Elon Musk, CEO of Tesla, stands in the foundry of the Tesla Gigafactory during a press event. Year.
Patrick Pleul | Image Alliance | Image Alliance | Getty Images
SpaceX and Tesla CEO Elon Musk on Tuesday criticized President Joe Biden for saying his administration was “biased” against Tesla, saying that during a speech on stage at the Code Conference in Beverly Hills, California, unions “ seems to be controlled.
Musk also, in his typically disrespectful form, reiterated several of his previous taunts against state financial regulators at the Securities and Exchange Commission, reiterating his support for cryptocurrency and nuclear power, and saying he was there despite the recent antitrust and cryptocurrency attacks.
Code host and Recode editor Kara Swisher asked Musk to explain the recent tweets he made rebuked President Joe Biden.
Musk sighed. “You know, Biden held this EV summit – didn’t invite Tesla. Invited by GM, Ford, Chrysler and UAW. “
“Does that sound a little biased or something? And you know, just – it’s not the friendliest administration. Seems to be controlled by unions, as far as I can tell. “
Swisher asked him if he was waiting to get former President Donald Trump back or to become president himself, and he said no in both cases.
Swisher asked Musk, who is currently the richest person in the world, according to Bloomberg – To respond to criticism that while his companies have received many government contracts and subsidies, the CEO has avoided paying some taxes personally in the US through creative, albeit legal, accounting practices.
In June, investigative news site ProPublica reported on Musk’s tax bill as part of a massive analysis of billionaires’ finances. They found that Musk’s income tax bill was zero in 2018.
Musk insulted ProPublica’s coverage, calling it “tricky” and “misleading”.
Then he said the number was so small because he wasn’t getting a salary, so his cash compensation was basically zero. Instead, Musk borrows money in exchange for stock options that vest over time.
Since he had accumulated more and more shares in Tesla and SpaceX, he had “not really bothered” to take money off the table by selling a stake. The success of SpaceX and Tesla is far from certain, said Musk. “You have gone bankrupt many times. But I never tried to take money off the table.
The publicly traded Tesla has never notified shareholders that it was on the verge of bankruptcy.
When Musk’s stock options expire at Tesla, its marginal tax rate will be over 50%, the CEO said. “I have a number of options that expire early next year, so … a huge block of options will be sold in the fourth quarter – because I have to, or they will expire.”
“So are you going to pay a lot of taxes at some point?” said Swisher.
“Massive, yes,” said Musk. “Basically, a lot of what I sell will be taxes.”
He said critics might believe wealthy people borrowing against their stocks are “a ploy to get away from paying taxes”. But, he said, this is not uncommon and can be a risky move. “Borrowing for stocks is kind of fun and game until you get into a recession and hit the margin calls and then go to zero, which basically happens every time a recession hits.”
“I definitely put on the record and said that I think our stock price is too high in my opinion, and that hasn’t stopped the stock price from rising,” he said. “So … I don’t know – what should I do, you know? The audience laughed.
“I think it’s important to keep in mind that my actual tax rate is 53%. They’re trying to make it look like I’m paying very low taxes, but the reality is that my taxes are very high. … be paid out in the next three months due to options expiring, “he said.
When asked for comment by CNBC, ProPublica responded with the following statement from Editor-in-Chief Stephen Engelberg:
“Elon Musk’s remarks confirm the veracity of our reporting, which disclosed that he did not pay federal income taxes in 2018. As we have highlighted in our story, Musk has supported his lifestyle by borrowing money against his stock holdings, a textbook example for the known strategy. ” as ‘buy, borrow and die.’ We have pointed out in our history that his tax payments to the government over the past few years were only a tiny fraction of his multi-billion dollar asset appreciation. “
ProPublica sent Musk detailed questions before releasing her June story and he didn’t answer. At Tuesday’s conference, Musk said ProPublica was “not interested” in the truth about its finances.
“We remain interested in his comments on the US tax system or his own strategies to minimize his tax obligations,” Engelberg said on Wednesday.
Swisher also asked Musk about his extensive and sometimes combative use of Twitter. “Go over us if you decide to tweet,” she said.
Musk answered Swisher in a sarcastic tone.
