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Elon Musk on the Flawed Premise of Tesla and the False Promise of Fuel Cells

Tesla's CEO takes some jabs at rival companies, technologies and business models.

Asa Mathat

Tesla’s Chief Executive Elon Musk didn’t break news during an appearance at the World Energy Innovation Forum on Wednesday, but the outspoken serial entrepreneur delivered a few jabs to rival companies, technologies and business models.

The luxury electric vehicle maker hosted the two-day summit, a gathering of investors, entrepreneurs and policymakers in clean energy, at its assembly plant in Fremont, Calif.

Musk sat down for a discussion with Ira Ehrenpreis, chairman of the forum and general partner with Technology Ventures, an early investor in the company. The interview kicked off with a look back at Musk’s original business venture — he sold a video game at the age of 12 — and soon moved into Tesla’s inauspicious early days.

Musk was characteristically blunt throughout the interview, even when he was his own target.

On Tesla’s early missteps:

In the case of the (Tesla) Roadster … we used a highly modified version of the Lotus Elise chassis.

… We ended up changing everything on the car, something like 7 percent of the parts were in common. Why did we do that?

It’s like if you have a particular house in mind and instead of buying that house, you buy some other house and chop down everything except one wall in the basement.

… That was dumb.

Tesla was created on two false premises. One was that we could easily adapt the Lotus Elise chassis … and two that the [drivetrain] technology we licensed from AC Propulsion would work in a production environment. Those were both totally false.

We ended up having to redesign the whole car and the whole power train.

On a recent conversation with Google CEO Larry Page (which amounted to a humblebrag about Model S battery life):

Most people just charge their Model S’s at home, because it’s got 260 miles of range or thereabouts.

I was having a conversation about this yesterday with Larry Page. He was saying all the chargers at Google are filled with [Nissan] LEAFs and [Chevy] Volts.

I thought, ‘Geez, what are we doing wrong? Do we need to do more to sell Model S’s at Google?’

He said ‘No, there are lots of Model S’s at Google — but nobody bothers charging them at work.’

On the overhyping of fuel cell cars, a theme he has hit upon several times (but which hasn’t stopped others from trying.)

[The] current technology of lithium-ion [batteries, which power Tesla cars] is superior to what the theoretical best possible outcome is for fuel cells. And lithium-ion systems are getting a lot better.

Game over. Why are you doing fuel cells?

On Tesla’s reception in China, where the Palo Alto, Calif., company just began selling cars:

I was actually amazed at how much goodwill there was.

… People really like Teslas there. In fact, it’s probably the most positive reception I’ve gotten anywhere and the sales are doing really well.

… The only sort of negative comment in China is there were some customers really angry that they weren’t getting the cars fast enough. So I had to meet with them and apologize for not getting them their cars sooner.

But mostly it’s because they lived outside major cities and we don’t want to deliver cars until we’ve got service centers and Superchargers in the area.

On the traditional auto dealer system versus Tesla’s direct sales model (which the company is fighting to preserve through a series of state-by-state battles):

Why would you want to replicate the dealer experience? That just seems like a bad thing.

… Really the main reasons for not going with the traditional dealer network is I don’t know anyone who’s had a good experience going to car dealers. I didn’t have a good experience. I had a terrible experience. It always seemed like they were trying to rip me off — and they did rip me off.

Why would we do that to our customers?

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