Are We at the Electric Car’s Tipping Point?

A Tesla Roadster Sport sits in a dealership showroom on November 3, 2011 in Chicago, Illinois. (Scott Olson/Getty)

That’s what Henry Ford proclaimed early in his career. Ford, of course, is associated with the democratization of the automobile—the Model T was the first mass-owned car. But Ford started off as a luxury-car maker, making high-tech, impractical, very expensive vehicles for the very rich.

That’s how it often goes when new technologies hit the market—they’re produced in small batches at a high cost. But as the companies increase production, as unit volumes rise, and as competitors enter the field and innovate further, the cost of the products falls, and falls, and falls again—to the point where the middle class can afford them. That’s what happened with the telephone, the car, the television, the personal computer, the mobile phone. A century after the Model T took the nation by storm, could the same process be happening with electric cars?

Well, maybe.

Look at what Tesla is up to. The electric sportscar manufacturer has been on something of a tear—notching its first profit, ramping up production, and paying back the big government loan it took.

The high price of the Tesla Model S—about $60,000—is inhibiting more widespread adoption. But the more practice it gets making cars, and the more volume ramps up, the greater the ability to cut prices. This week, Tesla CEO Elon Musk said the company is aiming to produce a version of the Tesla that would retail for about $30,000 in “probably three to five years.”