Interviewed at the Offshore Northern Seas conference in Norway — and oil and gas convention, incidentally — Elon managed to eke out some sage words in between interruptions from his enthusiastic but antsy interviewer. The quotes are verbatim. Everything else is paraphrased.
Why are you here, at an oil and gas conference?
Because Norway is big into electric vehicles.
Why is Norway so big on Tesla?
One reason is strong government EV incentives. However, Denmark has strong incentives without the big sales numbers. The difference is that Norway has very vocal Tesla enthusiasts.
Tell us about the Gigafactory
“In order to make a lot of electric cars, you need a lot of batteries, and the lithium-ion battery capacity of the world, I mean in terms of production capacity, is really not big enough yet, nor does it make the most advanced type of batteries that we really needed for long-range electric cars. So in order to solve that problem, we found there was really no choice but to build a really enormous factory, called the Gigafacory, so-named because we’re targeting about 50 gigawatt hours of output.”
And not just for cars, right?
“About a third of the output of the Gigafactory is intended as stationary storage, primarily to be paired with renewables, but also to do grid buffering in non-renewable situations . . . I think we’ll see a really huge demand for stationary storage . . . It’s worth noting that the world could be powered many times over by solar, if you had enough battery capacity to pair with it . . . You could power the entire United States with about, say, 150 to 200 square kilometers of solar panels. Take a corner of Utah. And there’s not much going on there. I’ve been there.”
What kind of a threat do you think you are to the oil and gas industry?
“I don’t think we’re much of a threat. I mean yet. The more obvious threat is that we’re going to run out of hydrocarbons to mine and burn . . . It’s getting harder and harder to find hydrocarbons and much more expensive to extract them . . . There are time extensions on the game, but the game is going to come to an end . . . If you’re in non-renewables, it’s like you’re stuck in a room where the oxygen is gradually depleting . . . The solar resource is the thing that’s really going to preserve the long-term future, not so much the oil and gas . . . In the future, we’ll look back — and by the future, I’m not talking about super-far in the future. I’m talking about toward the end of the century — we will look back on gasoline-powered cars the same way we look back on coal, as some sort of quaint anachronism that’s in a museum.”
Why did you give away patents?
“When I was first starting out, developing technology, I got lots of patents and felt this was a good thing, and then I sort of discovered that a patent was really like buying a lottery ticket to a lawsuit, so it’s like, I’d rather not buy those tickets. And you look at the battle between Apple and Samsung, and who’s really winning there? You know, the lawyers are winning, certainly, but neither of those two companies. And in the case of Tesla, I thought, would Tesla ever sue some other car company if they were using our patents, to try to make them stop making electric cars? We would never do such a thing. So why pretend that we would?”
Does sharing patents boost Tesla’s business somehow? A rising tide lifts all boats?
“Maybe it can lift the industry as a whole. And I think it generated some good will, and I think that good will is helpful. You never know where it pays off.”
When will people go to Mars en masse?
About 25 years, once the ticket price falls below $500,000.
How does one go about really reducing the costs of a venture?
“Well, you have to innovate. You have to do different things. And there has to be tight feedback loop on innovation. And one of the things that’s advantageous in the way SpaceX operates is that the engineering team and the production team are in the same facility, and there is good communication back and forth, so as the engineers see they’ve built something that’s difficult to manufacture, they can adjust their design quickly to make it easier to build. And so the pace at which we’re able to do new versions of the rocket is much faster . . . There must be an expectation of innovation. Establish an expectation of innovation and the compensation structure must reflect that . . . There must also be an allowance for failure . . . If you punish people too much for failure, they will respond accordingly and the innovation you’ll get will be very incremental.”
Any collaboration between SpaceX and the oil industry? Asteroid mining? Drilling on Mars?
“The most likely Mars architecture that I think makes sense is a methane/oxygen system. Methane is the lowest-cost source fuel on Earth. And with rockets, you can’t really make a rocket electric because it’s got to react against something. Once it gets to a vacuum there’s no air or land or water to react against, so you have to burn something really. So I think a methane-based system is going to be what makes the most sense. Once you get to Mars, I think there will be some drilling activity, particularly to find out if we can get to underground lakes. To find water that’s heated by the Mars central core. That would make it a lot easier to develop propellant on Mars. Critical to any Mars colonization is the ability to generate fuel on Mars. You need to generate methane on Mars, which you can do because Mars has a CO2 atmosphere and there’s a lot of frozen H20 around.”
What changes would you make if you were CEO of an oil and gas major?
Invest in renewables.