Governors Association Summer meeting in providence, rhode island. He talked about the transportation sectors. This is an hour. Elon good afternoon. Gov. Sandoval welcome. Elon thank you for having me. Gov. Sandoval we appreciate you being here today. Its difficult to know where to start. Lets start with what drives you. When you wake up in the morning, do you see a problem and you want to solve it . Elon the thing that drives me is that i want to be able to think about the future and feel good about that. Can to have what we the future be as good as possible. To be inspired by what is likely to happen and support the next day. Me, is what really drives trying to figure out how to make sure things are great. That is the underlying principle behind tesla and spacex. Its pretty important that we accelerate the transition to sustainable generation and consumption of energy. It is inevitable, but it matters if it happens sooner or later. Making life will to planetary that multiplanetary making life multiplanetary and ultimately make contributions to the. That contra visions to that and ultimately making contributions to that. Gov. Sandoval that is exciting. Elon particularly for americans. America is a nation of excel ccelers. A people who chose to give up the known in favor of the unknown. That the United States is a distillation of the human spirit of exploration. Thats why it appeals to americans so much. You can see this when there was and wase tragedy the dream of exploration that was dying along with those people. Thoseandoval im one of like many of you who remember exactly where you were when the tragedy happened. You have 30 plus governors here today. We are very excited about your willingness to be with us. You hopefully heard me talk a bit about my initiative, which is being ahead of the curve. What do you tell us as governors , what should we be thinking about in terms of innovation and developing Public Policy the future for the future . Elon it is important to get the roles right. Of legislative and executive action, it is sort of professional sports or something. If you dont have the rules , if the game is an set up properly, it is not going to be a good game. Its really important to get the rules right. In therth noting that United States, the rules are still better than anywhere else. Its very easy to put something in place which is an inhibitor to innovation without realizing it. In terms of the regulatory environment, is always important to bear in mind that regulations are immortal. They never die unless the mac sleep goes and kills them and they gain them up they gain a lot of momentum. Nobody goes and gets rid of them afterwards. There used to be a rule in nearly days when people considered automobiles it was a scary thing. You have to carry a lantern in front of the automobile in a lot of states. There has to be someone with a lantern on a pole. You really cant have that regulation. Thats really awkward. Regulation done correctly and being right with the times. Its always good to go back and scrub those periodically and make sure they are still serving the greater good. E sort of tax structure what is economically incentive and what is not economically incentive . Im saying common sense things economics 101 whatever you and sent that incentivize will happen. Does whatever you incentivize will happen. Whatever you incentivize will happen. The economics should favor innovation. Importantrticularly to protect small to Mediumsized Companies. For a new company to grow when its just a seedling or a sapling. It needs a lot more protection. Versus when it is a giant redwood. Its important to give support to small to Mediumsized Companies on the innovation front. Ones that i favor supporting smaller companies. Gov. Sandoval what would your response be . There are critics out there with regard to incentives. Beneficiaryen the of incentives, economic incentives with regard to the giga factory. What would you tell those people . Were ahose incentives little overstated. The giga factory is a 5 billion Capital Investment to get that factory going. Thisnt actually know until we did the press years, the over 20 extra incentives added an 1. 3 billion. They took what added up over 20 years and made it sound like the state was writing is a 1. 2 billion check. Im still waiting for the check. Unless it got lost in the mail. I dont know. This is the way the press works, of course. 20you divide 1. 3 billion by what tesla is on average its basically sales and use tax abatements. 70et on the order of million of sales tax abatement divided over 20 years. For something which has a 5 billion capital cost to get going and would have to generate 100 billion over that time to achieve a 1. 