Elon Musk: Self-Driving Cars, Hyperloops and a Cheaper Tesla
Self-driving cars will be in Tesla's future, CEO and founder Elon Musk told CNBC, and the company has been in preliminary talks with Google about the idea. In a wide-ranging interview Friday, Musk also dismissed reports that he was dating Cameron Diaz, discussed the timeline for a lower-priced Tesla model and gave hints about his "hyperloop" travel concept.
Musk offered insight into Tesla's lower priced sedan, which he said is expected to hit the market in the next three to five years. He said the model would be comparable to the BMW 3 Series or Audi A4 and be about 20 percent smaller than the Tesla Model S, at half the price.
Musk also said he was in preliminary talks with Google about self-driving car technology and expects that it will become a component of Tesla vehicles. He also said the company is working on ways to improve recharging times and provide "entertaining" experiences for customers while they charge.
After his comments about a "hyperloop" travel system between San Francisco and Los Angeles, Musk said he was presenting the idea but wouldn't have time to execute on it himself. An announcement is scheduled for June 20, he said. "After that news subsides," he said, "that's when I'll talk about the hyperloop idea."
Below is the interview as it was live blogged on Friday morning.
10:47 a.m. EDT: Musk denies dating Cameron Diaz. "I don't know where people got that from," he said.
10:46 a.m.: Says there is a "good chance" Tesla will partner with Google on self-driving cars. Has had preliminary meetings with the Google founders.
"Has some differences with opinion. But we'll certainly make self-driving cars or autopilot cars."
10:45 a.m.: Lower priced Tesla model will be 20 percent smaller than Model S. Compares car to an Audi A4 or BMW 3 Series.
10:45 a.m.: On resale value, Musk says the Model S will have highest value out of any premium sedan. "Demand is going to exceed our production capabilities for some years to come, so there's scarcity there."
10:44 a.m.: Aiming to improve the charge speed, other ideas for minimizing people's time at charging stations. "We'll come out with some entertaining things over time."
10:43 a.m.: "The United States is definitely ahead in culture of innovation. If someone wants to accomplish great things, there is no better place than the U.S."
10:41 a.m.: Musk estimates that a "hyperloop" would be cheaper mile-by-mile than high speed rail. "Isn't there something much better than could be done? I think it could be done for about one-tenth of the cost for the high speed rail scheduled for California."
10:40 a.m.: "One more meaningful Tesla announcement" scheduled for June 20. "After that news subsides, that's when I'll talk about the hyperloop idea."
Musk says he doesn't have time to develop the idea, but hopes that someone else picks up the project.
10:39 a.m.: "Our core customer is someone who wants the best car in the world."
10:38 a.m.: In three to five years, the company expects to come out with a model that is half the price of the Model S.
10:37 a.m.: Musk says that auto loan financing from major banks for the Model S helped accelerate sales. "The finance product is potentially accessible to 5-10 million households," he estimates.
10:35 a.m.: Musk expects 25 percent gross margin without zero emission tax credit. "We expect to make money without any government subsidies by the end of this year."
He added that most of the company's shipments will be overseas, with no subsidies.
"I think we could have done it without government support. It helped accelerated things, but I don't think it was necessary. It was very helpful," he said.
10:34 a.m.: Before the super charger announcement, there were 20,000 units per year for North America, which was three times more than they expected.
10:33 a.m.: Musk says about one-fourth of people who test drive the car end up buying one. "It's a really high conversion ratio," he said.
10:30 a.m.: The interview is about to begin.
10:22 a.m.: Elon Musk is about to speak with "Squawk on the Street." Tweet us your questions
@SquawkStreet and you may see them asked on the show!
10:00 a.m.: The video of Cramer's test drive just posted on CNBC.com! Check it out here or watch it below.
9:47 a.m.: After seeing a recap of his test-drive on "Squawk on the Street", Cramer said, "The stock is a cult stock and it's really difficult to figure out where it can go. When you get behind the wheel, you want to get behind the stock. I'm trying to distinguish that. I'm saying that's not the right thing to do."
"I can totally understand why someone that test drives a Tesla wants to buy the stock, because it's about as cool of a thing as I have seen."
8:50 a.m.: Jim Cramer on "Squawk Box" about his Tesla test drive: "If you're driving a Tesla, it changes your life. This thing is an incredible wonder. I'm not talking about the stock, I'm talking about driving the car."
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