Tesla Motors plans to roll out a “compelling, affordable electric car” that will sell for about half the price of its high-profile Model S by the end of 2016, company chairman Elon Musk said last week.
“We definitely need to be able to bring a lower cost car to market,” Musk said at the company’s recent annual shareholders’ meeting. “Hopefully, in about three to four years we will be able to do that.”
Musk’s statement was consistent with past comments. In 2012, he predicted that half of all cars on the road would be fully electric within 12 to 15 years. Last week, he added that an affordable EV “has really been my goal since the start of Tesla.”
Tesla CEO Elon Musk: “That has really been my goal since the start of Tesla.” (Source: revengeoftheelectriccar.com)
Musk, clad in blue jeans and a T-shirt, provided few details to attendees at the shareholders’ meeting. He did say, however, that the vehicle would be a “smaller version of the Model S at about half the price.”
To date, Tesla’s vehicles have been sold at luxury-car prices. Its Roadster started at $109,000. The base Model S starts at $69,900 for a 60-kWh battery pack and goes up to $79,900 for an 85-kWh pack, before federal tax credits are applied. If the new vehicle sells for half the price of the Model S, it could potentially run as low as $30,000 after tax credits are applied.
At the meeting, Musk talked little about battery technology, except to say that he believes the creation of a battery for an affordable EV with a 200-mile all-electric range is doable. “There’s definitely a significant improvement in technology needed to have a compelling, affordable electric car,” he said. “We are working with companies like Panasonic and others on new cell electrochemistry that’s really optimized for automotive use. I feel pretty optimistic that we can get there without any miracles occurring.”
@Charles, thanks for the post. Electric vehicles are the future of the motor industry as they are energy efficient, environment friendly as well provide smooth operation and stronger acceleration. Their batteries are heavy, take considerable space and are expensive making them unaffordable.
Nice article, Chuck. An affordable Tesla could make a big difference in the development and acceptance of EVs. Recharge will become a big issue, especially the time involved. I understand that the switching batteries model has crashed, so it probably comes down to the speed of a recharge and the number or recharge stations.
EVs face issues like driving range and recharging times. Driving range for EVs can go about 100–200 miles before recharging, which is a concern on long distance drives. Number of recharge station is very less compared to number of fuel station. Recharge station and recharging time are also main issues needs to be addressed by EV manufactures.
Excellent update on this technology. It's easy to see the tipping point in creating affordable EV is hitting the lower price point while also maintaining range for the vehicle. That will make a big difference in how quickly the technology will be adopted.
I agree, Al, so don't worry, Cabe. It will happen, maybe not in the time frame Elon is suggesting but at some point in the near future (I hope, too!). Although 2016 seems like a doable time frame.
On another note about "lifetimes," is it me or are leaders of these visionary companies seeming to get younger and younger?? (Or am I just getting older? Probably the latter.) From his photo, Mr. Musk looks like he could be designing Tinker Toys, not affordable EVs. ;) I looked it up, though--we are the same age! I should be so accomplished...
If true is this a sustainable buisness model? Are they losing money on the product itself?
On the Volt I have been reading that sales are down even though the car market is up in general. Incentives from GM are on the way. Are we looking at market saturation already? And this is a PHEV that is already in the price range Musk is looking at, plenty of green cred and no range anxiety issues. Hmmm.
IMO until the battery range is reliably (and affordably) well above 200 miles and recharging is quick and widely distributed the market for pure EVs will be very limited at any price.
The problem is not one of market saturation. In fact, it is the opposite. The people who really need to have electric vehicles - those whose income is mostly from driving (cab drivers and some small limousine lines come to mind) cannot afford to move to an electric vehicle because the unit price is still relatively high for a 'base' model. Also, the guy who drives 90 miles each way to work as a software developer for a company that is paying him H1-B Visa wages rather than what he actually needs to make to pay for his student loans (well, come to think of it, it is not just the software industry that faces that idiocy now is it?) cannot afford to shell out half of his salary for a new car, regardless of how little gas it burns. The problem is, who defines 'affordable'? Henry Ford once said that his goal was to '..make a car so inexpensive that any man making a decent salary could afford one...' Again, what is deemed to be 'a decent salary'?
If we really want to make an 'affordable' electric or even hybrid car, we need to look at the median American salary. Yes, for all of you math geeks out there, I said MEDIAN, not MEAN or AVERAGE. For non-math-geeks (in an engineering forum, that is highly unlikely, but this is a web site after all) the median salary is the one real salary that is closest salary to the middle of the pack. Now, perhaps a better choice would be the mode (the most frequently occurring) salary, but we should settle for the median, which is most likely a lot lower than the arithmetic mean. In fact, salaries like those of Bill Gates and Warren Buffet won't affect the median at all, nor will H1-B's sub-standard wages. By the way, that median salary in 2011 was $26,364 according to http://www.huffingtonpost.com/2011/10/20/us-incomes-falling-as-optimism-reaches-10-year-low_n_1022118.html.
