Thu April 11, 2013
Elon Musk: The TT Interview
Elon Musk, the CEO of Silicon Valley-based Tesla Motors, came to the Texas Capitol this week to lobby legislators to allow his company to sell electric cars directly to customers, a battle that has become increasingly pitched in the face of opposition from car dealers. But his electric car enterprise is not the only legislative push he’s involved in this session: As head of SpaceX, he’s also hoping to open acommercial spaceport in South Texas.
On Wednesday, Musk talked with the Tribune about his effort to get an exemption from state antitrust laws, Texas’ reputation as a business-friendly state and why he wants to launch rockets from Brownsville.
Here's a video of that interview. An abridged transcript follows.
TT: What is Tesla Motors trying to do right now in the Texas Legislature?
Musk: The current law for selling cars requires that you go through the big existing franchise dealer networks. Unfortunately, we’re an electric car. That’s different. It requires one to educate people about what an electric car is about. And the existing car dealers that sell lots of gasoline cars have a conflict of interest relative to selling the virtues of an electric car. So it’s just really hard for them to sell electric cars without counter-selling what is the mainstay of their business. So what we’re saying is, for start-up electric car companies — if there’s a new electric car company, not just Tesla, could be anyone — then they should be allowed to sell direct. Because that’s the only way for us to make our case, in an unconflicted way, to the consumer.
TT: What are the chances your company will get to sell vehicles directly to Texas consumers?
Musk: If we don’t succeed this session, we’ll come back again. But, of course, the Legislature in Texas only meets every two years, so it would at least be two years from now. And what I’ve been told by some is that it takes up to three legislative sessions when it’s something controversial.
Texas is a free-enterprise state that prides itself on being the freest in the nation — I think that’s a good thing. The laws that are in place to protect the big established auto dealer groups are very un-Texas.
TT: Does Tesla threaten existing auto dealers in Texas?
Musk: Our total sales would be maybe 0.1 percent of all cars sold in Texas. There’s 3.1 million new cars sold in Texas every year — we’re talking maybe 1,500. So it’s not like this is taking food from the mouths of auto dealers; this is just a crumb. You’d think they’d be willing to compromise, but we’ve tried every possible compromise, and they’ve just said no, no, no, nothing. It’s like Dr. Seuss, green eggs and ham. They won’t do it in a house, they won’t do it on a mouse.
TT: Why does the Texas Automobile Dealers Association oppose Tesla selling cars in Texas?
Musk: I think maybe they think that if there’s an electric vehicle exemption, somehow that makes them vulnerable, with respect to Ford or GM. But we’ve tried to craft this bill in a way so that it only applies to start-up electric vehicle companies to be as unthreatening as possible.
TT: Have you found Texas deserving of its business-friendly reputation?
Musk: I think it’s true in almost every arena, and unfortunately is not true with respect to car sales. I think as soon as Texans realize that, they’ll be like "Hey, what the heck? We need to change this law. This is very un-Texan."
TT: Is there popular support for Tesla in Texas?
Musk: When they had the House hearing yesterday, there were five people that showed up to testify for the Auto Dealers Association. They were all employed by the Auto Dealers Association. There were 47 people that testified for Tesla. Two of them were employed by Tesla. I don’t even know who all came.
TT: What is the status of SpaceX’s operations in Texas?
Musk: I’m no johnny-come-lately to Texas. On the space side, we’ve been operating in Texas for now over 10 years. We have our main rocket development facility in Central Texas near Waco. The people of McGregor and Waco and the general area have been incredibly supportive. That’s part of why I was like, "Yeah, it’s really great doing business in Texas." When we do big, exciting things, they’re cheering us on and it’s good. So when it came time to say, where are we going to put the world’s first commercial orbital launch site, me and the rest of the team are like, "Hey, we should do it in Texas. We’ve had such a good experience."