Elon Musk said it’s ‘financially insane’ to buy a car that isn’t electric and won’t be able to drive itself — but there are 3 reasons why he might be wrong

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Tesla CEO Elon Musk says it doesn’t make financial sense to buy a car that isn’t electric and won’t be able to receive an upgrade that will make it self-driving.
But there are multiple factors that call Musk’s claim into question.
Musk says Tesla owners will be able to make money by using their cars in an autonomous ride-hailing service next year, pending regulatory approval, but experts doubt the technology will be ready.
While electric vehicles do have some advantages over gas-powered ones, there are some drawbacks, like a lack of options in some segments and limited charging infrastructure.
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Tesla CEO Elon Musk says it doesn’t make financial sense to buy a car that isn’t electric and won’t be able to receive an upgrade that will make it self-driving, but there are multiple factors that call Musk’s claim into question.

"I think it’s basically financially insane to buy anything except an electric car that is upgradeable to autonomy," Musk said on Tuesday during Tesla’s annual shareholder meeting, echoing an assertion he made during an investor event in April.

Musk’s claim rests in part on his prediction that Tesla vehicles will be able to drive without human intervention next year and generate revenue through an autonomous ride-hailing service run by the electric-car maker, pending regulatory approval. But autonomous-vehicle experts have cast doubt on that prediction, saying it is unlikely that Tesla or any other company will have autonomous-driving technology that is suitable for consumer vehicles in the near future.

Tesla did not immediately respond to a request for comment.

If Tesla does not have fully-autonomous driving technology ready by next year, it won’t be the first time the company has missed a target set by Musk. In 2015, he said Tesla’s autonomous-driving technology would be ready in about two years. The company has also passed multiple deadlines to send a self-driving vehicle on a road trip across the US.

There are some downsides to electric vehicles

It’s also not clear that electric vehicles are, at the moment, the best option for every car customer. To be sure, EVs are better for the environment than gas-powered ones, have some performance benefits in areas like acceleration, and can produce long-term savings on fuel and maintenance. And Tesla owners have expressed high levels of satisfaction in surveys, though not without reports of reliability issues. But there are drawbacks that could steer current consumers away from electric vehicles.

While automakers plan to produce an increasing number and variety of electric vehicles in the coming years, the options available now are somewhat limited. Consumers looking for an affordable electric SUV, for example, will have to pay a premium above the average prices for gas-powered alternatives. And the most affordable electric SUV available in the US, the Hyundai Kona Electric (which starts at $36,450), cannot be purchased in most states.

Some consumers may also have concerns about charging infrastructure. Electric-vehicle owners with a garage can charge their car at home, which in many cases provides enough range for most driving activity, but long trips will likely require a charge away from home. While the number of charging stations is growing, there are around 21,000 in the US now, compared to over 120,000 gas stations.

The relative lack of options in some segments and limited charging infrastructure may explain why electric vehicles represent around 1% of the US auto market.

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Source: Business Insider – mmatousek@businessinsider.com (Mark Matousek)