Comments on: Elon Musk: Gas should cost $10 per gallon

The Tesla Motors founder sounded off at the Wired Business Conference as to why he thinks the Prius isn't good enough, why auto CEOs shouldn't be finance guys, and that he wants to get a bigger toehold in Detroit.

[thatpcguy]

And electric cars should cost $10. Yes, I know that facetious but when somebody makes a green car that I don't have to take a second mortgage out to purchase and is actually practical I will jump on the green bandwagon.

[fgsdfgdsfgdsfg]

so in other words he wants gas to cost 10.00 a gallon so he can sell more of his overpriced electric cars?
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.

[Renegade Knight]

True. If it's 10.00 a gallon for gas it should be followed up by an equivilent cost for the CO2 of "filling up" your electric car. Those who lived with nuclear, hydro, or wind would get a break. Those stick using coal and natural gas. Not so much.

[hutwarmer]

like he said, the path to the CEO should be through the MARKETING department. It is noce to see that there are people out there who see through the rhetoric of these idiots.

[dissent3125]

The carbon produced to get a car 20 miles by electricity is much lower than the carbon produced by burning gas due to the large scale nature of our power plants. While there would still be significant carbon emissions, electric cars are clearly a step in the right direction Furthermore, the grid can be shifted to provide cleaner and cleaner sources of electricity while once a Prius is built it will effectively get the same CO2 output per mile for its entire lifetime. Also, his $10.00 a gallon statement isn't as absurd as he quotes it to be when you consider all of the costs associated with ensuring the United States is supplied with millions of barrels a day. If you add the cost of military placements designed to secure fuel sources, the subsidies given to oil companies, and the impact that CO2 is having, you will get a phenomenally high cost.

[darkstar32170]

He said that the path to the CEO position should NOT be through the marketing department (or the CFO position). It isn't well written but his meaning is clear and correct. The engineers and design people should run the company - ie "CAR PEOPLE." The rest should serve in advisory departments.

[martin1212]

@dissent3125, you are quite right. Americans are already paying around $9/gallon when you factor in the price for military cost of securing energy in the gulf (and that price does not include any of the current expenditure in Iraq.) It seems people are willing to pay high prices for gas as long as it is hidden from them - the ultimate subsidy. If the costs were passed on to the consumer via gas taxes the consumption would probably drop to the point that it might be possible to reduce that military expenditure and end up in a much better place.

[El_Segfaulto]

@Martin

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.

[dissent3125]

@El_ Segfaulto
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.

[martin1212]

@El_Segfaulto, you are missing the point. The US spends that money to protect oil supplies today. It doesn't actually matter what percentage of that oil reaches the US, the fact is that the money is being spent by the US to protect that oil, so it is entirely reasonable to factor it in to the real cost you are paying for oil. If there was no need for oil in the US that money would not be spent. And as dissent3125 says, the Middle East is the critical component in price - the only countries with significant spare capacity are in the gulf, so they are the ones that control the price of oil.

[sanenazok]

What a bunch of self-serving BS. The price of gas and his car is set by the market. Everyone else should be subsidizing the electric car model, which at the present is not feasible, by overpaying for gas. Thanks very much.

[freemarket--2008]

As mentioned above, we are already subsidizing the gas guzzlers with higher taxes and loss of life in the military. A high price indeed.

[gerrrg]

The price of gas would still be set by the market under Musk's terms. All he's talking about, is increasing the gas tax, which as you already know, we have both federal AND state gas taxes added on.

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.

[gmhendo]

Sanenzok - I understand your point, but the trouble is the market price does not reflect the true cost of the product. It does not take into account the true environmental costs, or the social and military costs. Nor does it consider, when we are using non-renewable supplies, the fact that we are depleting resources that our children should be inheriting.

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.

[viss9434]

I agree with Elon Musk. The US should begin a policy of increasing taxation for gasoline. Revenue from this should be used for subsidizing a sustainable energy policy.

