500 million cars in 1996. Today, about 1 billion cars. Projection is that we will hit 2 billion from growth in the developing world.
Oil at that time was at $90/barrel. Now costing $60-70/barrel to make it. “The $20/barrel stuff we were using only in 2002 … there’s almost no production left that the production cost is that cheap.”
“The VCs were particularly interested in hydrogen fuel cells at the time. I have a whole presentation of why that’s really a nutty idea.”
“We did this thing called well-to-wheel energy efficiency…. If you look, a pretty good car is 26 MPG. And we did this for every conceivable fuel source, and we have a whole white paper on that. What that translates to [for a gas car] is about 1700 watt-hours per mile. A really nice gasoline car you can get down to about 1000 watt-hours per mile…. Electric cars are very, very efficient once the energy is on board. So, it’s about 250 watt-hours on board. But you have to make the electricity, you have to transport it, and stuff… Well, the worst possible case is a legacy coal plant. They just suck in all ways…. Their energy efficiency is terrible. It’s only 29% [of the energy in the coal]…. If you power an electric car with a legacy coal plant — there’s no place you could really do that, but if you did that — it would still be better than a really good gasoline-powered car. And if you used a state-of-the-art coal plant… that drops the watt-hours per mile down. And if you use natural gas… you get down to half a kilowatt-hour per mile....”
“New technology is frequently quite expensive, and it comes in at the top. Cell phones used to be $2,000 apiece…. And you’ve got to be able to get that market share and get the volumes up to push it down. So, it’s weird to think that electric cars would start at the cheapest possible thing.”
“It turns out that Priuses were selling really well in 2003. Now, Lexus… they were a little shocked. The Prius was a little bit of a publicity stunt. They brought it out to California for a variety of political reasons. They didn’t expect it to sell very well. And it sold pretty well…. But what freaked them out is that it cannibalized their Lexus sales. People were trading in their Lexuses and getting a Prius, which was built on their absolute cheapest possible platform that Toyota made at the time. So, again, Toyota thought that Priuses would only be for people that wanted to save money on gas. And instead, it was for people who had discretionary money that wanted to make a statement — you know, cars are all about statements…. Cars are all about making a statement. These people bought Priuses to make a statement to do the right thing — for whatever reason they wanted to do the right thing, they were doing the right thing. So, near where I live, in Palo Alto, it was a cliche: I mean, every driver had a Prius and a Porsche.”
“This is the plan. Every iteration is going to be nice but a little bit cheaper. [The Model X] is still gonna be kind of an expensive sedan, because the technology, the fundamental electric technology, is pretty expensive. Not the motors and the power electronics, but the batteries, and batteries get cheaper at about 7% a year, on its natural kind of glide slope. It’s sort of a really slow Moore’s law…. Or if you keep their price the same, their capacity increases about 7% a year.”
“And they’re super fun to drive.”
This quote from a guy they were initially trying to get as an investor, who had just driven away in his Porsche after test driving a Tesla engineering prototype, and angrily called a few minutes later, is classic: “What the hell did you do to my Porsche? I just spent a quarter of a million dollars on this thing, and it sucks now!“
It was amazing to hear his view on what technical competency remains in most car companies, that electrical design is not one of them 
