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$10 Per Gallon Gasoline?

By: Brian Faughnan (Diary)  |  June 16th, 2009 at 10:14 AM  | 

RESIZE: AAA

That’s what Elon Musk wants, in order to make his all-electric Tesla roadster more competitive in the new car market:

Tesla CEO Elon Musk is speaking right now at Wired Live. What’s he saying? For starters, he wants to buy a car factory from a Detroit automaker so he can produce 100,000 cars per year. More craziness below.

So it’s nice that Musk has such lofty goals. Frankly, it’s always been his forte. He leaves the “how to get there” to other, more little people. Like with an idea to build 100,000 cars per year by buying an idled assembly plant from a U.S. automaker. He’ll leave the whole “design a mid-size sedan for it to build” to other people. Musk’s an “idea man,” ya know. And for an “idea man” the reality of building 100,000 mid-size sedans is kind of like trying to build a “kabillion” mid-size sedans — they’re both impossible numbers when you don’t even have a working design.

He also thinks gas should cost $10 a gallon. Hmm, we wonder why. Keep in mind it’s not that we disagree with Musk, we just happen to believe it’s also probably the price-point in which a $100,000 Tesla roadster becomes a good investment versus a sports car with similar performance.

Musk is a smart businessman. He recognizes that to increase the chances that his product succeeds and the traditional auto fails, he needs gas expensive enough to make old-style cars unattractive. People can’t buy cars that get 15-30 miles per gallon when the gas costs $10 per gallon. They can only do that when gas is in the $2-$5 range. (We saw last summer that it gets dicey around $4 or more, but people adapt.)

What’s true for Musk is no less true for Government Motors. Barack Obama wants to retire the style of car most Americans own today. He envisions cars that get more than 35 miles to the gallon; that means smaller cars, with smaller engines. In order for Americans to choose to buy those, they’ll have to be swayed either by really low auto prices (funded by long-term subsidies for the car companies) or by really expensive gasoline.

Which do you think he’ll choose?

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  • Skanderbeg

    Well, for what it’s worth, according to Motor Trend the *base* MSRP for a 2009 Tesla Roadster is $128,500.

    http://www.motortrend.com/cars/2009/tesla/roadster/sport_roadster/3122/pricing/index.html

    The obvious notion is that a few elitists while zip around in their fancy electric roadsters on now-empty freeways – while the rest of us are supposed to ride the bus….

    • bs
    • Common_Cents

      The new Tesla S scheduled to retail for a much more affordable 50k. It’s a nice looking car and lets face it. Not a bad price for small production numbers and little economies of scale.

      One thing yet to be answered. What are the e-car people going to say when they realize all the clean electricity is made from dirty coal that makes you sick! All meanwhile nuclear power plants are opposed. A solar/wind play?

      • Skanderbeg

        Actually, a good rule of thumb is – no price is to be respected unless and until the product is actually AVAILABLE at that price. It’s become a real disease to make promises (in terms of price, features, etc.) that just aren’t feasible – and then expect everyone to forget about it if/when some cr*ppy shadow of the “vision thing” actually appears for purchase.

        Well, the thing about “electric cars” that everyone has forgotten is that the real intent was not originally related to anything at all to do with “green energy” or what-not. The main reason is the same one relating to why you see electric-powered forklifts in warehouses – concentration of emissions. The idea behind the “electric car” is that in dense urban areas, you get rid of emissions. The electricity can be generated somewhere else where you don’t face that.

        The greenies have never been good at sorting things like this out in their own quasi-minds….