Elon Speaks; Should We Care?

Elon Musk was on this recent All-In podcast – and he made a lot of waves with his comments.

I listened to it simply because All-In is one of my favorite podcasts in general.

And – I thought there was one comment in particular that was super interesting because it relates to the mortgage industry.

Musk was explaining how Tesla is not just a car company, but many businesses rolled into one (which might explain the high stock price): (1) a sales and service operation; (2) a Supercharger network; (3) a battery company; (4) a parts manufacturer; (5) a software company; (6) an AI company; (7) a chip fab company; (8) a super-computer company; and (9) an insurance company.

It was the insurance company that fascinated me because Tesla now offers “real-time” car insurance based on how a person actually drives, as the car monitors everything and gives people a driving score which dictates their insurance rate. It is a bit “big brother,” I realize, but it can shave as much as 40% off someone’s insurance costs.

This fascinated me because we could easily use AI in the mortgage realm to customize interest rates for every borrower. It would also take about 30 seconds to qualify for a mortgage using AI, as the AI would just instantly search a person’s investment and bank accounts, payment histories and credit, and employment history along with a bunch of other data points – and boom – there would be a qualification that would be more accurate and valid than anything we do today.

The reason this doesn’t exist now is because politicians and entrenched players don’t want to give up power or their market positions – under the guise of protecting consumers (of course).

It will be interesting to see if “Big Insurance” (the entrenched players in the insurance industry) go after Tesla’s insurance play – because I suspect they will (under the guise of protecting consumers 😊).

Here are a few of the other things Musk said:

Twitter. He discussed Twitter of course and the importance of having uncensored free speech, and how it is good that the press and people can tear him apart when they don’t like what he says.
Original Tesla Partners. Musk was not the first guy at Tesla, but he was the first to actually create or build anything. His initial partners though are taking credit for much of it, and that is a great reminder to be careful whom you partner with because Musk’s issues are a recurring theme in so many business startup stories.
Failures and BK. He talked about his many failures and how close he was to bankruptcy on numerous occasions – another recurring theme with all startups.
Nuclear Fusion (endless power supply like the sun uses). Musk says it will never be practical, despite so many other “futurists” saying it will.
Solar to power the entire U.S. Musk says that instead of building our own fusion plants, we could take advantage of the sun’s fusion instead by building a huge solar farm. A single farm that is 100 miles on each side could power the entire country, according to Musk. 100 miles by 100 miles is obviously a huge chunk of land, but not that big when you consider the tens of millions of empty acres available in the western U.S.
Recessions are good. Musk pointed out that recessions are good in some ways because they stop the misallocation of capital – in investments that don’t provide goods or services that people want or need.
CA is a one-party state. Most of CA’s issues are because it is effectively a one-party state, per Musk, so politicians only respond to campaign donors and not to voters.
Population decline. Musk says that this is one of the most serious issues we face in the world right now because we need a growing population to survive and thrive.
TX vs. CA. It took him 18 months to build one of the world’s largest and most sophisticated factories near Austin, TX. If he had tried to do so in CA, he said he would not even be past the permit stage because there are so many interests in CA intent on stopping everything.