What we need is for these vehicles to be produced at a price point that will allow that severly underpaid American worker to buy one. By the way, I worked for under $26,000 in the late 90's. Considering 52 40-hour weeks per year, that works out to be $12.50 per hour. I remind you that minimum wage is less than $8 an hour in most states. My best car at that time cost me $900 and was wiped out in a flood. I lived in a one-room, roach-infested slum in rural Lycoming County, PA that the health inspector refused to inspect. I am not saying that we need to lower the price to $900. That would be impossible. What I am saying is that if the cost of the vehicle were lowered to the point where I would be paying about $900 per year at that rate, I would have bought one. Let's make it more realistic. Most of the best-selling cars are priced below $20,000. You want electric cars to sell better, price them in the low $20k range. My Nissan Rogue cost me about $18,000 when I bought it new. If there had been an electric or hybrid for $4,000 or so more, I would have bought it. Instead, the closest in price was the Ford Escape Hybrid, at $35,900. Well, that is not strictly true. I could have bought a Prius for $32,000, but I needed cargo room. My question to GM is, and always will be, "You released a hybrid vehicle. It was the Cadillac Escalade Hybrid. You took the biggest, bulkiest, ugliest vehicle, slapped in a hybrid system and then complained because you did not sell them. Did you take the short bus to school?"
all good points. Next time you consider a new car, a Nissan Leaf (100% electric) as a base model can be had under $20k today.
I drove a 2011 Leaf and now a 2013 model and I can tell you the future is here. I go up to 100 miles at freeway speeds with it; it became my main mode of transportation. Rarely I need to go on longer trips and for that I have my other car. Charging is no issue, my company lets me use a plain 110V outlet, sufficient to charge all day. At home I use a a dryer outlet with a modified standard charging cable that came with the car.
So if anyone is serious about a 100% electric car, it can be had under $20k today.
Glad the Leaf is working out for you. Can't imagine one in my life-both of the family vehicles can be headed out of EV range on any given weekend (and pull a trailer with dirt bikes).
You have a very specific set of needs/circumstances that work with the EV restrictions. Most peole do not. I agree that the Leaf is a good buy for the right person-but I question how many there are. Just going on memory, but I think the Leaf sales have been flagging also.
I think you might have missed my point on market saturation. Is there more market for electric cars? Sure. But how much and at what price? What capabilities will it require of the product to tap the potential.
The Volt point is that a vehicle running virtually without competition (perhaps the Prius PHEV) and without the range/charge baggage of a pure EV (but 90% 0f the clean/green image) is apparently losing steam in the market. I think it is possible the $35-40K cool green car market is already getting saturated. This happens with boutique vehicles all the time (Thunderbird, Hummer, SSR ...). Hot today, not tomorrow.
I geuss my point is that the maret for EVs at the current state of the art may already be approaching market saturation.
EVs today take commitment, an second car, willingness to plan ahead etc. They are niche vehicles and will remain so until the range /charge issues are addressed. My opinion.
Taxis? What range do they need per shift? I suspect even 200 miles is far to short-especially in the stop and go nature of the job.
As EVs become more popular, the need for electrical infrastructure will increase greatly. I don't see plans in the works to build powerplants to handle the switch from gasoline to electricity. It appears that my future cars will be using far more electricity than my home. That calls for doubling the infrastructure.
Even if the electrical distribution network were capable of handling that future demand right this moment, the base problem of charging stations is still a huge problem. We're talking about replacing a system of gas stations and gasoline distribution that's had a century to mature, and replacing it in less than a decade to suit peoples' desire.
And I know of no standards being created to enable owners of any make of EV to use the same charging stations as everyone else. It takes many years to establish a world-wide standard, and then many more years after that to initiate an infrastructure.
It looks like this whole EV thing will collapse on itself if they don't get moving on long term collaborative planning.
There are a wide variety of choices of small cars priced under $20k. That matches up better with lower incomes, who need to reduce their commuting costs etc. $30k puts the car out of reach of as much as half the customer base. The price tag (in 2013 dollars) needs to be $20k or less for real adoption.
please consider and comment: The 100% electric Nissan Leaf 2013 base model "S" costs $21,300 after federal incentives. If you happen to life in California, you get a $2500 rebate check in the mail about 4 weeks after your purchase. That brings the car to a $18,800 price point.