[jmartinbsu]

Yeah, of course $10 gasoline also brings about $50 corn flakes, $20/lbs tomatoes and $100 milk....Taxation only raises prices across the board.

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...

[darkstar32170]

jmartinbsu you are correct. Also at $10.00/gal people making less than $15.00/hr stop going to work. It costs more to get there than you make. I seem to remember that the number for house foreclosures skyrocketed when the price of gas went above $4.00/gal. People had to choose between getting to work and paying the mortgage (not that that was the only factor - just the straw that broke the camel's back).

$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.

[ckh1272]

You know there was reason for the revolutionary war, right?? NO society, country, empire, or otherwise has ever survived much less prospered by taxing at every opportunity. In the end, we really should not forget history (you know how the rest goes).

[gerrrg]

@darkstar32170.5

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.

[darkstar32170]

gerrg, you greatly overestimate the ability of the people to change jobs and move to locations that accommodate short (walk or bike) or public transportation commutes. The problem is most acute for people with lower incomes. Public transportation utilization did increase a great deal last summer but in numbers I saw up to 10% of low income segment of the population had significant trouble affording the commute to work and absenteeism rose.

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.

[warpsix]

Paypal that's where i know that name, no wonder he wants $10 a gallon. Now i know i will not buy his cars, ****** service is normal at Paypal.

[gefitz]

Lots of economists estimate that oil delivery infrastructure in the US has decayed (after deregulation in the 80's allowed transport companies to ignore it) to such an extent that $tens of trillions (with a "t") would be required to repair it over the next 25 years or so.

Think that profits will go down to cover that? $10/gallon would be conservative.

[delltechkid]

I think gas should cost more per gallon just to drive down demand. We import so much oil from countries that want to kill us, financing the folks who want to see America gone.

[krizhek]

Or we can just allow more local drilling and allow the people to chose the vehicle they want and not getting the government to force us into a vehicle, which they say will solve a problem alot of people don't beleave is occuring.

[wangbang]

"Or we can just allow more local drilling..."

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.

[martin1212]

@krizhek, the sheer scales involved mean that local drilling will make little difference. The US imports far more oil than even Saudi Arabia produces in total. US production is half of it's peak level and falling. There is no way local drilling is going to change that situation significantly. Non-OPEC oil production is in decline now, so the future will be more and more controlled by OPEC. Any extra oil produced in the US will be counterbalanced by OPEC cuts to maintain pricing. At some point you have to face unpleasant facts and realize that higher prices and more efficient vehicles are the best way to break the dependency.

[bigmc6000]

Two words my friends - Oil Shale...

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."

[jeduardocafe]

Wow! This guy comes off as a complete and utter jerk. Hmmm, let's **** off all non-engineers and all of the lead users that are actually buying cutting edge products (Prius, in this case). The world does not need another brash jackass CEO. Unbelievable.

[rrod182]

I believe the correct term is, what a ******. I agree with everyone else, the big oil companies are getting their cash either way. Somethings gotta burn to keep the lights on. I vote we start burning this guys cash, he seems to have too much.

[rrod182]

I got bleeped. What I said was what a d0ucheb@g.

[The_happy_switcher]

And I want a gold-plated toilet but it's just not in the cards.

[Dalkorian]

Gold *plated*? What a cheap SOB you are, I want mine to be solid 24K gold. Pimp my toilet!
LOL. ;-)

[Vegaman_Dan]

Perhaps Mr. Musk is willing to just add another $10K or so to the price of his $100,000 vehicles to help offset it then?

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.

[jusben1369]

I just find it annoying when someone says "I'm against taxes........except in the case of my pet project/belief" It's this kind of dysfunctional approach to taxing and spending that help put CA where it is right now. Be one or the other.

[CreativeMalcolm]

As someone who rides the bus, I'm entirely happy seeing other people get taxed like crazy for gas. Most people can't even drive without becoming total jerks so I say let's have fewer people clogging up the roads.

