Elon Musk Talks: 'Several More Years' at the Helm

By · July 23, 2012

Elon Musk

Elon Musk shows off the company's prototype Supercharger, which is aiming for one-hour Model S recharges. (Jim Motavalli photo)

Speculation that, now the Model S has been launched, Tesla Motors CEO Elon Musk is packing his bags for full-time residence at other company Space X can be put to rest. In an interview, Musk told me he is “committed to staying at Tesla for several more years. It won’t be forever.”

Musk is Tesla’s resident perfectionist, and some new hires and investors obviously want him to remain at the helm. A departure now would be disruptive, especially when there are crises, such as the blip in Tesla’s stock price after analyst Theodore O’Neill of Wunderlich said last week that the company would cut third-quarter Model S production from 1,000 to 500.

A Confident Guy

The financial community is wondering when Tesla will start making money, and when stuff like that hits, it’s good to have Musk around. “We never actually reported what third quarter production will be,” Musk told me. “The only number we talk about is the production target of 5,000 this year. It’s not a demand issue: We have orders for well over 10,000 cars. We’re confident that the 5,000 number will be approximately correct. The production ramp is very narrow as we iron out the supply chain, but it ramps up very quickly. We want to be careful about the quality of each car.”

Tesla Model S

The Model S, ready to go in Los Angeles. (Jim Motavalli photo)

And, so far, quality has been very high. I drove the Model S for the first time late last in Mahwah, New Jersey, where Tesla is staging one of its “Get Amped” test drive events for reservation holders. The car I drove was not only a thrilling ride, it was very well made, with nary a squeak, rattle or misaligned panel.

Musk says he is “personally inspecting all the cars before they go out,” which prompted me to ask how the CEO of two major pressure-cooker companies could possibly have the time. “We do it at the end of the day, once a week,” Musk said. “We look for gaps that aren’t quite right, things like that. And we pick cars out at random for test drives to make sure they feel right."

The "Perfect" Car

"People’s initial impression needs to be as perfect as possible," he said. "Some people think we should go for the maximum production rate right off the bat, but we want them to associate Tesla with reliability. So if the cars aren’t coming out as fast as some people would like, I’m sorry about that. But they need to be perfect.”

Tesla is also trying to avoid performance issues, such as the hot-weather range drop that some Arizona owners have found in their Nissan LEAFs. “I predicted that exact thing,” Musk said, adding that the Model S uses liquid cooling for the battery pack and other components. “The Model S has an awesome cooling system,” he said. “We took it out for summer endurance tests in Death Valley, and brought a tow truck along in case it broke down. But it was the tow truck that broke down.”

That "Badass" Truck

Musk confirmed that Tesla might have a “high-tech, badass” pickup truck in its future, and that it is starting work on a smaller third-generation car that could offer an electric alternative to the BMW 3-Series or Audi A4. That would be Tesla’s volume car, with a target of 100,000 cars and what Musk describes as “some cool design innovations to keep the cost down” to around $30,000.
“But it has to be compelling,” Musk said. “It has to have Tesla levels of quality, or we won’t build it. But I’m confident we can get there.”

Indeed, Musk is confident about almost everything, including the company's ambitious sales target of 20,000 Model S cars for 2013. “I have a high degree of confidence in that number,” he said. “I haven’t been as emphatic about the 5,000 cars for 2012--that’s our production target.” The Tesla Factory, of course, has the capacity to produce up to 500,000 cars annually, and Musk doesn’t hesitate when asked how long it will take to get up to that speed. “Certainly less than 10 years,” he said. “Maybe seven or eight years.”

Comments

· Wood Foss (not verified) · 2 years ago

This company hasn't made a lot of mistakes. With the exception of the "Brick" issue which I haven't heard much about lately, they continue to refine, innovate and deliver quickly. I wish it were in my price range. It looks like a beautiful car and seems to exceed everyone expectations on performance. Good luck to them.

· Spec (not verified) · 2 years ago

The cars they've made are really cool and I love that the Fremont NUMMI plant is back up and running . . . but I worry that Tesla is just company that burns investor money creating a high-end niche market. If there is enough demand for them to make a profit at that high end then everything is fine. But there is no way the less than 3000 Roadsters were profitable even at the $100+K price.

· · 2 years ago

I'm looking forward to the BluStar (2015 $30k vehicle). That's when I'll be looking to trade in my Leaf for the next EV!

