Tesla’s Elon Musk hints at cheaper, smaller EV after Model 3

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Tesla’s Elon Musk discusses the future of electric vehicles and battery storage and the need for a carbon tax in wide-ranging discussion in Norway.

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The tension is building again as chronic innovator, visionary, world changer Elon Musk is leaning into the next iteration of sustainable transport. In a talk yesterday in Oslo, Norway, Elon spoke with the Prime Minister of Norway and touched on Tesla’s plans for what comes after Model 3, mass transit and urban mobility solutions, battery pricing, renewable energy … and, of course, the importance of putting a price on carbon emissions.

Elon Loves Norway

The discussion kicked off with Elon spreading some love on Norway. Norway has taken an aggressive approach to driving EV adoption in the country and, as such, has the highest concentration of EVs per capita of any country in the world.

Elon noted this and shared his vision for a sustainable economy which pairs sustainable electric power generation with sustainable, battery-electric vehicle transportation. Because of the work Norway has done to drive early EV adoption, it is already strategically positioned to pave the way for the rest of the world to a place run on completely sustainable transportation.

Supporting that migration, Norway has a surplus of hydropower generation resources due to the natural landscape of the country. Elon advocated making use of the natural hydroelectric resources of the country in a responsible way even advocating the use of micro turbines which can tap into hydro resources with a smaller impact on the natural landscape.

In summary: “I love Norway!” — Elon Musk

Tesla in Norway

Building on that theme, Elon shared that Tesla does its cold-weather engineering, testing, and validation in Norway and has made a large investment in charging infrastructure in Norway to the point where Tesla has invested more in Norway per capita than any other country outside the US. It’s clear that Tesla sees Norway as both a key market in the short term but also as a great model for other countries looking to transition to EVs to follow.

A Carbon Tax

As has been the approach for several of the last talks, Elon made a point of boldly using his platform to speak to the importance of taking action on climate change and CO2 and CO2e emissions (CO2e is “CO2 equivalent” gases — aka, other greenhouse gases). Putting a price on what are currently unpriced externalities that essentially amount to trillions of dollars in subsidies enjoyed by the petrol industry over the last hundred or so years is key to letting the market correct for these invisible risks.

With renewables like solar and wind already beating their hydrocarbon-based counterparts on price in many markets, putting a price on carbon and letting the market weed out the victor will only increase the speed at which we transition to renewable generation for our electricity. Flexing his cross-cultural fluency, Elon used the example of a petrol car speeding down the road and asked the audience to imagine a huge krone (Norwegian currency) sign on it because of the subsidies it is getting by being able to pollute for free. Polluting a resource owned and used by the citizens of the world must be taxed, as there are direct financial, health, climate, and security impacts to the gases currently being pumped into the atmosphere.

What’s Next for Tesla

Reiterating what Diarmuid O’Connell shared last week, Elon stated that there are “now almost 400,000 reservations for the Model 3” and even leaned into what Tesla is working on … or at least thinking about working on after Model 3. Specifically, mention was made of a 4th-generation vehicle and the promise of smaller cars that would be more affordable than the Model 3.

With Model 3 being affordable to ~50% of potential buyers, the fact that Tesla is looking at a compact or economy-sized vehicle post-Model 3, it’s clear that, while the Model 3 is a MAJOR accomplishment, it is not the crowning achievement for the company, simply the end of the first phase of the journey. Elon spoke very casually with the PM and, as at the Model 3 unveiling, Elon was in a very happy mood. It really feels like getting Model 3 out into the spotlight and, maybe more importantly, securing hundreds of thousands of reservations have taken a load of stress off his shoulders.

Urban Transportation Solutions

Having put the stress leading up to the Model 3 event behind him, Elon and team are back at the whiteboard, dreaming up next-generation solutions to either design and deploy in-house or to punt to the broader scientific and engineering community a la Hyperloop. As the discussion with Ketil Solvik-Olsen, the Norwegian Minister of Transport and Communications, shifted towards cities, the idea of Tesla building its own autonomous ride-sharing solution like Uber or Lyft once again reared its head. Here’s the dialog from that exciting piece of the discussion:

EM: We have an idea for something which is not exactly a bus but would solve the density problem for inner-city situations. I think we need to actually rethink the whole concept of public transport and create something that people are actually going to like a lot more. I don’t want to talk too much about it.

Moderator: Are you talking about the hyperloop?

EM: No, no. The hyperloop is great for going between cities … but … I have to be careful what I say. I very much agree with solving the high-density, over-transport problem. I think there’s a new type of car or vehicle that I think would be really great for that and actually would take people to their final destination and not just to the bus stop, which I think is great.

