Mike's Minute: I think Elon Musk is wrong

Author: Mike Hosking ,
Publish Date: Thu, 30 Jul 2026, 10:40am

If you have time, there's a podcast from The Economist that features Elon Musk in it and he argues that AI will lead to so much productivity that you won't need money because things won't cost anything.

It was so odd that;

1) It didn’t make sense.

2) I'm not sure even he understood what he was saying or, even if he did, if he believed it.

But the thrust was, when things are produced in abundance if they are not free, they are pretty close to it.

My question is if it gets to that then who is going to produce anything?

Someone has to build the robots. If there's no return, why build them?

Which is where the price of power comes in. The wholesale price spiked this week because of the cold weather. But did it spike more than it needed to because supply, although better than it was, is not what it should be?

It went from $64 to $240 a megawatt per hour. In a world of renewables why are we not at the point where we have abundance?

Abundance is argued to be the cornerstone of growth. If your base materials are cheap, you can do more for less. That is productivity.

But to get to abundance in power someone has to dig a hole, or build a panel, or a windmill, or provide a battery. And although we seem to be doing that, do we ever do it to a scale where the conversation in winter is not about issuing notices to generators that Transpower needs more sauce to pump through to the heaters on a cold night?

Or is a $64 to $240 jump as good as it gets?

Also remember our current state for this winter of generation is helped by good rainfall, which remains a crap shoot. In other words, this year we are lucky. In other years we may not be.

Also remember in this new renewables age we are currently being told power prices for commercial operators is at last dropping. But they aren't for the rest of us because of retail and fees and lines and so on. In other words, can one ask whether Nirvana is never actually coming?

There will always be someone in the chain having to boost the prices and that offsets gains elsewhere.

Is your power bill dropping? No. The new age is here.

There seems no way around the tension that you must have profit to encourage the investment.

Which makes Elon wrong, doesn’t it?