3 billion tax benefit. Essentially, its a little over 1 over that time. That is great. The way it was characterized in the press. Like, ok, that is neat its helpful for setting up the factory and 1 helpful over the next 20 years. Gov. Sandoval that sounds pretty reasonable. Elon yeah. That was helpful. There are a lot of other factors as well. We actually had slightly bigger incentive packages from other states that were offered. We factored in how quickly we could get the giga factory into operations. What were the risks associated with the progress . What would be the logistics costs over time for transferring packs and powertrains to a Vehicle Factory in california . Togetherhose factors let us to make the decision in favor of nevada. Working with your team was great. We were coordinating. Juste card was also feeling that another part was also just feeling really welcome within the state. That is what led us to make the decision for the giga factory. Then we have another factory in europe doing solar panels. It will be the biggest solar Panel Producer in north america when its done. We expect to establish two or three more giga factories in the u. S. In the next several years, as well as a couple overseas. The overall objective of tesla is really what set of actions can we take to accelerate the advent of sustainable reduction in consumption of Energy Sustainable consumption of. Nergy how many years of acceleration was it . Samplean accelerate energy by 10 years come i would consider that to be a great success. Even five years would be pretty good. That is the overarching optimization. Gov. Sandoval you talk about interplanetary travel and Sustainable Energy and the vehicles a little bit. Would you want things to look like in 510 Years Associated with energy and Autonomous Vehicles . I think things will grow exponentially. Theres a big difference between five and 10 years. Is probably in 10 years , more than a half of new Vehicle Production is electric in the United States. Will probably be ahead of that because china has been super pro ev. Chinese Environmental Policies are way ahead of the u. S. Their mandates for Renewable Energy far exceed the u. S. We are under the impression that orna is dragging their feet are somehow behind the u. S. In terms of Sustainable Energy promotion, but they are by far the most aggressive honor. Aggressive on earth. The coalition of chinese Car Manufacturers wrote the Chinese Government to take for them to slow down the mandate. The expect a percent electric vehicles by next year. The cannot physically do it. China is by far the most aggressive on electric vehicles and solar. That is a common misperception that they are not. Theres one way to figure this out. , half of all production i think will be ev. I think almost all cars produced will be autonomous and 10 years. Almost all. It will be rare to find one that is not in 10 years. That will be a huge transformation. , newhing to bear in mind Vehicle Production is only about 5 the size of the vehicle fleet. How long does a car or truck last . 1520 years. Onlyehicle production is roughly 1 15 of the fleet size. Even when new Vehicle Production switches over to electric or autonomous, that still means the vast majority of the fleet on the roads is not. It will take another 510 years before that becomes the majority of the fleet. If you are to go out 20 years, overwhelmingly, things are electric and autonomous. Fully anonymous. Gov. Sandoval no one will have to touch the Steering Wheel . Elon there will not be a Steering Wheel. In 20 years. It will be like having a horse. People right horses, which is cool \ gov. Sandoval having a regular car will be like having a horse . Elon yeah. [laughter] gov. Sandoval it will be unusual to use that as a mode of transport. Lets talk about the energy peace and rooftop solar and storage. Elon first of all, its important to appreciate that the earth is almost entirely solar power today. The sun is the only thing that keeps us from being the temperature of cosmic background radiation, three degrees above absolute zero. Without the sum, we would be a frozen ice ball. Energy is of tremendous. Then 9 plus of all energy on earth. 99 plus of all energy on earth. Big, butvilization is compared to the amount of energy that reaches is from the sun, it is tiny. If you wanted to power the entire United States with solar a fairlyt would take small corner of nevada, texas, utah you only need about 100 miles by 100 miles of solar panels to power the entire United States. The batteries you need to store the energy to make you have 20 4 7 power is one mile by onemile. One square mile. That is it. This ise graph what 100 miles by 100 miles look ls like. Theres a little pixel that is the size of the battery pack you need to support that. Gov. Sandoval you talked about 20 years from now some of us will still be using horses. What will the energy peace look like . Weatherby transmission lines will there be transmission lines . Elon please of energy is roughly divided into three areas. They are more or less equal at a high level. About a third of energy is user transportation. About a third is used for electricity. About a third is used for heating. Of thet to have electricity production, call it something in the order of 10 is renewable. Maybe 15 . Means theres a massive amount of solar that needs to be produced and connected in order to be fully sustainable. Transport,kling nonrenewable electricity is needed we will need a combination of utility scale solar and rooftop scale solar combined with wind, geothermal and hydro and some nuclear for a while in order to transition to a sustainable situation. Massive, massive growth and