“Well, I think about it for hours. And I consult my strategy team,” he said, laughing with the audience. “Or maybe I’m exhausted and then brrrr-psshht! Path! Let me shoot me in the foot, bam! Now let me shoot me in the foot, bam! That describes some of my tweets. “
In 2018, the SEC sued Tesla and Musk for securities fraud after the CEO wrote on Twitter that he was considering making Tesla private for $ 420 per share and securing funding.
They eventually settled that lawsuit, with Musk and Tesla each paying a $ 20 million fine to federal agencies and Musk relinquishing his role as Tesla’s CEO. Musk also agreed to have his tweets reviewed by a compliance officer at Tesla before posting them if they contained material company information.
“Are you concerned about potential SEC involvement in your tweets?” asked Swisher.
Musk said, “What does that mean again? I know the middle word is ‘Elon’, but I can’t remember the other two words.”
She asked him to answer seriously. “Are you afraid they’ll say, ‘Elon, stop … tweeting.'”
“You mean the Short Selling Enrichment Commission?” Musk asked.
Both comments were allusions to insults Musk made on Twitter in 2020 and 2018, respectively, to the financial regulator.
Tesla made waves in February when it announced it had bought about Bitcoin worth $ 1.5 billion. After the stocks were announced, the price of Bitcoin skyrocketed. In May, when Musk said on Twitter that Tesla stop accepting bitcoins as payment for his electric cars the price of Bitcoin has fallen.
When Musk tweets a recommendation for a specific coin – like he did with Dogecoin – its price tends to rise, at least temporarily.
When Swisher asked about regulating cryptocurrencies, Musk said the SEC should pull out.
“Just let it fly” he suggested.
The People’s Bank of China recently made all cryptocurrency-related activities illegal. Swisher asked Musk if he had any concerns about working in China or if he was concerned about US-China relations.
After praising Tesla’s employees and the vehicle assembly plant in Shanghai, Musk said he was “not particularly” concerned about China right now. As the pandemic subsides and face-to-face meetings resume, “trust” in China with tech companies and overseas companies would “go in a more positive direction,” Musk predicted.
Musk said he believes China may not accept the cryptocurrency in part because of the electricity shortage there and the huge amount of electricity required to mine Bitcoin. However, he also said that cryptocurrency’s potential to diminish the power of centralized governments could make China suspicious.
When Swisher said that Musk alone could “change the shares” of the cryptocurrency more than China did, Musk admitted it. She asked him if that was a good thing. “If it goes up, I suppose,” he said.
Swisher and Musk discussed at length about SpaceX, its competitors, plans to expand the Starlink satellite Internet service, and ambitions to make humanity a “multi-planetary species”.
During their SpaceX discussion, Musk took the opportunity to mock the phallic shape of Blue Origin’s rocket and berate Jeff Bezos for his space travel Company litigation.
“Can you explain, from a technological point of view, why it is this shape?” asked Swisher.
The characteristically rough Musk said, “If you’re only flying suborbitally, your rocket can be a little shorter, yes.”
Musk has stated that he doesn’t actually speak to her Amazon Founder, instead sub-tweets him – meaning he tweets about Bezos without addressing him directly.
When asked about SpaceX creation Light pollution This affected the work of astronomers, Musk said: “We are working very hard to ensure that our satellites do not interfere with their telescopes.” SpaceX could launch some new telescopes with the Starship vehicle, he said, that would have 10 times the resolution of the Hubble. He said that only amateur astronomers are complaining about SpaceX today.
At the end of the session, an audience member asked if Musk was concerned that utility companies might be able to generate and transmit enough electricity to power electric vehicles as they become more popular.
Musk estimates that electricity needs will roughly double as the world switches from gas-powered to electric vehicles.
“This will create a lot of challenges with the grid,” he said. He said he sees the demand as “impracticable” unless significant local electricity generation in households is added by means such as residential solar products such as those sold by Tesla.
In addition to rooftop solar, he said we need to add “large, sustainable power generation developments, mostly wind and solar” to the grid and combine them with battery packs to offset the intermittent nature of renewable energy.
As a final thought, Musk added:
“I’m kind of in favor of nuclear power too. And I’m kind of surprised by the public opinion against nuclear power. I’m not saying that we should build a whole series of new nuclear power plants. But I don’t think we should.” You have that in Germany and had to build a number of coal-fired power plants, and I honestly think that wasn’t the right decision. “