Tesla Motors CEO Elon Musk joined us on Thursday for a detailed discussion of his business plan and his vision for the electric car future. One outstanding issue for him remains whether he can make his cars affordable for average people — the original Roadster costs $109,000, and even his forthcoming Model S will cost about $50,000.
Musk told host Tom Ashbrook that the “absolute goal of Tesla from the beginning has been to provide a car that you can afford. There is no effort spared to try to get there as soon as humanly possible.” He went on to put a potential price tag on Tesla models in the near-term and longer-term future:
I think the sports car is cool, but really we want the mass-market car, that’s what we want to get to, as soon as we possibly can. We’re trying to grow as fast as we can to do that. I feel pretty confident we can get to a compelling sub-$30,000 car in five years. And one thing I should also point out is although the sedan will be $50,000, because the cost of electricity is so much less than the cost of gasoline and you’ll be able to lease our car or finance our car, buying our Model S will be equivalent to buying maybe about a $35,000 gasoline car, when you take into account the lease payments of a gasoline car versus the electric car and the cost of electricity versus gasoline. So it’s more affordable than it first seems. Even so, we’re working as hard as possible to get to that third generation car.
Musk added that Tesla has “a potential secret project that could advance that schedule, but I can’t talk about that because we don’t know if it will transpire.” He also addressed the issue of American competitiveness in the electric car market worldwide. Germany and China, among others, are already moving fast. When Tom asked whether he could see the U.S. becoming an important manufacturing center for electric vehicles, Musk replied, “Absolutely, I think the United States will probably be either the first or second largest manufacturer of electric cars. The only competitor realistically is China.”
And here’s an update on another electric car angle that On Point has been pursuing. One of Musk’s competitors in the race for an electric car future is another young entrepreneur, Shai Agassi, CEO of Project Better Place. Agassi believes that building a network for battery distribution is crucial in terms of achieving large-scale use of electric cars (he’s working with Renault). Earlier this month, he unveiled a new breakthrough at the Frankfurt Auto Show. Agassi appeared on On Point earlier this year. He explained his vision to us this way:
What we brought in, which was somewhat of an innovation, is the concept of switching your battery, on the freeway, on the long drive. So if you go from New York to D.C., somewhere in the middle of the drive, you would go into what we call a switch station. It looks and feels somewhat like a car wash. Only instead of washing your car, an arm comes from below the car, takes out your depleted battery and puts in a full battery in its place. And within a minute or two, you’re back on the road. So it’s actually faster to do it than to fill up gasoline.