· · 2 years ago

@Spec,
Actually, the $100K+ Roadster was profitable. They had one profitable month (July 2008 IIRC), however, after that, they went back into growth mode investing everything into making the Model S desirable and more affordable than the Roadster.
In my opinion, this is exactly what Tesla should be spending all of their investor's and Roadster owners' money on.
disclosure, I am a Tesla stockholder.

· cable reel (not verified) · 2 years ago

we are very interesting in such plugs.

· Kevbo (not verified) · 2 years ago

I would love to see what tesla could do with a pickup truck. I would imagine the battery pack would have to be absolutely massive to be able to compete with the hauling and towing capacities of today's gasoline half tons. Unfortunately the price will probably be $100K +.

· Tick tock (not verified) · 2 years ago

ex-EV1 driver

They sold 2,250 Roadsters and have an accumulated deficit of $760 million. The month was July, 2009 and it was aploy to provide cover for the cronies @ DOE to approve the loan.

· LarryC (not verified) · 2 years ago

Thanks Jim for reporting the facts regarding production estimates.

With regard to the caption in the photo with Elon, that's not a prototype supercharger. The level 3 supercharger is a massive industrial device. The red "charger: in the photo is a level 2 device called a High Power Connector. The AC chargers are actually on board the car.

· · 2 years ago

@Tick tock,
Nobody ever claimed that they'd make enough off of selling Roadsters to be able to fund the full development of a Model S in 3 years. However, if Tesla wanted to just settle for being just a boutique supercar maker like Bugoti, Fisker, or Ferrari, they proved they could sustain that business. Despite being often wrongly accused of such, Tesla has always stated their intention was to make affordable, mass-market, electric vehicles.
They seem to be working on just that path forward.
The Roadster's sales and profitability are irrelevant. It was essentially a test-platform. It proved the concept that an EV can perform better than its ICE counterparts and that Tesla can make a reliable, viable automobile. Conveniently, Tesla was able to sell their test-platforms to get customers to do a lot of the testing for them.
The issue for Tesla is whether they can produce the Model S cheaply enough, and sell enough to cover that $760M you mention. They shouldn't, however, be expected to show a huge profit from it's sales since they should, again, be investing any proceeds from the Model S into the Gen III aka Bluestar.
Tesla's smart investors didn't invest for short term P/E ratios, EPS, or other commodity nonsense. They invested in a small company with the expectation that it would grow to become a big company so their stock would increase in value accordingly.

· Anonymous (not verified) · 2 years ago

Hallo fellow Americans!
Please answer the following question: Who in the world needs an electric truck? A hippie farmer? An environmentally conscious red neck? I've been to the States several times and I’ve never had an impression that the roads were so bad that you would need an elevated monster truck to get around. I really do not understand that purely American tendency for stupidly oversized vehicles. It is not like every American has to go shoot some deer on a daily basis in order to be able to provide something eatable for his kids. How does it make sense to put a 1000 pound battery in a 2000 pound car? It is not criticism on Elon’s nor Tesla's strategy, as I’m pretty impressed with that company. I guess it just remains an unrevealed riddle to the “clown-car-driving” Europeans...

· · 2 years ago

@anonymous,
Let me try to answer your question: "Who in the world needs an electric truck?"
Anybody who needs a truck at all needs an electric truck. Unfortunately, in the last 2 or 3 decades, the image of driving a truck has far exceeded the need to drive a truck. This has been great for those in the trades who actually do need to haul things around since there are many barely used trucks available on the market for fairly cheap but it certainly has increased our gasoline dependence.
The other need for truck IMHO has been created by well-intentioned do-gooders who pushed the CAFE laws upon the citizens of the US. In response, the auto makers lightened and subsequently weakened the automobile to where all it can do is carry people and a few things in its truck. It also lead to the killing of low-margin, larger automobiles. Now, if one needs or wants to carry or tow big things, even occasionally, one must use a truck. I can remember my grandfather used to tow his camping trailer with his car, I used to tow a small boat with my parent's station wagon. Today, one must use a truck to carry anything that weighs more than about 100 lbs and full-sized station wagons are non-existant because they drag down the manufacturer's CAFE numbers. Many of my friends and colleagues who drive trucks as their daily driver today could well be served by a much more fuel-efficient station wagon or beefier car but these just don't meet their real world needs.
A few of us like to keep off-road capable vehicles around because we like to get off the good roads to enjoy the remote parts of this country. If you don't have an off-road capable vehicle, you wouldn't understand since you've likely never been to the places I'm talking about.
Unfortunately your suggestion about shooting deer to feed the kids is part of the rugged image that many wish to portray so they, too drive trucks, even though they only use it to drive to Costco to buy food. I acknowledge, that is just a vain waste.
Putting a 1000 lb battery in a 2000 lb car makes sense if you want to get 200 miles of range out of a car without requiring gasoline. Since I assume you're referring to the Tesla Roadster, you'll also find that if you want a cheap battery pack that is good for 500 full charge cycles to last 100,000 miles, you'll also have to put enough batteries to go 200 miles on a charge. Unfortunately, given battery technology today, that is going to weigh 1000 lbs. The good news is that the same 200 miles of battery can produce awesome torque and power in a cheap, small electric motor so that car can be competitive with any supercars on the market, thus creating a viable start-up business plan for a company out to compete with the huge, entrenched incumbents.
Now, my question for the clown-car driving Europeans is why they like to drive $million cars with 700 hp but not enough room to put a set of golf clubs in the boot? How is a Ferrari, Porsche, Lambo, Lotus, etc, any sillier than a Ford F150?