solar in solar. Its very important to have rooftop solar in neighborhoods because otherwise, they will need to have massive transmission lines built. People dont like having to mission lines through the neighborhood. I agree. You want to have some localized Energy Production combined with utility thats rooftop solar, utility solar that is really going to be the solution from a physics standpoint. We will talk a lot about fusion and all that. Theres a giant fusion reactor in the sky that is really reliable. It comes up every day. [laughter] elon if it doesnt, weve got bigger problems. Gov. Sandoval somebody asked me to ask you this. We talk about workforce today. Are robots going to take our jobs . Seemuch do you Artificial Intelligence coming into the workplace . Elon on the Artificial Intelligence front, i have exposure to the most cutting edge ai. I think people should be really concerned about it. I keep sounding the alarm bell. Going on thebots streets killing people they dont know how to react because it seems so ethereal. We should be really concerned about ai. I think we should ai is a rare case where we should be proactive in regulation incentive reactive. By the time we are reactive in ai regulation, it is too late. Normally, the way regulation is set up is that a whole bunch of bad things happen and theres public outcry and after many years, the Regulatory Agency set up to regulate the industry. Theres a bunch of opposition from companies who dont like being told what to do by regulators. It takes forever. , in the past theres been bad but not something which fundamental risk to the existence of civilization ai is a fundamental risk to human civilization. In a way that car accidents, drugsne crashes, faulty or bad food were not. They were harmful to a set of individuals, but not harmful to society at whole. Ai is a fundamental risk for human civilization. I dont think people fully appreciate that. It is not fun being regulated. It would be prettier some. Thats pretty irksome. In the car business, we can the department of transportation and regulatory agencies in every country. In we get regulated by faa in space, we get regulated by the faa. Do you want to get rid of the faa . And just take a chance on manufacturers cutting costs on aircraft . Hell no. That sounds terrible. [laughter] people are libertarian we should keep an eye on the aircraft compass and make sure their building good aircraft. Theres a role for regulators that is very important. Im against overregulation, for sure, but we have to get on that with ai pronto. There will certainly be a lot of job disruption. Robots will be able to do everything better than us. All of us. Not sure exactly what to do about this. [laughter] its really the scariest problem to me. I really think we need to get regulation ensuring the public good. You have companies having to race to build ai or they will be made uncompetitive. If your competitor is racing towards ai and you dont, they will crush you. Theyre like, we dont want to be crushed, so i guess we need to build it, too. Thats where you need the regulators to come in and say maket need to really sure this is safe. Then you can go. Otherwise, slow down. To doed the regulators that for all the teams in the game. Sure the shareholders are saying why are you disrupting ai . We better do that. 12 of jobs are transport. Transport will be one of the first things to go fully autonomous. The robots will be able to do everything, bar nothing. Elon lets move back gov. Sandoval lets move back what will that look like . Elon it is going well on that front. If somebody orders a model 3 today, they will get it late next year. We just started production. We made the first Production Unit last week. The thing that is not well cars and anybout kind of new technology is how hard it is to do the manufacturing. It is vastly harder to do the minute lecturing by a measure of 100 then to make that one of something. Or 60 people, we can make a prototype of practically anything in six months. , weanufacture that thing who spent three years and that is really fast. Its excruciatingly slow at first and then it grows exponentially. Extrapolate if its real slow at first, it will be real slow we will make five cars a week forever. It will be 10 cars a week, the 20s week, than 40 cars a week, then 5000 cars a week 10 cars a week, then 20 cars a week my week, thenars a 5000 cars a week. Gov. Sandoval i wanted to give an opportunity for the governors to ask some questions. I was told he would be willing to do that. Elon yeah. Gov. Sandoval great. Governor scott . Gov. Scott we in vermont have partnered in terms of power and will homes carry power as a backup device for 24 hours. Its been really interesting from my perspective. Im curious about vehicles and where we are going in the future or how far in the future do these cars themselves become the charging device . Like the roof and deck lids and hoods. Or did the batteries get so efficient that you dont need that and then you just power up . Where are we going in the future with Battery Storage . Elon theres three legs to the stool. His electric cars, Stationary Battery pack and solar power. With those three things come