Tesla Motors’ billionaire chief executive Elon Musk walked into the enemy territory of Detroit this week with the electric-car maker quickly losing charge. Chevrolet’s all-electric Bolt, which some called a “Tesla killer,” promised a mass-market rollout matching what Tesla’s future cars would offer and cost. And, analysts warn, record-low gas prices threatened to deflate the electric-car market altogether.
But in his first public appearance in Motor City in two years, the face of America’s electric-car movement doubled down on his promise to revolutionize the auto industry, pledging to make millions of electric-cars a year by 2025 — up from goals of about 33,000 last year. And about all those high-powered rivals at the door? They should, he said, invest even more toward electric cars. In other words: Bring it on.
Musk has long criticized his compatriots in the auto world for their sluggishness in developing battery-powered cars en masse. That criticism, and many others, have made Musk the man the auto establishment loves to hate, the ultimate outsider in a car-making capital of insiders who think he’s overhyped or hate his guts.
Now that automakers are starting to push back with designs that could give Tesla a run for its money, the South African-born firebrand isn’t backing down. In fact, Musk is chalking it up as a new victory for his mission to accelerate the advent of electric cars and, as he said, “make a difference in the world.”
“It’s sort of counterintuitive, because, why do we want all these competitors?” said Musk, 43, during a Tuesday appearance at the Automotive News World Congress in Detroit. But he reiterated the real environmental benefits will only happen “if the big car companies make risky decisions to make electric vehicles. I hope they do. We’ll try to be as helpful as we can.”
Musk became the man to watch for having built the first new American automaker in years from the ground up. No executive at the North American International Auto Show this week in Detroit won as intense a spotlight, or polarized as many, as Musk — even though Tesla remains a relatively small player in the auto world, with only one car for sale and other models hit by long delays. (“I do have an issue with punctuality,” he said.)
Musk’s goal to seize a large part of the auto market has put him at odds with the industry’s competitive traditionalists. On Tuesday, Musk pledged that Tesla would sell “a few million cars” by 2025, making it the size of BMW now.
That seems optimistic, considering Tesla’s hold on the electric-car market lost some sparkle this week with other automakers’ electric unveilings. The Chevy Bolt and new Nissan Leaf, set for 2017, promise 200 miles on a single charge, for cheap: The Bolt is set to cost $38,000 before tax credits. And if that won’t hurt his goals, gas prices will. Oil dropped this week to below $45 a barrel, the lowest in more than five years.
Musk said gas prices would be low for “a long time,” which could hurt electric cars’ adoption by some price-conscious drivers. But he said there would still be a “huge societal pressure,” amid a host of environmental benefits, pushing drivers away from fossil fuels.
Electric cars, he added, would still be cheaper to run than gas-powered cars even with today’s bottom-barrel gas prices. And in the more than 30 other countries where Tesla sells and gas is pricier, the change in fuel prices will make even less of a dent in demand.
If all this sounds like eco-friendly hooey, remember that Musk has long pushed for automakers and energy giants to do something in the face of climate change. Last year — after having pioneered faster chargers, safer batteries and a heap of other electric-car innovations — Tesla opened its hundreds of patents for all the automotive world to use, free of charge, as a way to spur automakers to improve.
As for rivals’ electric car lines, he said he didn’t see them as a “competitive threat, because I think all cars will go electric,” Musk said. “There are 100 million new cars made every year. So what does it matter if someone makes a few hundred thousand additional electric cars? It’s not going to affect us, really.”
For all its hype, it’s easy to forget that Tesla sells one car, made at one factory: the Model S, an all-electric sedan that sells for more than $70,000. Valued at about $25 billion, Tesla is less than half the size of GM or Ford. But seven years after the automaker sold its first Tesla roadster, Musk said the automaker still struggles to make enough cars to meet demand — even without spending a cent on advertising.
Tesla’s giant rivals can’t help but take notice. In an earnings call last year, Ford chief executive Mark Fields even said of Tesla’s star car, “We have driven the Model S, torn it down, put it back together, and driven it again. We’re very familiar with that product.” Asked Tuesday whether he intended to do the same with his new competitors, or whether he found anything he wanted to emulate, Musk issued a laughably terse, “No.”
Tesla’s market-watchers have sounded the alarms amid some recent sour notes. The automaker’s stock has slid more than 25 percent since peaking in September, on the back of the emergence of other electric-car competitors and lower gas prices. Though Tesla’s revenue grew in the first nine months of 2014 to more than $2.2 billion, a 60 percent boom from the year before, the automaker has never secured a yearly profit.
But with his signature swagger, Musk brushed off investor worries, calling short-term stock shifts “not important” and pledging that the company would be profitable by 2020. A slowdown in China that spooked investors, Musk added, was due to a misperception among Chinese city-dwellers over the difficulty of charging the cars.
Musk, who is also chief executive of space-travel firm SpaceX and co-founder of online payments service PayPal, said he intends to stay at Tesla “as long as I’m alive” — without any fears a potential “Tesla killer” would do him in.
“Some degree of success is assured,” Musk said. It’s only, he added, “a question of magnitude.”