· · 2 years ago

@Anon above:
I need an electric truck. I'm the do it yourselfer, home improver, outdoors man and the guy who's going to help move your couch...well, not yours specifically because you just pissed me off with your rudeness. I guess you've never bought a 4'x8' sheet of anything, lumber, snow blower or anything large. I don't need a jacked to the sky truck, but I do need an 8' bed and 4x4 on a regular basis.
Your judgmental comments only help support the EV industry.
Thank you Mr. Musk for proving the close-minded individuals wrong.

· · 2 years ago

I really don't know if that compagny will ever see profits from his car sales. Their cars are costly and to date the quantities are low. Other cars with the same technology have been eating dust lately like the leaf and imiev, is it the tesla time in the near future ?
I think that the new crop of hybrid like the volt, prius plug-in, etc are more realistic and will outsale these pure battery only fantasy cars. No one will ever travel far with fast chagers infrastructure because of cost of these fast chargers and few money they will be generated by these fast chargers that will see one or two customers per week.

· Anonymous (not verified) · 2 years ago

@Mr. Fusion & ex-Ev: My question might have been put the wrong way. You can make any kind of electric vehicle. But fact is that if you put a li-ion battery in an already heavy body, your milage is gonna go down and if you start towing things around then you should divide the average milage by three or four in order to figure out how far you can get.
Of course there is a market for big cars, as there is a market for anything. As ex-Ev compares the European race cars to the truck segment in the States, I must say that those super expensive vehicles serve only a tiny percentage of the entire European population, whereas trucks probably represent, what, like 70% of the market in the US? Point is that about 80 to 90% of the American population lives in an urban area and if they are really honest, rarely tow things or transport "4'x8' sheets of anything". Of course there are situations when you would need a big truck, e.g. moving or if you want to plant a 1000 years old olive tree in your garden... In those cases you can rent a truck. The money you save on gas by driving a smaller car totally pays of the renting rate.
It is not a fact of need, it is a fact of status and the fact that it is still affordable to drive a ridiculously huge truck, even though everybody is moaning about the gas prices of 4$ a gallon in the States. Double that price and you would understand why nobody would get a car with a milage of 15mpg in Europe.
In my opinion if you really want to move towards electrification of the power train you also need to reconsider your old habits. Besides the costs it is also not wrong to consider environmental effects and waste of natural resources you cause by buying a truck you might need only 5% of the time. Nevertheless I am looking forward to the development of Tesla Motors; it’s been pretty amazing so far!

· · 2 years ago

@Anonymous,
I don't think trucks make up 70% of the US vehicle market unless, perhaps, you consider mini-vans. However, I do agree with you that probably more than 50% of the pickups and SUVs sold today in the US are for that epidemic "status" or image problem that plagues the US.
Unfortunately those who don't have a need to carry 4X8 sheets of plywood like to look like they might or at least like they are capable of doing something with one and they would rather waste gas and pollute than risk losing their facade.
For those who actually do construction, renting a truck every time you have to run to the lumber yard becomes quite infeasible as it extends a 30 minute job into a half day job to reserve a truck (if one is available), pick it up, drive it to the store and home, then return the truck. Many truck rental places don't have a place to leave your car so it becomes a logistical hassle to get someone to drop you off and pick you up.
I, personally would rather get a PHEV truck for my wife who doesn't commute very far for daily use so that the truck can run off of our solar and hence not be such a huge burden.

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