Tesla Exists Because Detroit Wouldn’t Build Good EVs

To an audience full of auto-industry executives in Detroit, Tesla Motors co-founder and CEO Elon Musk: Tesla is growing and will turn a profit, building cars Detroit refused to produce even in light of clear EV demand.

Elon MuskTo an audience full of auto-industry executives in Detroit, Tesla Motors co-founder and CEO Elon Musk made a few bold statements on Tuesday: Tesla is growing, will turn a profit eventually, and was doing so in large part because the rest of the industry didn’t want to build electric cars — at least ones that people would buy.

In a rare question and answer session at the Automotive News World Congress, Musk said he envisioned Tesla building “a few million vehicles” per year by 2025 — compared to less than 100,000 today. He said Tesla was only unprofitable because it was ramping up production for one new model, designing another and building a $5 billion battery factory, with regular profits expected by the time it launched a new small vehicle in 2020.

Musk added that Tesla was already sold out of the forthcoming Model X SUV through 2015, even though production had been delayed while the company perfected its “falcon wing” doors.

And as is his wont, Musk was both encouraging and a bit needling toward the industry establishment — urging a far wider production of electric vehicles while saying Tesla had profited only because regular automakers chose not to build good electric cars first.

“I really, strongly recommend making significant investments in electric cars,” Musk said, noting that Tesla had offered to share its patents for free and allow other automakers to use its Supercharger network. “I think people won’t regret making those decisions.”

Tesla was founded in part, he said, because it was “very important for there to be an example of an electric car that was great. There were no great electric cars.”


Ahead of its closely watched earnings report, Musk wouldn’t give sales figures, but did say that while demand in North American and Europe had grown, sales in China fell last quarter due to what he said were “misperceptions” about the ability of Chinese owners to recharge their vehicles. That was enough to send Tesla shares down some 7 percent in aftermarket trading.

Musk said Tesla could settle for building 100,000 cars a year and survive as a niche automaker, but that his goal had been to electrify transportation: “If we just scaled back our growth and moderate our pace, we would be profitable by any measure and decently so.”

The reveal of the Chevrolet Bolt, a 200-mile electric vehicle that General Motors will put on sale in a couple of years for $30,000, had raised questions of how that would compete with Tesla’s own upcoming Model 3 — but Musk said that didn’t concern him.

“I don’t see it as a competitive threat becaues all cars will go electric,” Musk said, adding praise for GM for moving further into the field. “What does it matter if someone makes a few thousand more.”

When asked if the Bolt or other recent electrics and plug-ins had lessons that Tesla could learn from, Musk paused a few seconds and said: “No.”

As for his long-running fight with traditional dealers who have blocked Tesla from selling directly to customers in several states, Musk pointed to a compromise in New York that allowed the company to open a couple of stores, and said Tesla wasn’t interested yet in trying to work with franchises — especially “those that have been jerks.”