Tesla Motors CEO Elon Musk predicts his company will sell a "few million cars" annually by 2025 — a massive leap over current production — and be profitable by 2020.
The 12-year-old Palo Alto, Calif.-based automaker previously said it hoped to sell 500,000 of its stylish vehicles a year by 2020. Musk, who spoke Tuesday at the Automotive News World Congress in Detroit, has overshot previous volume estimates. And some models have been delayed, including the Model X SUV, originally planned for 2013 but now on track for this summer, he said.
Morgan Stanley auto analyst Adam Jonas forecast in December that Tesla will sell 297,000 vehicles in 2020; its 2014 sales are estimated at 33,000.
To meet his big volume targets, Tesla will need to expand beyond its factory in Fremont, California Long-term, Musk said, he'd like another Tesla factory in the U.S., plus plants in Europe and Asia, so it doesn't need to ship cars long distances to meet local demand.
Asked if he would consider building a factory in Detroit, Musk didn't rule it out — but took a shot at the legislature.
"Not out of the question — maybe Michigan shouldn't stop us from selling cars. That would be a nice gesture," Musk said.
Last year, Gov. Rick Snyder signed legislation banning automakers from selling vehicles directly to customers in Michigan — a move pushed by local auto dealers to block Tesla from selling cars.
General Motors Co. this week unveiled a concept electric vehicle — the Chevrolet Bolt — that it says can go up to 200 miles on a single charge. It would sell for about $37,500 to compete with a planned lower-cost Tesla car. GM North America President Alan Batey dismissed ideas that the Bolt was aimed at Tesla, which sells the Model S for around $100,000, he said. "They're for the rich and famous, this is for the people," Batey said.
Musk told reporters after the World Congress event that he didn't view the Bolt as a "competitive threat" to Tesla because he thinks all cars will eventually be electric. He praised GM for moving ahead, but said there were no features in the Bolt or other new EVs that he wanted to emulate.
Tesla's stock fell $15.24 a share in after-hours trading, or 7.5 percent to $189.38, on Musk's comments that sales in China were "unexpectedly weak in the fourth quarter."
Musk said that despite the decline in Chinese sales, a perception of charging problems had been reversed and that the company has recently seen an uptick. He said gains in sales in North America and Europe made up for the decline in fourth quarter-sales in China.
The billionaire founder of PayPal and Space X has become the biggest rock star in the auto industry, making huge bets on batteries and vowing a massive increase in sales. He said he is focused on doubling production capacity and beginning work on the lower-cost Model 3, rather than seeking new deals with other carmakers. But he is open to preliminary talks with automakers about long-range projects.
Musk reiterated he will be CEO until at least 2020 when he expects production to hit 500,000 vehicles. He said he will be at Tesla "as long as I am alive" but he may not be CEO forever.
The company is now worth about $25 billion. Musk said by the time the lower cost Model 3 is in full production in 2020 it will be profitable. The Model 3, which will be 20 percent smaller than the $100,000 Model S, will cost $35,000 before the federal tax credit — meaning it would be about $2,500 cheaper than the Bolt.
Musk said he is "absolutely certain" that Tesla will cut battery costs by 30 percent by 2020, with further cost cuts to follow. Lower cost may make electric cars more attractive to more buyers. In the meantime, their sales across the automotive industry have remained low and face headwinds with sharply lower oil gas prices.
Tesla has poured the foundation on a new $5 billion battery factory in Nevada to make battery cells beginning in 2016 to reduce battery costs. It is a big bet, Musk said, "but I don't know any other way to do it." He said Nevada is "only providing a few hundred million" for the factory not the $1.5 billion that some have suggested.