Elon Musk has a lot to say about the character of American people. He recently said that Americans are ‘entitled’ and ‘complacent,’ in stark contrast with the ‘smart’ and ‘hardworking people’ of China. This was in the first part of a three-part interview with the Daily Drive podcast hosted by Automotive News.
Musk was also critical of the policies implemented by New York and California, although these states have provided considerable support to his companies, mainly Tesla, with tax breaks and regulatory credits, among other things.
The interview was conducted by Jason Stein, who is also a publisher at Automotive News. He asked Musk, “How about China as an EV strategy leader in the world?”
His reply was as follows: “China rocks in my opinion. The energy in China is great. People there – there’s like a lot of smart, hardworking people. And they’re really — they’re not entitled, they’re not complacent, whereas I see in the United States increasingly much more complacency and entitlement especially in places like the Bay Area, and L.A. and New York.”
Musk’s views aren’t surprising given that China has greatly helped Tesla. Last year, the company received loans of around $1.6 billion from the Chinese government to start manufacturing vehicles at the recently constructed Shanghai factory. The Shanghai government helped the company mitigate the impact of the COVID-19 pandemic and resume operations as soon as possible. This is post the lockdown it imposed in response to the pandemic, which caused Tesla to temporarily suspend its operations.
Musk also said that this company didn’t receive as much support from the government as domestic companies: They have been supportive. But it would be weird if they were more supportive to a non-Chinese company. They’re not.”
He praised the Chinese government and people despite his aversion towards communism. He expressed this in a tweet he posted on Monday, referring to social welfare schemes and Karl Marx’s ‘Das Kapital.’
Das Kapital in a nutshell pic.twitter.com/mG44mMkitx
— Elon Musk (@elonmusk) July 27, 2020
In the Automotive News interview, Musk also commented that the US, California, and New York are similar to sports teams that might be losing their winning status. This is what he said:
“When you’ve been winning for too long you sort of take things for granted. The United States, and especially like California and New York, you’ve been winning for too long. When you’ve been winning too long you take things for granted. So, just like some pro sports team they win a championship you know a bunch of times in a row, they get complacent and they start losing.”
He further went on to lament that “Tesla has had the least government support of any car company” in the US.
He also said that Tesla repaid a loan to the US Department of Energy before the due date.
What he’s referring to is the loan given during Obama’s presidency. In June 2009, the Department of Energy provided Tesla with a loan of $465 million to construct automotive assembly plants in Fremont, California, and start manufacturing its all-electric sedan- the Model S. Tesla paid off this loan along with the interest before May 2013, which is nine years ahead of the due date.
This loan seems small when compared to the billions of dollars of TARP loans that were given to General Motors and Chrysler during the 2008 financial crisis.
Because of the recent that the American economy is currently facing, Tesla has been given other kinds of assistance from the US government as well. An analysis conducted by the Los Angeles Times concluded that the government assistance Tesla received in the US is well beyond $4.9 billion.
This includes more than $200 million in sales and use tax breaks, given by the California Alternative Energy and Advanced Transportation Financing Authority. The state also awarded the company with credits for zero emissions and the use of solar renewable energy. These credits allowed Tesla to improve its profitability over the last four quarters.
In addition, Tesla also benefited from the assistance given by New York. The state spent around $959 million on a factory manufacturing solar panels in Buffalo, operated by Tesla. This was an attempt to boost tech and manufacturing jobs in the state.
The expenditure aimed to bring around 1000 of these jobs, but this head count was not met by Tesla yet. As per a recent filing, New York gave Tesla another year to achieve this goal. Otherwise, the company will have to repay $41 million to the state.
Moreover, Musk was also asked about Tesla’s share price skyrocketing by a whopping 240% this year. He said:
“It’s not worth trying to massage the stock market or manage investor expectations. It’s just. You know? At the end of the day, if you make great cars and the company’s healthy and making great products investors will be happy…If you make lousy products your customers will be unhappy and then your investors will be unhappy.”
He went on to offer advice to other business owners:
“My advice, you know, to corporate America or companies worldwide is spend less time on marketing presentations and more time on your product. Honestly that should be the number one thing taught in business schools. Put down that spreadsheet and that PowerPoint presentation and go and make your product better.”
He also thinks that direct-to-consumer car sales- in which consumers can place an order online and the company will deliver the goods directly to them- are the future of sales, especially after the COVID-19 pandemic. The number of brick and mortar stores, dealerships and showrooms may reduce. “Having a traditional dealer situation, I think, seems increasingly unnecessary and I think probably the pandemic just reinforced that,” he commented.
He said that Tesla received “strong orders through the whole pandemic.” The company reported its deliveries fell by around 5% and its sales by more than 30% in the second quarter of this year.