Live blog: Tesla’s Elon Musk at D11

Photo of Elon Musk taken at Model S launch, courtesy of Katie Fehrenbacher, Gigaom

Elon Musk is generally not at a loss for words, and I live blogged his appearance this evening at D11 starting at 730pm PT. That time is probably approximate; dinner and cocktails will happen first.

Musk has a lot to talk about. Tesla is on a roll, reaching profitability amid a stock surge and expanded production. And he’s got that other little project called SpaceX that’s doing some pretty interesting things. Before things get started, check out Katie Fehrenbacher’s epic tale of how Tesla got to this point.

Tom Krazit 8:55:56 pm

Now I’m off to find a cocktail.

Tom Krazit 8:55:47 pm

And with that, we’re done. Thanks everybody for hanging out with us! Katie already has a story up on the charging network already:

Tom Krazit 8:54:54 pm

Tesla has built up a fleet of service loaners, Musk says. They’re also doing valet service. The service loaners are “top of the line cars,” he says, as opposed to the models that regular dealers can’t sell. He cites Lexus as having done similar things.

Tom Krazit 8:53:47 pm

Tesla has had some problems with service, Musk says, especially in the early part of this year when it had some problems opening service centers in LA. It’s going to take work to scale service internationally, he says. Tesla’s George Blankenship talked up how the company thinks about dealerships last year at our conference:

Tom Krazit 8:52:26 pm

Last question: a VC who used to work in the car dealership industry wants to know what Musk has in mind for dealerships, and anybody who went to our RoadMap 2012 conference last year already knows the answer.

Tom Krazit 8:51:40 pm

It was only a few years ago that Musk thought fully reusable rockets were achievable, but there’s still a long way to go: Musk hasn’t recovered a single rocket stage.

Tom Krazit 8:50:47 pm

Next question: Even without reusable rockets, SpaceX has reduced the cost to orbit by quite a bit: when did you see that opportunity, and are there other such opportunities that you think others should pursue? Musk says he thought SpaceX would fail, but he thought they could make a breakthrough by looking at rocket costs: “what are the materials, and if you had a pile of materials in front of you, what would the rocket cost? Clearly, people were doing something silly in how they were putting those materials together.”

Tom Krazit 8:48:46 pm

Musk does criticize oil companies for things like funding academic studies that are used to buttress their arguments even if the science underlying the reports isn’t valid. He recommends we read “Merchants of Doubt” as our homework: the oil companies have hired all the folks who used to defend the tobacco companies.

Tom Krazit 8:47:38 pm

“I have a hard time condemning the gas companies because the current system incents them to do bad behavior.” When the questioner points out that carbon taxes get passed along to consumers, Musk says that “a portion of somebody’s labor has to go to government activities. It’s not going to negatively affect the economy how we collect that money. We need to weight (taxes) toward things that are more likely to be bad than things that are more likely to be good.”

Tom Krazit 8:45:42 pm

Musk hopes that large car companies go electric. “If Tesla makes competitive electric cars we’ll deserve to be around, and if we don’t, we don’t deserve to be around.” He’s also asked about oil companies: the incentive structure with our current system involves asking the CEOs of oil companies to act against their best interests, and that’s obviously a tough thing to do. “The right thing to do is to change the rules of the game so it incents the right behavior,” he says.

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Walt asks Musk about, Mark Zuckerberg’s new lobbying project that Musk publicly withdrew from after a very short time. “It was a little too much of the Kissiniger-esque realpolitik,” he says, referring to the group’s method. “If we encourage that, we’ll get the political system we deserve.”

Tom Krazit 8:42:03 pm

Musk is asked about STEM education, especially with regards to immigration. The native of South Africa agrees that immigration reform is needed to help U.S. companies recruit talented people. People are drawn into science and technology by big projects, he says: the Apollo program had a huge effect on drawing kids of that generation into science and technology.

Tom Krazit 8:39:45 pm

Musk describes Hyperloop as “a cross between a Concorde, a rail gun, and an air hockey table.” All right then.

