm asking you about Trump, whether you would consider him. Um, I think, uh, I'm undecided at this point on that election. I wondered, [00:14:33] Speaker 1: you, you talked about putting money behind a super moderate super PAC in the US. Yes. And I wondered how much money do you think you're going to put into that? What kind of support would you [00:14:44] Elon Musk: push? I have not decided on an amount, but it would be some, some non-trivial figure, I think. Um, [00:14:52] Speaker 1: I mean, at least sort of on the order of non-trivial could mean a lot. Sorry, non-trivial could mean [00:14:59] Elon Musk: a lot of money with you. I was guessing. Well, I don't know. I've not decided on the exact amount, [00:15:05] Speaker 1: but, um, perhaps it'd be 20 or $25 million. Just on that issue. I mean, again, you look at DeSantis, what DeSantis says. Um, you look at what Trump says. Um, and those sort of politicians, they, again, are people who make a large noise about China. And I wondered whether you thought that was also an issue for you in terms of business in China? Um, well, no, I don't think so. You're a brave man. Can I, can I ask you over the weekend, you, you tweeted your support of one cryptocurrency. You've seen the kind of carnage that has been happening in cryptocurrencies at the moment. Um, what is happening? And do you still think people should, should invest? Or is it a more selective [00:16:01] Elon Musk: approach? Well, I, I have never said that people should invest in crypto. Um, in the case of, uh, Tesla, SpaceX, myself, um, uh, you know, we are, uh, SpaceX and Tesla and myself all did buy some Bitcoin. Um, but it's a small percentage of our total, uh, cash and near cash, uh, assets. Uh, so, uh, you know, not, not all that significant. Um, I also, uh, bought some dogecoin and Tesla accepts dogecoin for some, um, merchandise and SpaceX will do the same. And, um, and I intend to personally support a dogecoin because I just saw a lot of people who are not that wealthy who, you know, have encouraged me to buy and support dogecoin. So I'm responding to those people, uh, just people that when I walk around the factory at SpaceX or Tesla, they've asked me to support dogecoin. So I'm doing so. [00:17:11] Speaker 1: Because dogecoin I think has come down a lot. It's down about 80, 90% or it's down a lot. And that's the reason why you, you came out and said that you still thought there was value there. I said, I support dogecoin and I'm doing that. Can I ask you one last question is I noticed that you, you're going to, um, unleash a humanoid robot to be unveiled on September the 30th. Um, I wonder if there's anything more you could tell us about that. Well, I hope that we will have, uh, [00:17:44] Elon Musk: an interesting prototype to show people. Um, the, we have a very talented team at Tesla that I'm working with closely to, uh, have, uh, a prototype humanoid robot ready by the end of September. And I think we're, we are tracking to that point. So that's, and there'll be a few other exciting things that we talk about at the Tesla AI day. Um, but I, I really want to, you know, we have these sort of AI day, um, events to just emphasize that Tesla is a lot more than a car company and that we are in my view, the, the, the leading real world AI company that exists. [00:18:26] Speaker 1: Well, you, were you, did you see at all the, the drama about the, um, the, the, at Google where tweet, 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 quite worried, had a personality. Is that something that you think about at all and, or you worry about? [00:18:50] Elon Musk: Um, I think, I think we should be concerned about, uh, AI and, and I said for a long time that I think there should be ought to be an AI regulatory agency that oversees, um, artificial intelligence, uh, for the public good. Um, and I think, uh, just as there's anything that for anything that where there is a risk to the public, whether that's a, a food and drug administration or federal aviation administration or communications commission, uh, whether it's a public, uh, risk or public good at state, uh, there, there, it's good to have sort of a government referee, um, and a regulatory body. And I think we should have that for AI and we don't currently. And, um, that [00:19:32] Speaker 1: would be my recommendation. Elon Musk, you've been incredibly kind with your time, not least because I think it's three AM in the, in the, in the morning in New York. Um, it's been a heroic performance. Thank you very much for talking to the Qatar Economic Forum and talking to Bloomberg. Thank you. [00:19:50] Elon Musk: You're most welcome. Thanks for having me.