Electric cars will eventually form the majority of all cars produced, Elon Musk claimed in an interview this week. The Tesla CEO, speaking to Chinese media during a visit to Shanghai, claimed that the industry would reach the tipping point in around 10 years’ time.
The shift would represent a major moment in automotive history, and a big milestone toward Tesla’s stated mission to “accelerate the world’s transition to sustainable energy.” The company released its first electric vehicle in 2008, the $108,000 Roadster, and has gradually moved to more affordable levels with the launch of a $46,000 Model 3 in October 2018. The market has exploded in size during that time, from just over 100,000 electric vehicles in use globally in 2012 to 1.9 million in 2017. Musk, who was in Shanghai to mark the start of construction for the company’s third Gigafactory, told state broadcaster China Central Television that “probably in 10 years, a majority of new cars made will be electric, and I think autonomy will probably be even faster than that.”
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Third-party analysis suggests sales will shift a bit later than 2030. Statista predicts annual global electric vehicle sales will reach just 14.1 million in 2025, and JPMorgan predicts sales will cover 30 percent of all vehicles in that year. Morgan Stanley predicts sales will account for the majority of cars by 2038, but the same analysis claims that internal combustion cars could become unprofitable as early as 2028, as electric vehicles switches over to drive future profit.
The Shanghai Gigafactory is a key component of Tesla’s ambitions to bring more affordable cars to a broader audience. When it reaches full production capacity, the factory is expected to produce 500,000 cars per year, covering cheaper versions of the Model 3 and upcoming Model Y sports utility vehicle. Musk wrote on Twitter this week that such entry-level cars “must be made on the same continent as consumers.” Chinese annual electric car sales are expected to reach nearly five million in 2025, a nearly tenfold increase from the 579,000 sold in 2017, and Musk said in the interview that the “opportunity is very significant for all companies.”
Tesla is pressing for a tight deadline to start the Shanghai Gigafactory. Musk claimed that initial construction could finish by the summer, with the first Model 3s rolling off the production line by the end of the year.