Tom Krazit 8:38:15 pm

Hyperloop is a transportation idea that Musk thought about when considering California’s ill-fated high-speed rail project. More details here:

Tom Krazit 8:37:26 pm

Shervin Pishevar gets the first question in, thanking Musk for filling the void that Steve Jobs at the D conferences. The real question is about Hyperloop: where does that stand? “I’ll be able to talk about that real soon,” he says, noting that Tesla has another announcement planned for June 20th that he’ll have to do first. Tesla’s PR folks have to be thrilled.

Tom Krazit 8:35:42 pm

Q&A time!

Tom Krazit 8:35:16 pm

“Innovation comes from new entrants into an area,” Musk says. So what are you doing next? “I think I’ll be occupied with Tesla and SpaceX for some time,” he says, even though he’s also involved with Solar City. He downplays any real role in their success, however.

Tom Krazit 8:34:06 pm

He does admit that there are a lot of talented engineers building things that are a bit frivolous. “I’d recommend that people consider arenas outside of the internet, because there are a lot of industries that could use that entrepreneurial talent and the skills that people have learned building those companies.”

Tom Krazit 8:32:49 pm

Do you laugh at photosharing startups considering that you’re going to Mars? asks Kara. “I’m not dismissive of things like photosharing apps; there’s a lot of things that provide a small amount of value to a lot of people, and that sums up to a large value, and that’s still good.”

Tom Krazit 8:31:51 pm

Musk is recalling the Web 1.0 days, when he was part of PayPal and the craziness of those days. “Thankfully PayPal worked out or it would have been quite embarassing.”

Tom Krazit 8:30:53 pm

“I haven’t told anyone this in a while, but I do own one gasoline car,” Musk says. I believe he said he owns a ’67 series E1 Jag: I’m a Ford guy, don’t know if that’s the right model number, but you guys can figure it out.

Tom Krazit 8:29:24 pm

What about technology heroes as opposed to scientists? “I admire anyone who has worked hard to accomplish some great thing. It’s hard not to admire someone like Steve Jobs, Bill Gates, and present-day I’m a big fan of Larry Page.”

Tom Krazit 8:28:34 pm

Who are Musk’s heroes? Tesla, natch, as well as Edison, Darwin, and Ben Franklin.

Tom Krazit 8:27:44 pm

“Nobody would be flying if you had to buy a new plane every flight,” Musk says, commenting on the price of fuel versus the price of the vehicle.

Tom Krazit 8:27:06 pm

Right now, though, SpaceX is kind of like a long-haul trucking network for the International Space Station. “Our breakthroughs on the SpaceX side are incremental, not revolutionary in nature. Our aspiration is to have a revolutionary breakthrough.”

Tom Krazit 8:25:51 pm

“Mars is a fixer-upper of a planet, but we can make it work,” Musk opines. He wouldn’t mind dying on Mars: “All things considered, it would be pretty cool to die there.” It’s an inspiring goal, he says, and that’s the thing that gets him excited.

Tom Krazit 8:24:37 pm

“We aren’t violating any laws of physics. It’s difficult, but achievable, and I think we should really try our hardest to make it happen,” Musk says. Mars is the target because it has the best chance of us being able to recreate life. Mars is colder, but temperature on Mars can hit room temperature in the summer. He jokes that we can simply warm it up with greenhouse gases: “You can bring all the GM cars there!” Walt suggests.

Tom Krazit 8:22:47 pm

Are there dangers? Walt asks. “What could possibly go wrong?” Musk jokes.

Tom Krazit 8:21:42 pm

Reuable rockets are the big aim right now, Musk says. Ones that are reusable quickly and easily maintained. The Space Shuttle was only partly reusable: the orange fuel tank burned up every time, Musk points out. “It took an army of people 9 months to refurbish a Shuttle for flight,” he says.

Tom Krazit 8:20:26 pm

“If we at least have a base on Mars, that’s going to create a forcing function for an improvement in space technology,” Musk says. Kara seems pretty skeptical. “What’s happening now?” she wants to know.

