Responding to T. Boone Pickens' plan to put natural-gas cars on the roads, Musk said that -- while natural-gas cars are better than gasoline cars -- it would be more efficient to use methane at a power plant, then use the resulting electricity to charge electric cars -- even with all the transmission losses.
"It's going to be more than twice as good as using natural gas directly in the car," he said.
Electric cars still face some challenges, however.
Aside from the high cost of batteries, the infrastructure to recharge electric-car batteries is an important issue, and Musk said he doesn't know if people will prefer to swap their battery packs or fast-charge their batteries.But he said he believes the "inflection point" at which mainstream drivers will be willing to make the switch will come when batteries can be charged in about an hour. That would allow people driving from San Francisco to Los Angeles to make the trip with just a single stop for lunch, he said. With electric cars that can drive 300 miles on a single charge, it would mean that drivers could simply stop at Starbucks (SBUX - Get Report) to recharge, he said. And if even a coffee break is too much of a hassle, drivers will hopefully be able to stop and get their batteries changed out in three to four minutes, he said. Tesla's range has been growing and has reached 244 miles, in combined highway and city driving, with the air conditioning on, Musk said. Batteries are still expensive, however. To deliver the Model S at the expected $60,000, Tesla plans to offer a 165-mile range, then charge premiums for batteries with 230-mile and 300-mile ranges, Musk said. For more information about Greentech Media, please visit www.greentechmedia.com.