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Elon Musk: Every New Technology Starts as a Toy for Rich People

By Elon Musk · Product & Building · 1 min read

People misinterpreted why Tesla built a sports car first. It wasn't because Musk felt there was a shortage of sports cars for rich guys. New technology is always expensive when it starts out.

Key Points

Any new technology is expensive when it starts out — computers, cell phones, even gasoline cars were toys for rich people
Engineers make it work first, then optimize, then optimize again — you can't skip that order
Tesla couldn't afford a billion-dollar car plant. They had both a volume problem and a new technology problem.

Any new technology is expensive when it starts out. You can point to pretty much anything.

Why Tesla Built a Sports Car First

Musk: People often misinterpret why we created a sports car — sort of like I felt that there was somehow a shortage of sports cars for rich guys. That's not the reason.

Any new technology is expensive when it starts out. You can point to pretty much anything. The first thing engineers are trying to do is make it work. Then you optimize. And you optimize. And you optimize. Look at the early days of computers or cell phones — even gasoline cars used to be toys for rich people.

Any new technology is expensive when it starts out. Even gasoline cars used to be toys for rich people.

A Volume Problem and a Technology Problem

Musk: We were just a little startup. There's just no way we could afford a billion dollars to make a giant car plant that would make hundreds of thousands of cars a year — because that's the kind of volume you have to get to make cheap cars.

So we had both a volume problem and a new technology problem. You have to reach scale and you have to work the bugs out of the system. And you want to be making mistakes at a small scale.

We had both a volume problem and a new technology problem. You want to be making mistakes at a small scale.