Tom Krazit 8:19:38 pm

Can we do warp drives? Musk claims there have been some breakthroughs on the idea: we can’t exceed the speed of light, but apparently we can warp space itself “so that space is moving,” he says. The audience (including this guy) seems confused.

Tom Krazit 8:18:49 pm

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What got you into space? “Either (life) is going to become multiplanetary, or we’re going to become extinct. … It’s pretty obvious from the fossil records, it’s only a matter of time.” Musk wants to make clear, however, that he’s still optimistic about life on Earth, which is good.

Tom Krazit 8:17:05 pm

George H. W. Bush looked into going to Mars, Musk says, but when he saw the $500 billion price tag, he balked.

Tom Krazit 8:15:59 pm

“The goal with SpaceX is to improve rocket technology and spacecraft technology and to keep improving it every year.” Musk wants to improve the technology, send people to Mars and establish a permanent base there. “If we don’t keep improving space technology, it will never happen.”

Tom Krazit 8:15:07 pm

Now we’re moving into space. Well, we’re talking about space.

Tom Krazit 8:14:57 pm

“If we didn’t speak out against this, that article would live forever and people would have that opinion of the car.” Musk isn’t exactly backing down from the full-court press he put on during that mess, but while the NYT corrected a few things in the article they didn’t retract it either.

Tom Krazit 8:13:59 pm

Walt’s feeling the need to stick up for reviewers: people who review products should state both their methods and opinions based on their testing. Musk acknowledges the point, but claims the NYT review was a “fact thing.” It’s been a while since we hashed out all this, but Katie covered it well here:

Tom Krazit 8:12:07 pm

They work in the cold, Musk says: they’ve sold more Teslas per capital in Norway than anybody else. In fact, the guy who has bought the most Teslas lives above the Arctic Circle, he claims. Who knew?

Tom Krazit 8:11:15 pm

Range anxiety is a real thing, Musk says, which requires the expansion of the network. We’re starting to get into the whole NYT kerfuffle, in which Musk publicly rebuked a review of the Tesla in which the reviewer ran out of charge on a cold day.

Tom Krazit 8:10:15 pm

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A more detailed map will go out tomorrow, Musk says. “You’ll be able to drive all the way from LA to New York using the Supercharger network,” he says. I believe the target for that announcement was by next year.

Tom Krazit 8:07:43 pm

“I guess I might as well let the cat out of the bag,” Musk says to cheers. He starts talking about the SuperChargers, Tesla’s recharging infrastructure for making it possible to take a Tesla on road trip. “We had to make something that was really quick to charge. What we were going to announce tomorrow is that there is going to be a dramatic expansion of the Supercharger network. By next month we’ll triple the coverage area.”

Tom Krazit 8:06:24 pm

Toyota comes up. Obviously, Musk says, they’re big on hybrids, but going pure electric is much different because of the infrastructure involved with charging stations and so on. Musk teases an announcement the company is planning to make tomorrow about charging stations, but resists the temptation to actually spill the beans until the audience starts clamoring for more.

Tom Krazit 8:05:02 pm

A special shout-out to the guy next to me who asked me to type more quietly. You got it, buddy!

Tom Krazit 8:04:44 pm

“I’m hopeful that you’ll observe there is a trend here,” Musk says. Now that Tesla has been profitable he expects that he’ll see a lot more competition.

Tom Krazit 8:03:47 pm

Where are the rest of the car companies? Musk thinks Tesla’s first quarter, in which it posted its first profit thanks (in part) to credits, will spur more companies to take this market seriously rather than considering it “a niche market for techno-geeks.”

Tom Krazit 8:02:47 pm

When will you be profitable without credits, Walt asks. Q4 of this year, Musk says, projecting a 25 percent gross margin.