even can have a completely Sustainable Energy future. , it will be aront common nation of rooftop solar desk ality scale solar combination of rooftop solar and utility scale solar. One of the things that is missing up till now is having rooftop solar that looks good. Thats where we got the solar glass roof we are developing. Were doing it in different styles so it matches the aesthetics of a particular house or regional style. I think that is actually pretty important. The conventional flatpanel roofswill be for flat putting solar panels on the cars is not that helpful because the service area of the car is not very much. And cars are often indoors. Its the least efficient space. O put solar may be a wrap of some sort. The components of the vehicle themselves. Elon i dont think so. I will scrap that idea. [laughter] elon its just way better to put it on the roof. I really thought about this. I pushed my team. Is there some way we can do it on the car . Technically, if you have some sort of transformer like thing that will pop out of the trunk like a hardtop convertible that wretched solar panels over the ratchetsatches solar panels over the car and provided you are in the sun, that would be enough to generate 20 have 30 miles a day of electricity 2030 miles a day of like his be. Its a difficult way to do it. I thought about maybe we should. Thank you for being here. With your background in payment systems, you understand the Important Role of security in transactions. Elon Cyber Security is a huge concern. In the vehicles you are building now, there are incredibly complex software systems. Elon it is like a laptop on wheels. Can you share with us your thoughts on Cyber Security and when you have us a rolling fleet . One of the biggest risks for Autonomous Vehicles is somebody achieving a fleetwide hack. In in principle if someone was able to hack the autonomous for example, say send them to rhode island. That would be the end of tesla. A lot of angry people in rhode island, that for sure thats for sure. Sure that aake fleetwide hack is impossible and that people in the car, they have override authority on whatever the car is doing. Button that no amount of software can override the will ensure you have control of the vehicle. Thats pretty fundamental. Car, if someone gained access to the car, there are multiple substances that have encryption. It would access from the train or the braking system. It is my top concern from a security standpoint. Or any specific hack can occur. Its kind of crazy today that we comfortably in a world that George Orwell would have thought is super crazy. Carry a phone with a microphone that can be turned on any time without knowledge, with a gps that knows our position and a camera, and all of our personal information. Willingly its kind of wild think thats the case. Apple and google have the same challenge of making sure there cannot be a fleetwide hack or systemwide hack. For a specific hack. Thats a top concern. Its going to become a bigger concern. Tesla is pretty good at software compared to other car companies. I do think its been to be a bigger challenge to ensure security. Thank you, governor. Thank you for speaking to all the governors today. Its an honor to have you here. Gasoline gasoline prices one to 3. 5 per gallon, there was an interesting hybrid vehicles. You saw those vehicles become very much in demand and gasoline prices have fallen, we have seen a reversal of that. Wondering to what extent you have a concern about the future of electric vehicles in the face thee very low prices . Economics, they kind of set the slope of the curve. Question inwn no my mind whatsoever that transport will go fully electric. Everything, planes trains, automobiles. Its a question of what that timeframe is. The economic structure drives that timeframe. Thats really what it amounts to. The big challenge is that there in the cost of fossil fuels. Probability weighted, harm of changing the chemical constituency of the atmosphere and ocean. Since it is not captured in the price of gasoline, it does not drive the right behavior. It would be like if there was no penalty, just do as much as you want. And other things Like Software with co2 at the top because there are so many on the fossil fuel side. I feel like those guys feel like it wasnt because obvious when they were creating their own Gas Companies that it would be bad for the environment and they worked really hard to create those companies and if you like now they are being kind of attacked on moral grounds. When they didnt really start those companies. True we cannot change to a sustainable situation. Those guys will also fight prehard to slow down the change. Governor hutchison. Then governor hickenlooper and an audience questions. Thank you for being here. The short version of the question and slightly longer, do you ever feel pressure by others expectations of you and your endeavors in light of the progress you have made so are . Made thus far . When you look at tesla alone, you look at a company with a 54 billion valuation, and seemingly my typical margin metrics know andball metrics seemingly by typical margin metrics, by no justifiable reason. Matchedenuity cannot be