Range: I would venture to guess 90% of all commutes in the US can be handled with a 100 mile range that I experience (about 75 miles per US standard). I also would guess that many lower income house holds manage to have 2 cars, one of which could be electric.
So the future is here for real adoption and we are seeing it unfold slowly.
Hi Peter--you make my point stronger, thanks. Tesla achieving $30k when the market already is around $20k. Would be like opening a chain to compete with Starbucks and charging $6 instead of $4.50. If the market for premium lattes is already at $4.50, why would anyone enter with an offering 1.5x that?
I think Tesla is doing a lot of good, pushing the technology, learning a lot about battery packs etc. So I think overall they are good for the market. But they need some serious market research if they think they are going after "affordability".
Agreed, eafpres. It's going to be tough for Tesla to get affordability and 200 miles of range, which is their stated goal. As you say, more research is needed. Yes, it's great that Tesla is pushing the technology. But let's not forget that it's going to take a big battery to get 200 miles of range, and big batteries are costly. Remember when one of the Tesla's Roadster customers fried his battery? The "friends an family" price quoted to him for a new one was $40,000. Even if that price comes down somewhat because of economies of scale, will it come down enough to allow the entire car to sell for $30,000? Tesla has a tough task ahead of it.
When I was working on electric vehicles some years ago, we and the industry determined that we needed at least a 200 mile per charge range to cover the various driving conditions, passenger/cargo load, etc. to be able to reliably cover 90% of commuting and included incidental travel such as shopping side-trips along the way. This assumed that your actual commuting distance was UNDER 100 miles. You also needed a 4-passenger minimum, plus cargo space to be useful for a majority of owners.
For a strictly electric vehicle, I feel Tesla has been following the correct business plan, first building the high-end/specialty roadsters to demonstrate the technology and work out any major bugs and techniques. Second, moving to a mass-production model, again at a relatively high-end, with a target market that could afford it, but this gives them the chance to build and tweak the needed large-scale manufacturing techniques, and develop the needed supplier base. With that in place, they can then afford to work on less-costly designs, and with a proven track record, work with suppliers to bring those costs down farther with larger volumes of production.
They're also hitting the critical infrastructure problem by setting up more and more charging stations around the Country with reasonably fast charge times. This lack of infrastructure was the real roadblock to mass acceptance of fully electric vehicles, and the reason a series/plug-in-hybrid design such as the Volt would be a better choice for the average driver. ( I did point out at the time that if GM was going to charge over $35k, they needed to put the technology in a Cadillac first... Looks like they figured that out... eventually. ;-) )
eafpres, you have a good point there. For $10,000, the price difference, you can buy a lot of gas. The cars you are talking about probably get about 30 MPG average. That equals about 75,000 miles at $4 per gallon. The cost of charging is not high, but it is not zero. For the flexibility you get from a gasoline powered car, I think that Musk is still a ways off from providing what is needed. In fact, in four years mileage of the gasoline powered cars will probably be a good bit better than 30.
Hmmm, actually my point is more that the utility limitations due to range and charging limitations will restrict the potential market for EVs-regardless of the price.
Example: I drive a beater Honda Odyssey ('95). Gets 22-24 mpg all around. Pulls my dirt bike fine (gasp! I don't need a pick-up or SUV.). It probably isn't worth a grand. It can be fuelled anywhere in 5 minutes. I don't even think about gas before 200+ miles.
Sorry, Dennis. I was actually replying to phantasy... but misread.
Eventually the supply of $1000 working cars will dry up. I agree with you in that for some the best option is to keep driving a working car, as even $20k will pay for a lot of gas and maintenace. I once figured out that for my 1998 4Runner, now with >300k miles, as long as fuel+maintenance is < about $500ish per month, I should keep driving it. ($20k over 5 years at 4.3% is almost $400/month, plus gas, insurance, etc. (insurance is higher on a new car)). It isn't going to get me the amount I value it on resale, and it works, and although it only gets about 20 mpg, the new investment doesn't make sense to me with the limited miles I drive.
So, I would frame the discussion around those who are actually in the market for a car, and hold my position that $30k isn't affordable but around $20k might be, so if you want to capture part of that market, get real on price. For those like you who are not in the market, it is irrelevant.
For those wanting to do more math and factor in lowered travel costs into the total cost equation of "afforability", the DoE has provided a great tool to compare what the equivalent cost of traveling using one gallon of gasoline vs. traveling the same distance in an EV:
That was interesting, thanks. What the calculator is missing is the cost of replacing batteries every x years and amortisation of the additional vehicle cost. They've also neglected to tell us how much more expensive egas will be when all of the extra infrastucture goes in and has to be paid for as well as the loss of night rates on electricity. These omissions make it very misleading. Not your fault of course, it is DoE's after all but it highlights how little thinking has been done for the future.
