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Why It’s Okay that Tesla Makes Cars for Rich People

Tesla’s innovations could make EVs more competitive.

The U.S. Department of Energy has been criticized for loaning money to Tesla Motors because the company makes cars that only rich people can afford. That’s probably part of the reason Elon Musk, Tesla’s CEO, made such a big deal last week in saying that, with a new payment plan, and figuring in savings from gas prices, about 10 percent of the U.S. population can afford a new Model S, up from about 1 percent without the plan.

Of course, that still leaves a lot of people out, which is a problem if the point is to make a big dent in petroleum consumption.

Still, while there are many valid reasons for objecting to the DOE’s funding of Tesla—or any startup for that matter—the fact that the car it makes is expensive isn’t one of them. Tesla innovations might help make electric vehicles more competitive with gas powered ones, leading to the more widespread use of electric cars and lower oil consumption. More specifically, it’s lowering the cost of the battery, and it’s showing how, in some ways, electric vehicles are actually more valuable—and worth paying more for—than gas-powered ones.

Ford’s electric Focus is just a much more expensive, and much shorter range, version of its gas-powered focus. The Nissan Leaf, Motor Trend declared feels “completely normal, not unlike any other four-cylinder hatchback on the road.” The Model S, on the other hand, will out-accelerate just about any other car you might encounter on the road because it takes advantage of the responsiveness of electric motors.


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