(Bloomberg) — Tesla Inc. Chief Executive Officer Elon Musk discussed his planned acquisition ofTwitter Inc., recession fears and the US presidential race with Bloomberg Editor-In-Chief John Micklethwait at the Qatar Economic Forum on Tuesday.
During the chat he also clarified how much of Tesla’s workforce would be laid off and said he hoped to unveil his prototype humanoid robot to the world by the end of September.Here’s the Q&A session in full:
Q: Elon Musk, thank you very much for coming and talking to us. You could argue at the moment that we in the media 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?
A: 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 it is somewhat of a sensitive matter. So I like to be measured in my responses here, such as not to generate incremental lawsuits.
Q: That seems to be a risk you sometimes manage to overcome.
A: Yes, deposition minimization, I think, is important.
Q: Has Twitter given you enough information?
A: 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 I think is probably not most people’s experience when using Twitter. So we’re still awaiting resolution on that matter, and that is a very significant matter. So we’re awaiting resolution on that. And 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? So I think those are the three things that need to be resolved before the transaction can complete.
Q: What about the general state of the economy? Does that weigh on you when you think about this? I mean, you described 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?
A: 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 a certainty, but it appears more likely than not. And what do you think?Q: 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 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’ll now buy 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?A: 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 US, as far as I know. Because I assume you’re not under pressure at Bloomberg from China. I don’t think this is going to be an issue.Q: 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?
A: 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. So I mean, ideally, I’d like to get like 80% of North America and perhaps half the world or something ultimately on Twitter in one form or another. And 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. And I think 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. You’ll annoy the people around you, but you’re kind of allowed to just sort of yell whatever you want in a crowded public place, more or less, apart from “this is robbery” — probably that would get you in trouble. So but then 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 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 user’s preferences. So if your preferences are to see anything, or read anything, then well, you’ll get that. But if your preferences are well, 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. But I think 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 useful as possible.
Q: 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?
A: Well, I would drive the product, which is what I do at SpaceX and Tesla. So I’d drive the product and 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.
Q: Can I jump toward Tesla then? For most people, it’s very obvious that you have changed the car industry in a dramatic way. I’m quite intrigued by one thing — your competitors. Where do you see competition coming from? Do you see it coming from the old carmakers 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 a new place? Do you believe that?
A: I believe that forecast was from you.
Q: Yes, it was. And do you agree with that?
A: I would not agree with that forecast, no.
Q: But do you see people like Volkswagen and General Motors 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?
A: I have to say that I am very impressed with the car companies in China and just in general with companies in China. I think they’re extremely competitive, hardworking and smart. And I think there’s going to be just a massive wave of Chinese products going out into the world. There already are. For example, almost all the iPhones are made in China by contract manufacturers for Apple. But I think we’ll see just a large wave of products being exported from China in many industries.
Q: In electric cars, do they have an advantage at all?
A: Well 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. So our constraints are not imposed upon us by competitors, but rather just imposed upon us by the realities of the supply chain and building up manufacturing capacity. So as anyone knows who has tried to order a Tesla, the demand for our cars is extremely high and the wait list is long. And this is not intentional. We are increasing production capacity as fast as humanly possible. So 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-ion battery supply chain, from mining and refining to cathode and anode production and cell formation.Q: Can you set the record straight on one thing, which is this issue about the layoffs? I think you’ve said initially that at Tesla, 10% of the workforce would be cut; then 10% of salary would be cut; then salary would stay flat and overall headcount would go up. What is the number? I know there’s already a lawsuit about the 10%. Is 10% the goal to reduce the workforce? What is the number that we should think about or that you’re planning?
A: Tesla is reducing the salaried workforce roughly 10% over the next probably three months or so. We expect to grow our hourly workforce, and I should be 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 a reduction in the salaried workforce. We’re about two thirds hourly and one third salary. So I guess technically a 10% reduction in the salaried workforce is only roughly a 3%, 3.5% reduction in total headcount.Q: I think that number is important legally, isn’t it? Because I think 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.
A: We did make an announcement on that. Let’s not read too much into a pre-emptive lawsuit that has no standing, that is a small lawsuit of minor consequence. Anything related to Tesla gets big headlines, whether it is, you know, 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. So a year from now, I think our headcount will be higher in both salary 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 3%, 3.5% reduction in total headcount and not super material.
Q: 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’m wondering if you’re still in that position, and whether you would, for instance, think about supporting Donald Trump if he were to run?
A: 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.
Q: Now I’m asking you about Trump, whether you would consider him?
A: I think I’m undecided at this point on that election.
Q: You talked about putting money behind a super-moderate super PAC in the US. And I wondered, how much money do you think you’re going to put into that? What kind of support would you push?
A: I’ve not decided on an amount, but it would be some non-trivial figure, I think.
Q: Non-trivial could mean a lot of money with you, I was guessing.
A: Well, I’ve not decided on an exact amount, but perhaps it would be $20 million or $25 million.
Q: Just on that issue. I mean, again, you look at what DeSantis says, you look at what Trump says. And those sort of politicians, they are, again, the 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?
A: Well, no, I don’t think so.
Q: 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?
A: Well, I have never said that people should invest in crypto. In the case of Tesla, SpaceX, myself — you know, SpaceX and Tesla, for example, all did buy some Bitcoin, but it’s a small percentage of our total cash and near-cash assets. So, you know, not all that significant. I also bought some Dogecoin and Tesla accepts Dogecoin for some merchandise and SpaceX will do the same. And I intend to personally support Dogecoin because I just know 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 and just people that, when I’ve walked around the factory at SpaceX or Tesla, they’ve asked me to support Dogecoin, so I’m doing so.
Q: 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 came out and said that you still thought there was value there.
A: I said I support Dogecoin and I’m doing that.
Q: Can I ask you one last question as I notice that you’re going to unleash a humanoid robot, to be unveiled on September 30. I wonder if there’s anything more you could tell us about that?
A: Well, I hope that we will have an interesting prototype to show people. We have a very talented team at Tesla that I’m working with closely to have a prototype humanoid robot ready by the end of September. And I think 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 sort of 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.
Q: Did you see at all the drama at Google where 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?
A: I think we should be concerned about AI. And I’ve said for a long time that I think there ought to be an AI regulatory agency that oversees artificial intelligence for the public good. And I think that for anything where there is a risk to the public, whether that’s say, the Food and Drug Administration or Federal Aviation Administration or the Communications Commission, whether it’s a public risk or a public good at stake, it’s good to have a sort of a government referee and a regulatory body. And I think we should have that for AI, and we don’t currently. And that would be my recommendation.
Q: Elon Musk, you’ve been incredibly kind with your time, not least because I think it’s 3 a.m. in the morning in New York.
A: Yes.
Q: It’s been a heroic performance. Thank you very much for talking to the Qatar Economic Forum and for talking to Bloomberg, thank you.
A: You’re most welcome, thanks for having me.
Qatar’s Ministry of Commerce and Industry, Qatar Investment Authority and Investment Promotion Agency Qatar are the underwriters of the Qatar Economic Forum, Powered by Bloomberg. Media City Qatar is the host organization.
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