Elon Musk: Gas should cost $10 per gallon
NEW YORK--"I'm anti-tax, but I'm pro-carbon tax," Tesla Motors founder Elon Musk said onstage at the Wired Business Conference here Monday--a remark that prompted interviewer and Wired editor-in-chief Chris Anderson to quip that he was a "true Silicon Valley libertarian."
Tesla Motors Chairman and CEO Elon Musk
(Credit: Tesla Motors)Gasoline "should probably be $10" per gallon, said onetime PayPal co-founder Musk, who is also attempting to make sending satellites into space cheaper with a start-up called SpaceX. "I'm not paying for the true cost of gasoline at the pump...since nobody's explicitly paying for the CO2 capacity of the oceans and atmospheres, it's getting consumed. We will pay for it down the road, but we are sort of ignoring it for now."
Musk's company has put out the Tesla Roadster, a pricey sports car that runs exclusively on electric power. On the way is the Model S, a more affordable sedan. Separate from the technology, Tesla has gained a reputation for financial difficulties and corporate bickering. Earlier this month, former CEO Martin Eberhard sued Musk and the company for libel and breach of contract.
Musk's rash attitude and devotion to cutting-edge innovation has constructed him as a figure less than willing to compromise. He didn't sound too satisfied, for example, with the level of innovation in the Toyota Prius, the car that is practically synonymous with environmental consciousness in the auto industry.
"A Prius is not a true hybrid, really," he said. (A plug-in Prius is on the way.) "The current Prius is like, 2 percent electric. It's a gasoline car with slightly better mileage."
That said, Tesla shines quite a bit brighter due to the utter disarray of the U.S. auto industry, with major automakers falling into bankruptcy and Detroit in a continuing downward spiral. This, according to Musk, was the inevitable result of a completely broken system.
"Great companies are built on great products," he said, and when those products take a turn for the worse, so does the company. Automakers, Musk theorized, focused too much on the money rather than innovation. "The path to the CEO's office should not be through the CFO's office, and it should not be through the marketing department. It needs to be through engineering and design."
Musk said that unions weren't inherently the problem but the way that they were structured was. "It's not out of the question to have unions. But if they do have a union, they've got to understand that they're on the same side of the company," Musk said. "I really am kind of against having a two-class system where you've got the workers and the management sort of like the nobles and peasants." In other words, Musk thinks Detroit could use a dose of Silicon Valley corporate culture.
Surprisingly, Musk implied that Detroit will survive. "I think it'll probably be a healthier place. This has been somewhat cathartic. Maybe, I think, maybe I'm being overly optimistic, but I think this will be a cathartic experience," Musk said. "I think GM and Ford, maybe not Chrysler, but GM and Ford will come out of this healthier...and more competitive."
He wants Tesla to be part of that, obviously.
"I'd like to take up some of the manufacturing plants," he said. "When the mess gets sorted out I'd like to have a conversation with whoever's in charge."
Caroline McCarthy, a CNET News staff writer, is a downtown Manhattanite happily addicted to social-media tools and restaurant blogs. Her pre-CNET resume includes interning at an IT security firm and brewing cappuccinos. E-mail Caroline. 
he talks about the carbon cost of gas, but what about the carbon cost of generating the electricity to power his over prices heap? funny how there is no mention of that anywhere.
Your comment would be insightful, were it not for the fact that the United States gets the vast majority of its oil from Canada, Venezuela, and internally.
http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/company_level_imports/current/import.html
Iraq is on the list, but not in the top 3.
Unfortunately even a small change in the quantity supplied can have a huge impact of supply as even a rudimentary economics course will teach you. This is due to the inelasticity in the oil market. Thus, although the bulk of our oil may be bought from countries in our own hemisphere, we desperately need the oil from the Middle East to fully meet our demand and keep prices somewhat stable. Furthermore, in a global marketplace we have to ensure every country has a safe supply of oil since as soon as say, Saudi, production drops, world prices move up, other countries bid for Canadian and other countries gas pushing everyone's prices up. Without a somewhat stable Middle East, it is impossible to ensure low oil prices anywhere in the world.
The difference is, the tax is so high, as to be able to force consumers into changing habits to move away from oil as a primary source of energy.
And it wouldn't just benefit Tesla, but it would also benefit all car companies whose plans for an electric or hybrid future would be bolstered by a market and mass production.
The market price also ignores the disposal costs of products - witness the problem of getting rid of the old TV sets, or tires or batteries or the mountains of landfill. Clean up costs, disposal costs, permanent loss of resources just don't get a market price.
I know you will understand that something has to change. Now I'm not sure that Mr Musk is 100% right, but I do invite you to see that he is trying to factor in some of those external costs that the market is not yet acknowledging.
Let business do it all on their own and we'll get a product that actually works and will sell.
Subsidizing only leads to higher pricing on everything else long term.
The money has to come from somewhere...
$10/gal gasoline would require that the entire economy "reset" as the cost of energy can only be a certain maximum percentage of the economy. As you pointed out as the cost of gas increases so does the cost of everything else until an equilibrium is reached - and it doesn't matter whether the increased cost of gasoline is due to crude, refining, or taxes.
Gas at $10/gallon won't stop people who make less than $15/hr from going to work; it would change HOW they get to work and WHERE they choose to live. We know this, because last Summer, at $4/gallon people started using public transportation, riding bikes and carpooling a lot more. We also know that many companies would also allow workers to work from home.