[bsmithtwz]

I used to ride the bus too but the schedule just didn't work out with mine. That's why I got a scooter. Lovin' the 75+ MPG. Still lots of stupid people on the roads but now it's more fun to get around town. Filling up for a few bucks ain't bad either. Can't wait for a good electric scooter that can sustain 70+ MPH. Yea, I know, 2-wheelers are not practical for everyone, especially families. I got the scooter to supplement my car and use it as much as possible. It's great for most errands and I see tons of cars with only one person in them. Using a bicycle can be even better plus you get some exercise whlie you're at it.

[renGek]

I ride mass transit pretty much daily and I hate people who are all smug about "yay mass transit, lets tax drivers to death". They are so narrow minded to think that taxing drivers doesn't affect them one bit. Do they think grocery bills going up has nothing to do with gas prices. Do they think prices going up on most things in general has nothing to do with gas? Idiots.

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.

[odubtaig]

Sooo, next time you need a plumber, electrician or any other small business I hope you're entirely happy that they're charging you more because their costs have gone up.

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.

[willdryden]

I found that an ebike is cheaper than mass transit. Then they raised the mass transit rates.

[hassan_bin_sober]

I'm still waiting for my Mr. Fusion I bought on eBay.

[Vegaman_Dan]

Ship date is 2015. ;)

[Heebee Jeebies]

Hay I am all for saving the planet from our destructive selves. But, before this Tesla twit opens his mouth he needs to make sure that there are viable and I mean viable alternatives to gas powered cars. There aren't. Hybrids are just a joke. Electric cars... wells lets see there are few of them that a family could use. The ones that are there take hours and hours to charge, there are few charging stations and oh lets not forget they get about 40 miles per charge. So you need to drive 80 miles in to the city, you get half way and then have to spend 8 to 10 hours charging just to get the rest of the way. And, lets not forget the trip back. So a drive that should take half a day at more ends up taking two or three days. Yep, that is viable.

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

[willdryden]

Plug-in hybrids will fit your profile. The electric range costs 10% of the cost for gas and the gas engine will take over after the all electric range is exceeded. As for the cost, all new technology costs more that obsolete technology.

[Draq Wraith]

you can forget having food delivered to your door if gas reaches 10 per gallon with out a mandatory fee per mile there and back.

Musk is not Tesla's founder he is the current CEO the founder is Martin Eberhard.
D~W

[jrms]

This is probably not true. Before the financial crisis started gas was above $9/gallon in Sweden. We still had free pizza delivery, no problem.

[hassan_bin_sober]

Elon Musk? ...Isn't that kinda like British Sterling, or English Leather? Female repellent.

[thisnamestoolong]

Mr. Musk fails to take into account the middle class and lower middle class in this comment... the people who would not be able to afford either an electric car or $10/gallon gas. This sort of thing would result in class warfare on an epic scale as home foreclosures would go through the roof and there would be mass unemployment. Not to mention the fact that the trucks that ship everything would still be running on oil (I have not seen an electric 18 wheeler yet), driving up costs of EVERYTHING to the point where anybody making under $150,000/year would quite literally be starving. I agree that oil is terrible, but we need to have a solid alternative first, electric cars are quite simply not ready for prime time yet.

[tcampb01]

I think $10/gallon is ridiculous but he makes a valid point. People should be doing what they can to reduce CO2 emissions. Drive more conservatively, combine trips, share rides, take mass-transit when possible, etc.

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.

[celticbrewer]

"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. "

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.

[Dalkorian]

Actually, as gas surpassed $4/gal last year I saw a spike in reports about people torching their own cars for the insurance money.

http://www.cbsnews.com/blogs/2009/06/08/business/econwatch/entry5071280.shtml

Probably not what the original poster had in mind though.

[C0mmanderB0nd]

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????

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.