by those trying to commercialize it, has that ever affected how you think . It is tough one there are high expectations. Record several times saying that the stock price is higher than we have any and thatdeserve area where sure true based on we are today and have been in the past. Reflects a lot of optimism and where it will be in the future. That quitehat makes a difficult emotional hardship those is that expectations sometimes get out of control. I hate disappointing people. Im trying really hard to beat those expectations. A lot of times really not fun, i have to say. To imm not going going down with the ship. Wouldnts i recommend anyone start a car company. [laughter] its not a recipe for happiness and freedom. Governor hutchinson. Thank you for your frank observations about explanation about exploration. I look at the spirit of exploration, which is the hallmark of america. What is your comment on nasa, its mission . I was in congress. I always felt like it is floundering, does not have the support of the American People as needed. Comment on nasa, its mission, and what advice would you give us . The password was i love nasa. Nasa does a lot of good gives for which it doesnt doesnt get enough credit. They are not really into hard science, it is not the thing they are tuning in for. Its not that popular. But there are great things in terms of the telescopes, like the hubble and the james webb. The probes to the outer solar system, those are really great things. To get the public excited you need to get the people in the picture. It is just 100 times different when there are people in the picture. If there is some criticism of picture, if in the you want to get the public support. To a scientist, where is the science and that . Thats not what people are giving you money. The serious scientists, people just make things more expensive. So why do we have people at all, anywhere . Sometimes the scientists are the ones who dont understand. You got to have something that is going to fire people loved and get them really excited. I think of we had a serious goal of having a base on the moon and sending people to mars and said how are we going to do this . We have to change the way contracting is done. You can to these cost plus socialist contracts. As soon as you have done everything, business with substantial urgency goes away. Youre maximizing the costs of the program because they could a percentage. They have become cost maximizers. People engage in cost maximize asian. Tell them they would get punished if they dont. Its critically important we change the contracting structure to be a competitive commercial bid. Least two entities that are competing to serve nasa. And milestone base, concrete milestone. Everything works in powerpoint. There is my presentation. Milestonebased competitive commercial contracts with competitors and then you have to be prepared to fire one of those competitors if they are not cutting it. Nasa has already done this and they did it with a commercial Cargo Transportation to the space station. Those a case for nasa actually they didnt have the budget to do anything else. Going to like we are try this competitive commercial milestonebased contracting and it worked great. They awarded it to Companies Space x managed to meet the milestone. Orbital science got across the finish line area so nasa has two suppliers. It is a great situation. That in thed commercial space. I can tell you the spacex team says were going to do this before bowing. In boeings like we are to do this before spacex. That is good. It is good forcing function to get angst done. Cant tell you how important that contracting structure is. There is way too much and government where it is a cost plus contract. Economics 101. You shouldnt be surprised. If that company manages to find excuse excuse theyre going tot double the profit. They are getting a percentage. They think they can do exactly that. And they are not going to say no to requirements. 10 of them are cockamamie. For the 10 a cockamamie requirements, the contract will always say yes. There could be a future for you in Government Contracting at the same level. Lets go to governor hickenlooper. Like most governors i feel it refreshing to have the unbridled truth be at truth. Youll get calls from investors. I want to go back briefly because i think i wrote this down, he said that Artificial Intelligence is the fundamental existential risk of civilization. My opinion it is the biggest risk we face as a civilization. To a group of leaders, what would you advise that we would address in such a large landscape that is obviously so important . Elon i think one of the rules of government is to ensure that and that dangers to the public are addressed. That is the regulatory thing. The first order of business would be to try to learn as much as possible, to understand the , to look the issues closely at the progress being made and the remarkable achievements of Artificial Intelligence. Year i go, which is a lastt game to beat , which was done by deep mind, which is google, absolutely crushed the worlds best player. Now it can play the top 50 simultaneously and crush them all. That piece of progress case pace ofess