For only $98,000 plus tax, you can buy from Tesla Motors a gorgeous all-electric sports car (see photo) that goes from 0 to 60 in 4.4 seconds and can reach a top speed of 130 mph.
I'm not a fan of drag racing, or speeding. I'm not even convinced about electric cars—after all, pollution avoided in the tailpipe is just being replaced with pollution at the power plant. And I could never justify paying $100 K for this car when a gasoline luxury model sells for two-thirds less.
But that's not the point. Markets work to solve problems and create innovations. This expensive $100 K car will be copied and economies of scale will eventually make the technology available in the mass market for substantially less. Indeed, that is Tesla's stated objective.
What helps drive much innovation is of course the expectation of a financial pay-off. But Adam Smith was a bit more astute when he observed: ""It is not ease or pleasure, but always honour, of one kind or another, though frequently an honour very ill understood, that the ambitious man really pursues" (The Theory of Moral Sentiments, Liberty Fund, 1982, p. 65).
Exciting times are ahead, and it won't necessarily be the Fords and the GMs leading the way.