Elon Musk: Cheaper Tesla vehicles could be here in three to five years

May 29, 2013
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Elon Musk is talking about all things Tesla at the D11 conference, and one particular area is on when consumers will see cheaper vehicles. As we reported yesterday, Musk wants to build a lower-cost all-electric car, getting them into the hands of more drivers to help combat climate change, among other reasons, something he has spoken about passionately in the past. When asked when we can expect a $30,000 Tesla vehicle, Musk replied: "Probably 3 to 5 years."

He went on to explain the slowish process of getting the electric vehicles down to such a price point, saying that new technology requires "three or so iterations" before it hits the mass market. "Remember the cell phone from “Wall Street”? It was expensive and terrible. And now you can have a supercomputer in your pocket for 100 bucks." He also went on to say such a vehicle will "probably" be 20-percent smaller than the current Model S, which is priced at $70,000 before tax credits, which bumps it down closer to $60,000.

As we reported yesterday, Musk doesn't think competitors' electric vehicles are all that great, such as those from Chevrolet and Nissan. The lower-cost EV he wants to produce will be nicer than the Nissan Leaf, for example, while coming in at less cost than the current Model S offering. Speaking of this particular goal, he'd said that he is "not going to let anything go, no matter what people offer, until I complete that mission."

At the conference, he was then asked why other companies aren't "racing to keep up with [Tesla]". Musk says that in part he feels its first-quarter earnings will help spur other auto makers, stating that back in the Tesla Roadster days, the vehicle has been sidelined by others as a niche product, and that similar attitudes were given on the Model S. Critics claimed Tesla wouldn't be able to make a profit on it, but it did just that earlier this year. "So I hope [other car companies] will observe there is a trend here."

Of course, that leads to questions of when Tesla will be able to pull in a profit without subsidies, something it heavily relies on. Says Musk, "By the end of this year. We’re expecting 25 percent gross margins absent of credits. Well including consumer tax credits, but not subsidies."

SOURCE: AllThingsD


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