Tesla
CEO Elon Musk had plenty to say on Wednesday in an interview with Dealbook’s Andrew Ross Sorkin, including cursing out some advertisers formerly on X.
The hour-plus-long conversation ranged from recent X controversies to the meaning of life, and SpaceX’s Starlink Wi-Fi service. There was a lot for Tesla investors too.
Here are five things Musk said about his car company, along with some context.
The Supercharging Network Is Big Business
“You can look at Tesla as many companies in one,” said Musk. “[If] Our supercharging network was its own company it would be a Fortune 500 company by itself.”
The Fortune 500 list is a list of the largest 500 companies in the U.S. ranked by annual sales. To make the list requires between $7 billion and $7 billion in annual revenue. So Tesla’s supercharging revenue is at least $7 billion.
The supercharging network is like Tesla’s own chain of gas stations. It owns the assets where Tesla owners ‘fill up’ with electricity. Investors don’t get a lot of specific financial details about the supercharging network, but based on Musk’s comment it could account for up to 10% of total sales.
Sales growth should accelerate in 2024 when Tesla opens up its network to more non-Tesla electric vehicles.
How much is an EV gas station business worth? It’s hard to say. Traditional gas station operators have an aggregated market capitalization in the hundreds of billions. Sales aren’t growing for them like Tesla supercharging, but roughly 98% of cars on the road in the U.S. are still powered by gasoline. They still have a much bigger market.
Musk Doesn’t Like Unions
“I disagree with the idea of unions for a reason that’s different than you may expect,” said Musk. “I think unions naturally try to create negativity in a company and create a sort of lords and peasants situation.”
Musk prefers a situation where everyone “eats at the same table,” where workers and managers are in alignment. To that point, Musk said that many line workers at Tesla get stock-based compensation and several have become millionaires through their Tesla holdings.
Humans Are Terrible Drivers
“People text and drive, drink and drive, get into arguments,” said Musk. “What we’ll find with computer driving is I think probably an order of magnitude reduction in deaths.”
Musk, of course, is talking about the potential for self-driving cars. Some 40,000 to 50,000 people die on U.S. roads each year. An order-of-magnitude reduction would put that in the 4,000 to 5,000 range.
Convincing regulators that computers are better than humans might not be as difficult as some people think, says Musk. “In largest numbers that will simply be so obviously true that it really cannot be denied.”
But it’s been hard to get self-driving cars just right and Musk’s predictions about when cars will drive themselves have perpetually missed the mark. “I have some pathological optimism frankly.”
EV Slowdown? What EV Slowdown?
Concern has been creeping in that EV demand is slowing and that U.S. car buyers aren’t ready for EVs yet. Musk, of course, doesn’t see things that way.
“The best refutation of that is that the Tesla Model Y will be the best-selling car of any kind on the Earth this year. Of any kind, gasoline or electric,” said Musk.
That’s impressive. And while battery electric vehicles currently account for roughly 9% of EV sales in America, they account for roughly 15% in Europe and 25% in China.
Car makers just have to build compelling electric cars, he says.
X Doesn’t Matter
Musk isn’t convinced that controversies on X impact Tesla.
“You could hate my guts…you could not trust me. It is irrelevant,” said the sometimes combative CEO. “With respect to Tesla, we make the best cars….do you want the best car or do you not want the best car?”
Tesla stock is up 0.7% in premarket trading Thursday while
S&P 500
and
Nasdaq Composite
futures are both up about 0.2%.
Write to Al Root at allen.root@dowjones.com
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