Nice try for the DOE but I don't think so. I would love to see how they get that number. average electric car is also 1/3rd of a gasoline car in weight in average. How many Silverado's, f150's and so on are all electric? Efficiency on the drive itself between an electric drive and gasoline is something in the order of 6 to 1. And yes this includes any battery losses and converter losses on the electric drive. What kills the efficiency of the electric drive is power density. a gasoline driven car can store a lot more energy for less weight. If you were to compare the two vehicles having the same range it will become apparent that gasoline wins. However if the consumer is intelligent about the use of their vehicle, has a back up vehicle, can live with the limited range then we can have an efficient all electric car that has that efficiency.
This afternoon we will fire up our Ford Expedition and drive to Table Rock Lake (235 miles) We will be there until Sunday when we will return home (235 miles), towing our boat. Then next week Friday we will go to the Gulf Coast of Mississippi (670 miles) towing our boat, where we will spend 8 days before returning (670 miles). While in Mississippi we intend to spend a day in New Orleans (130 miles round trip) and another day in Gulf Shores, Alabama (200 miles round trip). Oh yeah, I forgot to mention there will be 5 adults plus an infant in a car seat.
My question: which of these vehicles will accomodate all of this and how much of MY TAX DOLLAR will I have to fork over to subsidize the above? Talking about EVs; which are partly paid for with money from a broke government, who has to borrow money from China; and is powered by a coal fired generator in another part of the country and claiming that is the future is terrifying.
EVs are a niche vehicle that will no more rule the roads than the turbine engines from the 60s or the Wankle engines of the 70's. Industry has made such phenominal steps in producing more fuel efficient, safe vehicles that can only be derailed by attention to something as single purpose as an EV.
Lastly, how are you proposing to dispose of all those batteries when they have died and what are you using to replace the rare earth minerals (which are required to produce these boondoggles) and are controlled by our good friends in China?
Affordable? No matter the price, we can argue whether it's affordable or not - and we will! Arguing is just plain too much fun.
How often do we take those long trips? (as we speak - uh, type - I'm planning a 2500+ mile trip...) For me, and I suspect most, it's not frequent. My niece doesn't even own a car. (living in NYC, methinks a smart decision...) When she comes to Boston, she rents a Zipcar. Even expensive rentals several times a year may still be cost-effective.
Technology marches on - not that long ago notebooks were $2000 or more. My first computer was over $5000. Later I bought a *huge* hard drive - so big I'd never need to buy another. 330 *MEGs*. Almost $2000. Even later I ran out to buy several 1GB drives at $300 each - such a deal! My first VCR was $1600. Gasoline was 32 cents per gallon.
Battery technology will improve. EV control systems will improve. Gasoline and oil will be more expensive. Electricity generation will improve. Humans will adapt. Perhaps to buying a 95%-of-driving car and renting another. Perhaps to having an EV as the second car. Perhaps to car sharing. (in the US? doubtful...) But adapt in some way.
At some point, an EV will make sense to the average person. The government subsidies (helping while the technology is new and evolves) won't be needed - and will disappear. Just like farm subsidies (hmm...) and airport subsidies (hmmm.....)
Personally, I expect solar to eventually be efficient and (relatively) cheap. ('course I said the same about nuclear reactors 40 years ago...) I don't expect electric charging systems to pop up where gas stations now reside. I could perhaps see hydrogen stations. The typical driver running around with a tank full of hydrogen? Yeeks...
I just wonder what motorcycle I'll have in another 15 or 20 years...
Battery tech-I would be cautious about comparing it to the advances in computer tech. Batteries have been in the refinement process for approx. 2 centuries. Improvements tend to be incrementle rather than revolutionary. Not saying it can't happen but expecting More's law type improvements would be a poor bet.
Solar-Even if solar cells reach 100% efficiency they have a firm upper limit in output, They cannot produce more power than the watts of energy the sun provides per a given square area on average at their location. Even at 100% the ground area covered to be a significant source will be really large.
As is often the case, Dennis, I agree with your comments on batteries. Moore's Law is based on manufacturing advancement -- using machines to reduce the feature sizes on semiconductor devices. The battery challenge is one of pure science.
I have a pet category where I mentally file much of what I see in life. I call it "Asking the wrong question". Apparently standard procedure in politics. ;^) Not that I, of course, ever ask the wrong question. Chuckle.
