Zakaria: Goodbye Gas Pump? A Solar-Powered Auto

The electric car has been pronounced dead many times, but Elon Musk is out to resurrect it. The South African-born Musk left home at age 17 for North America and made a fortune when PayPal, a company he cofounded, was sold to eBay in 2002. One of his new companies—he's chairman of three start-ups—is Tesla Motors, a San Carlos, Calif.-based electric-car manufacturer. Its first model, the Tesla Roadster, is a sleek, high-end sports car with an eyepopping price tag. It'll start rolling onto streets this summer. NEWSWEEK's Fareed Zakaria spoke to Musk about the future of transportation in an oil-constrained world. Excerpts:

Zakaria: What's your goal in producing the Tesla Roadster?
This car itself is not going to change the world—it's a $100,000 sports car being produced in quantities of about 1,800 a year. Where it really becomes meaningful is when we produce the next models, which will be lower-cost and higher-volume. Our second product is a sedan that is about half the price and will be produced in late 2010 in 20,000 units a year.

And your third model will be even cheaper.
Yes. As a rough rule of thumb, when you increase the production quantity by a factor of 10, you can reduce the price by a factor of two. In the early 20th century, cars were initially something for wealthy people. It took quite some time for the cost to be optimized and become accessible to a broader population. It's the same thing here—we'll see the traditional technology learning curve. We're trying to push it as fast as we possibly can, and we think we could either directly or in partnership with a major auto company actually get to a car that is under $30,000 in four years.

Your car runs exclusively on electricity, but GM and Toyota are working on so-called plug-in hybrids, which also feature a gas tank to extend the range. Why didn't you do the same?
We spent a lot of time last year looking at plug-in hybrids and ultimately concluded that it would not be a very good car. You're forced to compromise. Because you need both a gasoline-powered engine and a big battery, neither can be very good, and the engine will be a weak engine. It's just not where the future lies. We'll be able to offer a car with a 305-mile range roughly three years from now.

Most people travel less than 50 miles a day.
And 99 percent of travel is under 200 miles [a day]. There is the occasional road trip, but that's actually pretty rare, and for some people it's never. Our second model will address that rare case in two ways. One is to allow people to switch out the battery pack, so you can go to a battery-change station just like you'd go to a gas station. The second path is to have a high-speed charge. If you have a high-powered onboard charger, you can get an 80 percent charge in 45 minutes. If you're going from L.A. to San Francisco, which is about a 400-mile trip, you can drive 200 miles, stop for lunch, charge your car in the restaurant parking lot, finish lunch and continue the remaining 200 miles to San Francisco.

What is your solution to the problem of needing a large or heavy battery in order to store a lot of energy?
I think what we'll see is an increasing amount of energy being stored in the battery pack and a lowering of the cost of the battery pack over time. It's not the only thing. The efficiency of the electric motor, the efficiency of the powertrain, the rolling resistance are all important.

Why is it so difficult to make a battery that can hold a huge charge for lots of time?
I think engineering is harder than physics, and I'm a physics guy. If you look at the improvement of battery energy density, it tracks to about 8 or 9 percent a year.

Do you think all cars will be electric?
Absolutely. In 30 years, a majority of all new cars produced in the United States, perhaps worldwide, will be electric. And I don't mean hybrid. I mean pure electric.

When you plug into an outlet, you're in effect plugging into coal, because a lot of the electricity produced in the United States is coal-fired. Does that bother you from a global-warming perspective?
I'm very familiar with the "long tailpipe" criticism. I have another company, SolarCity, which is the largest provider of solar power to homes and businesses in California. The solution is to get a SolarCity solar panel on your roof and then have an electric car. It takes actually only a small solar-panel setup—of about 10 by 15 feet—to generate 200 to 400 miles a week of electricity for your car.

A lot of people say solar is really only viable because of massive government subsidies.
That's a very simplistic statement. Solar is viable in certain parts of the country—depending on the local cost of electricity—without subsidies. Subsidies make it economically viable in more places than it would otherwise be. Like almost any industry, there are huge economies of scale. As solar gets bigger and bigger, it gets increasingly economically viable.

If you had a magic wand, what change would you make in America's energy policy?
I would certainly shift any subsidies on hydrocarbons to renewable energy. It's ludicrous to be subsidizing oil and coal and other things that clearly don't have a long-term future and bring great damage to the environment.

Would you like to see a carbon cap-and-trade system in the United States?
I'm actually a bigger fan of a carbon tax, just because it's a simpler thing to do than cap-and-trade.

What you're describing is a pretty optimistic future. You believe that American industry can successfully refashion the transportation sector to run on renewable energy?
I am actually fairly optimistic that we will solve this problem. But there's an important caveat there, which is, we cannot be complacent and just assume it will happen. There needs to be strong government action. There needs to be private investment; there need to be entrepreneurs that attack this problem. We will solve this problem—but only if we do all that.