Interview with Bloomberg

the thing that really uh I thought was wrong was was we're looking at the data from this test drive and it doesn't correlate at all to the article that was written and the result was that the the car ran out of range it had to be towed yeah exactly and so there was this sad shot of of our car on a on a flatbed as though that was the only outcome possible for for such a drive and and that's just that's just not true and lots of people said oh you know you should doesn't matter if you're right or wrong you don't the New York Times um and it's like the hell with that I'd rather tell the truth and and the consequences even if they're negative I don't think he it should be the end of his career I don't even think necessarily should be fired um but I I I I

do think he he he fudged he fudged an article so what did you hear in the middle of all of this well we we did actually get a lot of cancellations as a result of the New York Times article so it wasn't I mean it probably affected us to the tune of tens of millions if not maybe on the order of 100 Millions so it's not it's not trivial 100 million probably something on that order yeah so we're talking about probably a thousand cancellations based on this no sorry in terms of 100 million I'd say that that refers more to the valuation of the company I see you're not talking about orders no orders are talking about orders but you're not talking about the amount of the orders equals 100 million no we it wasn't as a th000 cancellations just due to the New York

Times article um there there were probably a few hundred now El you and I talked a lot about production targets so you're pretty much at 400 cars per week right for for the for the model S and you are going to hit it seems like you're going to hit 20,000 um for this year now some might say okay you're going to hit 20,000 this year but what about next year and the year after that perhaps the 20,000 are just the early adopters and that's where the demand's coming from for the in terms of modelist demand we've seen um more new reservations every successive quarter so the demand appears to be growing if one is to extrapolate that trend and we're also seeing that when a Model S is when a lot of Model S's are delivered to a particular area of the country uh

we actually get increased reservations so if it were just the early adopter what you'd see is that when you deliver model Ence to a particular region of the country that you you sales decline dramatically because you've satisfied the early adopters but actually we see the opposite uh we actually see increased sales the more Model S's are delivered to a particular area which means that the word of mouth is very positive for every customer's car that we deliver we seem to to sell an incremental two or three cars okay as a function of that customer um on average and some some customers has been like 20 cars now I know in the fourth quarter um you had issue you you reported a loss in the fourth quarter and part of that had to do with the increase in expenses

um I think it was up 29% to $115 million you also though promise for the coming year that you're going to boost production you're going to as I mentioned you're going to hit 500 cars per week so how are you going to get cost down and boost production the Big Challenge in the fourth quarter was going from um low production rate to to that 20,000 unit a year production rate which was really difficult because I mean that's basically over 400 cars a week in the past with the road stuff we only made 600 cars a year wow so we have to manufacture uh and deliver and Service as many cars almost in a week as we did in a year um so that took you know that's a steep learning curve yeah um and question we made some mistakes along the way and it's not not optimal um

I don't know what more we could have done but there's no question we we weren't perfect there Yan do you think you'd have the same amount of demand for your cars without the government subsidy oh the $7,500 mhm no I think I think it would be a little little less demand I mean there' probably be I don't know 10 to 20% less demand so and you mentioned in your shareholder letter cuz you have this loan from the Department of energy that helps you with Tesla you mentioned that eventually you want to be able to get rid of you know essentially this government help and be a standalone business and be a standalone commercial Enterprise when will that happen we we have actually been paying off interest and principle on the loan on time and that one thing that was

sort of um I think not quite reported uh in in in some of the media last year was it sounded like at one point that Tesla was trying to delay the repayment loan or something but actually nothing could be furthered from the truth we've always paid the loan off um either on time or ahead of time so we've got I think about 10 years we want to pay it off in in five 5 years or less are you learning more though about how to deal with Washington first of all I'd say My overall impression of washing Washington is that it's much less corrupt than people think it is um and and thank goodness for it because if it was corrupt we would be screwed it's not to say that there isn't some some amount of that that that that goes on um but there actually are I think a preponderance

of of the leading um house members and Senators uh actually are quite idealistic and do care about doing the the right thing Elan I was looking through a recent article was actually Huffington Post article where uh it it seemed to portray you as kind of a peculiarity in Washington people don't really know who is this billionaire entrepreneur who's come in and and developed the electric car market he's got this private Spaceship Company one aid for a Congressman Tom DeLay said you show showed up to a meeting with a congressman in a tight black T-shirt I don't remember doing that by the way I I I don't think that's accurate when I'm in DC I always wear a suit in a tie so I believe that is an inaccurate statement why do you think people have that reaction

to you I don't think that's what most people in DC think of me and and I've been I've literally made maybe 200 trips to DC um and I've met with um probably at this point half the Senate maybe 150 Plus members in the house um and they haven't just seen me once they've seen me several times yeah exactly and all the interactions have been like what they've been quite positive actually um and and I I mean I I contrary to the sentiment of that article I mean I believe in being quite respectful in in DC and and I always wear a suit in a tie even though I don't wear it one at SpaceX