Technological advancements in "electrical stuff" tend to look like magic (I know little about computer tech, looks like wizardry to me) so we expect all "electrical stuff" to be subject to magical rules.
It warms my heart to see engineering issues brought to light on electric cars. The current cars are full of issues that should be addressed prior to manufacturing. I like the critical question comment.
I would recommend putting a car beside a golf cart beside a bicycle beside skate board beside rollerk skates. Start with the roller skates and add only what is necessary to propel the operator to thier desired destination. If the end result looks more like the car than the skates start over with fresh eyes. Weight and size is tthe enemy.
Safety is also an unaddressed issue with electrics. In my opinion if an air bag like sensor goes off the battery cables should be severed by some means that would ensure no current to any other portion of the vehicle.
You raise some very good points, AREV. There's a big difference between the 12V electrical architecture of today's conventional vehicles and the 300V, 400V, or 500V architecture of some of today's hybrids and electric cars.
Two things that are missing from most EV discussions all to often (not saying price and range etc. aren't relevant) are charge time, and network capacity. Consider the following: The USA has a population of > 300million and I would say around 50-100million cars on the road every day. Lets use a conservative guess at 75million although again it's likely higher. The actual car population is of course higher, but they won't be all on the road every day. If we consider an EV as having a 90kWh battery pack to be a minimum for general adoption (the figure is likely higher) and the battery pack being drained on average to 1/2 on these cars then the grid has to supply 45kWhr ADDITIONAL per car per day which gives us over 3.3GWhrs needed on top of the ~11GWhrs currently produced and mostly delivered over a 10 hour period at night (usually off peak). Remember that I've used best case scenarios so likely they would need to produce half as much again. The other thing missing is that fast charging is going to be needed to make an EV viable. So this >3.3GWhrs (not including losses) would have to be provided not over 10 hours but in bursts, so worst case everybody comes home at the same time and plugs in at the same time and charges in 10 minutes that would require almost 20 times the peak. in actual fact probably only 5-10% overlap would occur due to everyones timing being different, but it still means we would all need a local storage battery of slightly higher capacity that we charge slowly all day to deliver the peak when we need it. Maybe every street has one, but it's still a duplication of batteries that someone has to pay for and will be factored in. Consider also that overnight won't be off peak any more as close to as much energy will be drawn then as during the day. This will also up electricty prices. All this and more leads me to believe that EV vehicles will have to remain a niche vehicle.
ETMAX, You are cretainly correct! You have repeated the same points that I have offered repeatedly, and whichg are almost universally ignored. Why is it so very hard for so many to understand that the "electric bush", where power just magically appears, is only good in cartoons? A simpler improvement can be had by providing cars with a manual "stop-Start" system that has a computer assist function available. And then they can add a 25% surtax on automotive air conditioning, except in California, where it should be at least 45%.
The other added costs of EFVs are maintenance labor and parts, since there will be no aftermarket part available, and nobody will know how to repair the controls, only how to replace those expensive modules. That is what we know for certain.
WK, Some additional good points. One thing though, I live in Australia and in summer we have days 105deg and more. Without A/C they've found that there are more accidents on hot days. For this and other reasons I have A/C. the differnce in fuel consumption at idle on a hot day is about 6% compared to about 7% when I turn on my headlights (actual measure figures). If you recalculate this to driving consumption at 100kph it's about 1.25% (computed). Admittedly I got additional window tinting to improve A/C efficiency but it tells me that the benefits of A/C in warmer climes outweigh the drawbacks. The A/C is actually driven exactly as needed only, most of the time it runs at only a few %. Also some older A/C's used to run the cooler flat chat and then adjust the temperature with the heater. It was a simpler thing to manufacture but very costly.
The bigger issue is idiots driving with the A/C on and the windows open, or having all of the lights on at home or the heater cranked up to 25C in winter with the doors open. Not EV issues of course but all part of the environmental challenge.
We could both write a book of what can easily be done to reduce environmental impact.
General Motors’ glitzy public unveiling of the Bolt concept car this week shows commitment to the future of electric vehicle technology, but it also heaps pressure on its engineers to meet a challenging set of technical goals.
Toyota Motor Corp. made its case for a hydrogen future this week, rolling out the hydrogen-powered Mirai and saying that it will grant royalty-free use of thousands of fuel cell patents to competitors.
A bold, gold, open-air coupe may not be the ticket to automotive nirvana for every consumer, but Lexus’ LF-C2 concept car certainly turned heads at the recent Los Angeles Auto Show. What’s more, it may provide a glimpse of the luxury automaker’s future.
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