| FREMONT, Calif, June 22
FREMONT, Calif, June 22 Tesla Motors Inc
Chief Executive Elon Musk, an entrepreneur known for
his outsized ambition, on Friday made a stunning forecast:
battery-powered cars will likely match the internal combustion
engine in popularity by the middle of the next decade.
"In 20 years more than half of new cars manufactured will be
fully electric," Musk said. "I feel actually quite safe in that
bet. That's a bet I will put money on."
Musk, who divides his time between Tesla and his space
exploration startup SpaceX, said it might even happen sooner
"It's probably going to be in the 12- to 15-year time
frame," he said, speaking at an event at Tesla's manufacturing
plant in Fremont, where he handed over the keys to the first
buyers of the new Model S sedan.
Electric vehicles have struggled to find an audience beyond
Hollywood celebrities, Silicon Valley venture capitalists and
policymakers in Washington, primarily due to their premium
pricing and anxieties about their driving range.
Most analysts see pure electric cars accounting for only a
single-digit percentage of total sales over the next decade, in
part because of the cost of batteries and the uncertainty around
continued government subsidies for the new technology.
Rival automaker Nissan Motor Co, the most bullish
mass-market car maker, forecasts that by 2020 10 percent of all
cars sold will be electric. In an interview with Reuters on
Friday in Tokyo, Nissan CEO Carlos Ghosn said he believed that
forecast was attainable if enough automakers followed Nissan
into offering EVs.
Musk, the inspiration for Robert Downey Jr's Tony Stark
character in "Iron Man," has overcome odds and a turbulent time
at the carmaker, marked by a near-debilitating financial crisis,
to now deliver the second car in its portfolio. The company also
sells the Roadster sports car.
In addition to Tesla, Musk founded SpaceX, which last month
sent the first privately developed ship into space to dock with
the International Space Station, and online payments site
PayPal, now part of eBay.
Despite the slow adoption of electric vehicles, many
automakers are planning to launch them to meet rising fuel
Apart from General Motors' Volt and Nissan's
all-electric Leaf, Toyota has begun selling a plug-in Prius, and
EVs from Ford, Honda, BMW and Fiat will join the fray this year,
along with cars from start-up Coda Automotive.
INVESTOR GETS CAR NO.1
Tesla, which has said it has adopted a slow, methodical
approach to the launch, expects to deliver 5,000 Model S sedans
by the end of 2012. Reservations for the sedan have topped
The company expects to deliver over 20,000 vehicles next
year, Musk said.
The owner of the first Model S to roll off the assembly is
Steve Jurvetson, managing director of venture capital firm
Draper Fisher Jurvetson, an early investor in Tesla. Musk gets
the second Model S.
Tim Draper, founder and managing director of Draper Fisher
Jurvetson, received his keys on Friday after having waited
nearly three years for the car.
"It's the smoothest car I have ever driven," Draper said,
who also likes its large touch navigation screen.
The Model S is the electric carmaker's most crucial launch
yet as it represents the company's transition to the mass
Tesla has described 2012 as a "year with two halves" with
the Model S launch as the dividing line. Ninety percent of the
company's revenue this year is expected to come from the sedan.
Tesla also draws revenue from its partnerships with Toyota
Motor Co's and Daimler AG. In February,
Tesla announced an expanded deal with Daimler to create an
electric powertrain for a new Mercedes Benz EV.
Musk said that while he was positive about Tesla's
powertrain business, he added "10 CEOs determine whether we have
a powertrain business or not."
Tesla was talking to a major carmaker about a "high volume"
powertrain deal, Musk said, but did not give any details.
Tesla also makes the powertrain system for the electric
Toyota RAV4. Toyota, which unveiled the model last month, said
it projects to sell 2,600 of the sport-utility vehicle over the
next three years in the United States.
The Model S base model will be priced at about $57,000,
before a $7,500 U.S. federal tax credit, for a car that can
travel 160 miles (258 kilometers) on a full charge.
More popular will be the Model S version that will be able
to travel 230 miles (370 km) on a full charge. That version will
cost $10,000 more. A version of the Model S that will have a
range of 300 miles (483 km) will cost another $10,000.