Reporters interview CEOs all the time, but it's rare for those CEOs to end interviews abruptly.

Which is what makes an article in Barron's about Tesla Motors [NSDQ:TSLA] and its current high stock price so entertaining.

In "Recharge Now!", author Bill Alpert opens with a comparison between Tesla CEO Elon Musk and Iron Man comic-book hero Tony Stark.

He summarizes the rave reviews received by the Tesla Model S all-electric luxury sport sedan and notes, accurately, that Tesla stock was propelled to its current heights on the basis of one profitable quarter and a classic short squeeze.

In a piece whose main focus is the company's stock price, he suggests that long-term demand for Tesla's cars (which start at $69,900) is still something of an unknown.

"Tesla irked analysts last month when it stopped disclosing its end-of-quarter order backlog," he says, "after previously trumpeting a 15,000-unit reservation list."

Then he gets to his core question: Will lithium-ion battery costs fall enough by 2016 to enable Musk to fulfill his promise of a Tesla electric sedan with a 200-mile range that costs $30,000 to $40,000, only half as much as the Model S (thereby perhaps justifying its stock price)?

The current price of Tesla stock, Alpert argues, is "a bet that Tesla can sell hundreds of thousands of cars a year" once it launches its third-generation car in 2016.

But that would require "breakthroughs in battery technology to get Tesla to that price level without skimping on range."

The pace of battery-cost declines is one of the most-debated topics in the electric-car world and the auto industry.

Over two decades, small-format lithium-ion cell costs have fallen an average of 7 percent a year. It's not steady progress; the declines come in a series of "stairsteps" as new chemistries and new production processes are introduced and production volume rises.

Elon Musk signs new 2013 Tesla Model S at Tesla Store opening, Austin, Texas [photo: John Griswell]

Elon Musk signs new 2013 Tesla Model S at Tesla Store opening, Austin, Texas [photo: John Griswell]

So everyone expects costs to fall, but the question is, by how much?

Morgan Stanley analyst Adam Jonas says battery-pack costs should fall from $400 per kilowatt-hour to $200 by 2016.

But GM's Bill Wallace is quoted pegging the improvement at 20 percent over "the next few years," with an outside chance that the decline could be as high as 40 percent in five years if new technologies pan out.

Alpert summarizes the likely decline by 2016 at 20 to 30 percent, saying that "few expect" improvement much beyond that range.

And that was what he was trying to discuss with Musk in a phone interview on Friday when Musk hung up.

As Alpert reports it:

"I have no interest in an article that debates what we consider to be an obvious point -- which is that there is a dramatic reduction in battery costs," Musk said, after a few questions.

"You clearly do not understand the business. My apologies. I am terminating the interview."

Tesla Motors - Model S lithium-ion battery pack

Tesla Motors - Model S lithium-ion battery pack

The article also recaps Tesla history, underscores the importance of the 2016 model to its future, looks at disappointing sales of lower-range electric cars to date, and adds some additional data on battery-cost projections.

Musk, meanwhile, told Alpert--before he hung up--that battery improvements would knock $10,000 to $12,000 off the cost of a Model S battery pack down to $10,000 to $12,000.

Debate over the pace of battery-cost reductions will continue to rage, and Tesla's stock will rise and fall over months and years until its third-generation car goes into production.

We'll have a more detailed look at Tesla's battery technology shortly, along with some thoughts on its cost structure.

Meanwhile, you have to admire a CEO who can assess a situation and then cut his losses--let alone a reporter willing to report the words with which he's been chastised.


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