Tesla Model Is A ‘Great Coal Car’ [REPORT]

Elon Musk has been heralded as a genius for creating PayPal, designing Tesla Motors Inc (NASDAQ:TSLA)’s Model S, and now proposing an alternative mass transit system called the Hyperloop. One thing he isn’t usually complimented on is his great use of fossil fuels, something Musk wants the world to move away from. But according to Forbes contributor Alex Epstein, the Model S should really be seen as a ‘coal car’.

Tesla Motors’ goals

The Tesla Model S is the first commercially viable electric car. It’s still extremely expensive, about $80,000, but it has found an audience and Tesla Motors Inc (NASDAQ:TSLA) is turning out a profit. Prices for future models are supposed to drop, and Tesla Motors’ goal is to produce affordable electric cars in the not-so-distant future. Musk has called the Model S a step away from the hydrocarbon economy, but as Epstein points out “the electricity in an ‘electric car’ must come from somewhere–and that somewhere is usually fossil fuels: coal, oil, and natural gas, which produce a combined 67% of electricity around the globe, because they are so cheap, plentiful, and reliable.”

Epstein points out that 80 percent of new power plants in the developing world are coal-powered while wind and solar power account for less than 1 percent of the world’s electricity.

Epstein on energy sources

Mixing developing economies in with developed economies is somewhat unfair, since poorer nations are looking for the cheap energy boom that developed nations went through a century ago, but Epstein has a point that electricity is always the conduit of energy, but that energy has to be produced somewhere else. The difference between an electric motor and an internal combustion engine is that the electric is as environmentally friendly as the rest of our energy infrastructure (currently, not great), while an internal combustion engine will always burn gas.

Epstein also fails to mention nuclear energy, which produces about a fifth of the electricity in the United States, or hydropower which accounts for about a sixth of electrical capacity worldwide, neither of which use any fossil fuels. Even if nuclear is the best option available, electric cars become cleaner as we improve our energy grid. Gas guzzlers offer no such hope.