KS-O: So where do you see autonomous vehicles in this?

EM: Autonomous vehicles are key.


This builds on what Elon hinted at in a recently quarterly update and confirms that Tesla isn’t just building vehicles and battery packs but is looking much more comprehensively at transportation and toward building sustainable solutions for the entire spectrum. With Tesla being the second-largest EV producer in the world today, behind BYD, and plans to continue the crazy growth trend over the next few years, would Lyft and Uber stand a chance against a Tesla-backed autonomous ride-sharing service?

Granted, considering GM’s recent $500 million investment into Lyft and more recent $1 billion purchase of Cruise Automation, it’s clear that it won’t be a full court sweep by Tesla, but it’s not difficult to imagine Tesla moving into the market with a commanding lead in autonomous technology, battery pricing, and brand image all being rolled together to put the hurt on yet another set of incumbents in yet another market.

Batteries in the Future

Speaking to the challenges that batteries pose in the overall equation, Elon shared how the brightest minds in history have struggled to increase the capacity and density of batteries but are basically fighting against the laws of thermodynamics … even going so far as to say that improving battery technology is one of the most difficult problems we have been faced with.

The Tesla approach to cracking the nut of battery price equation is to centralize everything, bringing in loads of raw materials and having finished packs coming out as the products … in short, the Gigafactory. Centralizing everything maximizes economies of scale, while at the same time cutting out non-value-add transportation and warehousing, which, when talking about something as heavy as batteries and raw lithium, can add up quickly.

You can view the full talk, discussion, and Q&A with Elon … which is one of the best discussions in the last few months … here. There is a brief intro, with Elon coming on around minute 18. It’s worth noting that the video didn’t play for me in Chrome but worked fine in Safari and Firefox (c’mon, Google, what’s up with that?!).

Source: CleanTechnica. Reproduced with permission.

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  1. Jeremy Chu 3 years ago

    I’m thinking it will be called the “Tesla Y”, so we have S-3-X-Y

    • Brunel 3 years ago

      That would subject their showroom staff to countless “jokes”.

      When Nandos tried to do similar, their staff were subjected to countless sleazy lines by diners.

  2. MaxG 3 years ago

    Love this guy… open production facilities in like-minded nations; so Norway he likes, Australia he doesn’t — and I don’t blame him.

    • solarguy 3 years ago

      Max, why do you believe Musk doesn’t like Oz?

      • MaxG 3 years ago

        In context with the article, and that South Australia already got a ‘nay’ for a local production facility, led me to say ‘he doesn’t like Oz in the context of environmental credentials. That is what I read between the lines, as in other countries having better credentials. I would do the same thing in his shoes…

        • solarguy 3 years ago

          You could be right in your thinking Max, but there could be other reasons. Remember, assumptions are the mother of all f%#k ups!
          Look if Musk, doesn’t want to come here, we could build our own EV industry, after all we have built cars for decades, all it would take is for some business men to see the vision and perhaps with some government help too make it a reality.
          We could supply the domestic market and then the international market.

          • nakedChimp 3 years ago

            The government was so hostile to CSP that the world leading company from Oz emigrated to the US.. that’s how much help one can expect here.

          • solarguy 3 years ago

            I know what your talking about and that was maddening, as once again, nobody would invest from here.
            But it’s always a matter of won’t, rather than can’t. Soon we have a chance bring in a new government and with that investment in RE will once again flow.
            However the richest in this country need to gain some vision, like investing in EV manufacturing, instead of dig it up and flog it off.

          • john 3 years ago

            I very much doubt that any Australian Company will get the funding the usual story is they develop the IP and someone else develops it then they do not get paid.
            Just look at WI-FI for a starter.

            In April 2012, the Australian research institution settled a 10-year dispute with US telecommunications companies including AT&T, Verizon and T-Mobile worth around $220 million. And that’s not the only settlement it received — dozens of other major technology companies have been up against CSIRO.
            even Intel, Dell, HP and Microsoft were battling CSIRO’s lawyers in 2005, filing a counter-suit against the Australian institution’s patent damages request.
            CSIRO’s US patent on Wi-Fi expired at the end of 2013.

            So this research organisation enabled you to use your tech inside your house and the tech companies pinched it and paid for only 1 year.

        • john 3 years ago

          Australia has proven it’s credentials with relation to the carbon economy.

  3. john 3 years ago

    I will post the link to the video as i do not see it above.

  4. john 3 years ago

    OK posted the video
    On about the 20 minute mark is a very interesting comment re autonomous vehicles within the inner city area.

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