The group that would suffer the most, initially, from high gasoline prices, are tourism-based industries and small cities dependent upon tourism. Eventually, as the economy moved over to a hybrid/electric/alternative system, or as the prices were absorbed into the economy, tourism will come back. Effectively, you can end up with close to a zero-sum game if you put that extra tax money back into these tourism-based industries and small cities, via high-speed public transportation systems connecting them to the metropolis.
Yes, in our larger cities and areas with good public transportation systems moving closer to ones job and using public transportation is possible, but for a very large percentage of the country it could take 10 years or more for the built environment to make the adjustment. As an architect/city planner I have railed against our idiotic land use policies and zoning ordinances. But now its built and we have to make it work while we make the necessary adjustments. An example is the new auto assembly factories that have been built (mainly in the South). The Mercedes Benz factory is in the middle of nowhere in Alabama and I'm sure their employees are scattered over at least 360 square miles.
I believe in the change just not in how many say we should get there.
Think that profits will go down to cover that? $10/gallon would be conservative.
All the local drilling we do will not make up for the oil we import. At some point we need to get off oil because it's going to run out, plain and simple.
Currently there is more oil in the shale of the US than Saudi Arabia has in TOTAL reserves - A LOT more, 5 times more to be exact. Currently the oil can be extracted for about $30 a barrel so, yeah, we have the solution right here. Use the shale as a stop gap while we develop the technology to allow for cheaper vehicles that run on electricity (and build more nuclear plants for crying out loud... we're getting embarrassed by the French in this dept...)
http://dailyreckoning.com/oil-shale-reserves/
"Estimated U.S. oil shale reserves total an astonishing 1.5 trillion barrels of oil - or more than five times the
stated reserves of Saudi Arabia."
LOL. ;-)
Yes, it's a self serving statement by Tesla. They have to do what they can to stay in the news, even if it is with such silliness. It's free publicity.
For take into consideration municipalities all raising the price of mass transit during this economy. Its actually costing me more to take the train to work than to drive. I however take the train for sanity sake. But there are people who can't take mass transit to work. They don't have a choice. When they have to travel 50 miles to work there isn't a whole lot of choices other than find work closer to home. People will care for themselves first before they will care about the environment and think of the big picture. Thats a no brainer.
All those disabled people who can't use anything else, tell them how happy you are.
Next time you need a fire putting out, tell the firemen how happy you are that their budget's being squeezed ever more because those big ol' fire engines aren't running on fairy dust and the laughter of children.
If there's one thing I'm sick of it's this preachy damn (UK) government acting like we're all bad people for using cars when the bus subsidies were killed years ago and then they went and killed the subsidies on train services last year (like they didn't suck enough as it is). In most parts of this country (especially outside the cities) no car = no job and I doubt it's very different in the USA.
So between the government berating people for doing the only thing they can in a situation the government created and ignorant supercilious pillocks like you, it's no wonder people are sick of environmentalism.
Even the Green Party (over here) make public transport a major point of their campaign because they're not thick and they understand that there has to be a viable alternative.
Fuel cell isn't going to happen ever and if it does will never be widely adopted. And, then we have Telsa. Do they produce affordable cars for the masses. Does Mr. Motor Mouth's company produce cars for the masses? No Mr. Motor Mouth's business makes expensive little sports car for .5% of the population, basically those that are still rich in this economy and have more money than brains.
When we have an electric car that can carry and family of 4 and a dog and some cargo (we do have to go grocery shopping you know), it doesn't cost any more than a gas car of the same size, it can go the same distance on a full charge that a gas car on a full tank of gas, you can get it recharged at any station for half the cost of filling a gas car and it only takes 5 or 10 minutes to fully recharge then we can talk.
Until then Mr. Motor Mouth of Tesla needs to keep his trap shut!
Robert
Musk is not Tesla's founder he is the current CEO the founder is Martin Eberhard.
D~W
They *should* do this regardless of the price of gas; sadly, they don't. When gas was over $4/gallon we finally started seeing people take on the sorts of behaviors that they ought to be doing even the gas was $0.25/gallon.
If you believe that we need to reduce our dependency on foreign oil and reduce CO2 emissions, and you agree that the only time we observe people doing what they *should* do is when the price of gasoline is very high, then it makes sense that we should make the price of gas very high. That's a very unpleasant conclusion considering people can scarcely afford to put food on the table and the last thing they need is more taxes, but one way or another we have to solve this problem.
Really? And what was that? Because I didn't see any change at all, just a lot of people complaining.
And say our consumption does go down.. demand goes down, and price goes down. Are people still going to buy that 30k hybrid, or will they switch back to a $12k gas car now that gas is back to $1.89 a gallon?
This is exactly what happened years ago when a lot of the original cars ran on what we'd call "green" bio fuels. Along came cheap oil and everyone went to gasoline cars. The only way to stop the cycle is to produce cheap cars that run on cheap electricity. That won't happen for another 5-10 years.
http://www.cbsnews.com/blogs/2009/06/08/business/econwatch/entry5071280.shtml
Probably not what the original poster had in mind though.
- by C0mmanderB0nd June 15, 2009 11:01 AM PDT
- Mr Musk also fails to take into account the "environmental costs" with all the chemicals in the numerous tiny little batteries that power his high priced all electric car. Not to mention isn't there still carbon/pollution from the electricity charging the car????
- Reply to this comment
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Showing 1 of 3 pages (92 Comments)And isn't Tesla motors also a company that is poorly run/out of money and needed a government hand out??????
The real truth is this D Bag wants $10 a gallon gas because that is the only way enough people would buy into his overpriced all electric business model.