LU STOUT: Plummeting oil prices, is that going to undercut the viability of electric cars? Your thoughts on that?
ELON MUSK, CEO, TESLA: Well, it definitely reduces the power of the economic forcing function to go electric if oil is at decadal lows. I think in a case of Tesla it probably affects us a little bit less because we have quite significant product differentiation. For lower priced EVs where it is more of an economic decision, I think they will actually take a pretty big hit. So, the EV industry as a whole I think will definitely suffer for that because of the low oil prices. It kind of makes economic sense that it would.
LU STOUT: So it could stall the rollout of the Model 3?
MUSK: No. I don’t think — the Model 3 will have pretty substantial product differentiation. So, you essentially have to say, okay, here’s the value. The value is a certain level and then the price is a certain level. So, as long as the value and the price make sense relative to each other, a product will be fine.
LU STOUT: A question about Solar City. You’re also the chairman of Solar City where you are launching solar panels, building out solar panels and systems. Why does solar make sense?
MUSK: The people of earth will have to make a decision to what degree are we willing to sacrifice the future for the present. The overwhelming opinion of the scientific community is that should not put billions of tons of carbon into the atmosphere, which is what we are doing. So, but unless we change the rules — because the rules currently strongly favor hydrocarbons. Unless we change the rules, I think we are in for a really rough future.
LU STOUT: I mean, is that at the back of your mind of how you can seduce the public to buy into a low carbon when it’s so easy with low oil price that they don’t need to go solar. They don’t need to go electric, so you have got to make it cool for them, you’ve got to make it enticing for them.
MUSK: Well, that’s what we are trying to do with Tesla is we’re trying to make the electric car so compelling that you don’t care about cheap gas. That’s harder I think on the solar front, because electricity is more of a commodity, you don’t — it’s not like different types of electricity, it’s essentially a commodity.
I mean, fundamentally we have a delayed gratification issue collectively as a species. Like, are we willing to sacrifice the near term for the long-term or not? I mean, at some point we will have no choice, because we will run out of hydrocarbons to mine and burn, and we will have to transition to a sustainable energy economy.
So, sooner or later we’ve got to go towards a solar electric future. It is better for the future of Earth if we go sooner than later.