Tom Krazit 8:02:02 pm

When will there be a $35,000 Tesla? Walt asks. Musk says Step 3, that stage, is probably three or four years away. He reminds us that cell phones took forever to mature, evoking the famous scene in Wall Street where Michael Douglas is walking down the beach with a huge handset. “If we can make it there by our third generation, that’s pretty awesome.”

Tom Krazit 8:00:56 pm

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“There are lots of people here who own Teslas,” Kara observes. Musk thanks the crowd and gets a decent round of applause from the crowd. There are four Teslas parked outside the Terranea at the moment. He specifically thanks Tony Hsieh for buying a bunch of Teslas for his Vegas project.

Tom Krazit 7:58:57 pm

Smog is a real problem in California, as Musk notes, and so both the federal and state governments have tried to encourage car companies to make low-emission cars and state residents to buy them. “Some of the manufacturers were hoping that no one would come up with an electric vehicle that anybody wanted to buy,” leading to reform of those laws, he says.

Tom Krazit 7:57:28 pm

We’re getting into tax credits. People think you’re getting a subsidy on an electric car, but gasoline cars get subsidies as well: they’re just packaged differently through things like gas subsidies, Musk says. There are zero-emission and low-emission credits as well, but those apply to gasoline cars as well.

Tom Krazit 7:54:52 pm

Why these kinds of projects? Kara asks. It’s not like starting a car company is given in today’s tech climate. Musk says he wanted to affect the world, and the internet was the first way he tried to do that through PayPal, and so he was then tempted by “sustainable energy, and space exploration in general. Developing the technology to make life interplanetary.”

Tom Krazit 7:53:04 pm

Tom Krazit 7:52:36 pm

We needed electric cars, Musk says. Even if you’re a climate change skeptic, gas prices would eventually have become unsustainable without research into alternative energy sources.

Tom Krazit 7:50:49 pm

“If people are holding a candlelight vigil for your product, maybe you shouldn’t cancel it,” Musk says, recalling a scene from the movie “Who Killed The Electric Car?” Car manufacturers didn’t think they could make a compelling electric car, and they thought people wouldn’t buy it simply because it was electric, he says.

Tom Krazit 7:49:44 pm

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“This easiest thing for me to do after PayPal was start another internet company,” he says. Electric cars clearly wouldn’t have happened from the major carmarkers, he says, noting the saga of GM’s EV-1.

Tom Krazit 7:48:38 pm

This wasn’t an ROI thing, Musk said. “Starting an electric car company is one of the dumbest things you can do on that scale,” he jokes. But obviously it’s worked out for Tesla at this point: the company’s market cap is high and even though “people regarded it as stupid, insane, or both” Musk is pleased.

Tom Krazit 7:47:37 pm

We’re going to start with Tesla. Why are you in the electric car business, and can you make a profit on this, Walt wonders.

Tom Krazit 7:46:20 pm

Musk was not an easy guest as a D11 speaker, according to Walt and Kara. But here he is.

Tom Krazit 7:45:42 pm

Walt and Kara are out, and we’ll get started shortly.

Tom Krazit 7:44:52 pm

We’re still waiting for Musk. Moby is reminding us that we are all made of stars, though, which is comforting I guess.

Tom Krazit 7:41:32 pm

Ok, one more.

Tom Krazit 7:39:06 pm

I won’t tease you with too many more Terranea pictures, I promise.

Tom Krazit 7:38:00 pm

The view from nearby dinner. Think Half Moon Bay, Bay Area people, only a little warmer.

Tom Krazit 7:37:07 pm

I think that’s Catalina way off in the distance, my SoCal geography isn’t the best.

Tom Krazit 7:36:34 pm

Tom Krazit 7:34:12 pm

As I guessed, this thing probably isn’t going to start on time: Musk was just ushered backstage a few minutes ago before they let us regular people into the ballroom. In the meantime, here’s a few pictures of the Terranea, which is is a great place to stay if you can get your company to pay for it.

Tom Krazit 7:32:52 pm

Hey everybody! That was only a mild panic attack while my LTE hotspot refused to work, don’t worry.


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