Wikipedia splits induced demand into "latent demand" and "generated demand". I think Elon has no trouble with the idea of latent demand and that by lowering the costs of space travel more will do it. The issue is generated demand, it is a bit irrational to think that a person with no desire for space travel in the first place will say "oh look, space travel is cheap, let's make a satellite". The general story is startups find market fit or they die. You have to find the customers, it is not like you make a product and everyone changes their desires to conform.

Elon is correct.

So-called "induced demand" is just a dumbing down of the more fundamental notion of supply and demand, for people who aren't comfortable thinking about math, calculus, dynamic equilibria, etc. If you read the wikipedia article on it, you'll see they constantly describe it in terms of supply and demand. The term was originally "defined" in 1999 in a paper that was not written by economists. It's not an economics term.

in terms of transportation planning, a better way to think about it is, "misery distributes itself throughout the system".

That is funny!