Automotive

Cheaper Cars from Tesla in 3 Years, says Musk

Tesla chief executive officer Elon Musk indicated that the automaker could take around three years to come up with a low-cost version of a car, even he also admitted that such a goal would be “really tough” to do on the backdrop of the sector’s economics and competition.

Elon Musk smiles at the camera

In the midst of the recent turmoil surrounding Musk’s stated goal to take Tesla private, the CEO sat down and participated in an interview to discuss the future of electric cars.  Musk explained that the company’s comparatively smaller scale made it difficult to compete against major producers like General Motors and Ford, with their massive scale in an “insanely competitive industry.”

Musk said that the company was “really focused making cars more affordable.”

“In order to make cars more affordable, you need high volume and economies of scale,” Musk said, and then said that it was possible for Tesla to eventually make cheaper vehicles with higher quality.

“I think in order for us to get up to…a 25,000 car, that’s something we can do,” he said. “But if we can work really hard I think maybe we can do that in about 3 years.”

He also added that it depended on both time and scale, comparing the car manufacturing evolution to the early years of the cellphone, which were then bulky and with scarce functionality.

“With each successive design iteration, you can add more things, you can figure out better ways to produce it, so it gets better and cheaper,” explained Musk, adding that with “natural progression of any new technology, it takes multiple versions and large volume to make it more affordable.”

Musk boasted that Telsa whips out virtually nothing on advertising and endorsements, depending heavily on worth of mouth.

“Where I put all the money into and all the attention into is trying to make the product as compelling as possible,” said Musk, adding that the key to selling a product is having something people love and will talk about.

“If you love it, you’re going to talk and that generates word of mouth,” he said, explaining that the company doesn’t spend much on advertising, adding that even he pays full retail price on his Tesla cars.

Musk’s interview was published in the aftermath of an unusually personal interview in which the CEO displayed rare moments of emotion as he explained the pressures of meeting a recent Model 3 production milestone.

The report sent Tesla stock reeling during last Friday’s trading and laid bare different worries among Tesla board members about Musk.

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