that progress is remarkable. Robotics can learn to walk from nothing within hours. Faster than any biological being. The thing that is most dangerous , and it is the hottest the hardest to get your arms around because it is not a physical , is a deep intelligence in the network. What could a deep intelligence in the network do . It could start a war by fake news and fake accounts and just by manipulating information. As an example i want to be the one to emphasize i do not think this actually occurred, this is purely a hypothetical. Digging my grave here. There was that second malaysian airliner that was shut down on the ukrainian russian border. And that really amplified tensions between russia and the area if youive way had an ai where the goal was to maximize the value of portfolio stocks, one of the ways to be to govalue would along line defense, short on consumer, start a war. How can it do that . A row over a war zone, then send an anonymous tip that an enemy aircraft is flying overhead right now. Lets go to governor ducey. Ducey we will finish our gubernatorial questions and then quickly ins and then one audience question, we are running short on time. I really enjoyed your comments, as someone who spent a lot of his time trying to reduce and illuminate regulations, i was surprised by your suggestion to bring regulations before we know exactly what we are dealing with with ai. Example used if i were to come up with a colorless, odorless, tasteless gas that was explosive, people would say you have to ban that and then we would have no natural gas. Given so many examples of how ai can be annexed essential can be an existential threat. Typically policymakers dont get in front of all governors front of entrepreneurs or innovators. The first order of his miss would be to gain insight. Right order of business would be regulatory, gain insight into the status of ai activity. Make sure the situation is understood. Then put regulations in place. And for sure the companies doing ai will squawk and say this is really going to it is going to move to china, it wont. Has boeing moved to china . Same on cars. The notion that if you stab less if you establish a Regulatory Regime none of them do. Unless it is really overbearing. Was talking about making sure there is awareness at the government level. , think once there is awareness people will be extremely afraid, as they should be. One audience question. We will take firsthand that came up. Right here. One audience question. Thanks. Early on in this administration you have argued it was best to engage and better to be in the room than not in the room. Then the president assad to pull out, you said that was the last straw, you are going to drop off. What drove you to that and if you were still speaking to him today what would you say to the president . Doinghought it was worth it was worth trying. I got a lot of flack from multiple fronts for even trying. But some guy attacking me in , justage ads and what not for being on the panel. In every meeting i was just trying to make the arguments in andof in favor of sometimes other issues, we need to make sure our immigration laws are not unkind or unreasonable. In a few cases i think i did make some progress. I really think the paris accord, if i stand on the councils i would be potentially saying that wasnt important, but it was super important, because i think the country needs to keep its word. Its not even a binding agreement. Down. Always slow it if there are job losses before we exit the agreement. Maybe there will be job gains. There is no way i could stay on after that. I did my best. Everybody, if you would please join me in thanking elon. [applause] thank you. Next, live, your calls and comments on washington journal. And then newsmakers with the Ranking Member of the Foreign Affairs committee. After that, the Senate Confirmation hearing for the fbi director confirmation. Tonight, on q a we were speaking about the and howtion of wealth, much trouble you could get into. The author talks about her time in prison after challenging the saudis ban on women driving. You can put three texases. We wanted to change this by this movement and the movement is going on. It never stopped. We are still campaigning for the right to drive. An us, the right to drive is act of civil this obedience because a woman is not supposed to drive. We showed that we are able and capable of driving tonight at 8 00 eastern on cspans q a. Morning, we look at the security of the u. S. Energy grid and recent attacks to systems. And then lawrence noble from the Campaign Legal center discusses how election laws pertain to interactions with foreign nationals or governments. And later, former ambassador James Jeffrey talks about the future of iraq. Well take your calls and you can join the conversation on cspan and twitter. Washington journal is next. Host good morning, sunday, july 16, 2017. Interpol announces a delay on what had been expected of this week on the fort will care act. Affordable care act. We will get to the implications of that delay this morning, but opioidn on the topic of addiction. Late last week, a dozen governors and medical professionals gathered to discuss the issue d