"Yeah, absolutely," Musk answered when asked if there's room at Tesla for "an even less expensive, quality electric car experience."
"That's something we can do...if we work really hard, I think maybe we can do that in three years," Musk said.
Musk admitted though that the auto industry "is super competitive," and discussed economies of scale in comparison to industry rivals.
The interview was conducted with a popular Youtube personality, Marques Brownlee.
Elon Musk said in a YouTube interview published on Friday that Tesla could one day produce an electric car that will sell for $25,000, but that it would probably take three years to make it happen.
The interview, which took place with popular YouTube personality, Marques Brownlee, on Wednesday, August 15 at Tesla's Fremont Factory, was published online by Brownlee on Friday, August 17.
In the first part of the interview, Musk was asked directly by Brownlee if there is room at Tesla for an even less expensive, quality electric car experience.
"Yeah, absolutely," Musk answered.
"I think in order for us to get up to...a 25,000 car, that's something we can do," he said. "If we work really hard, I think maybe we can do that in three years."
He added that design and technology improvements are the keys to affordability, but that scale of production plays an important role as well. He compared cars to the development of cell phones, noting that "no amount of money, no amount of scale could have made" early cell phones affordable without technology improvements, but noted that with each successive model the phones became "better and cheaper."
During the interview, the Tesla CEO said that his company's smaller production scale makes it difficult to compete with rivals, such as General Motors and Ford.
"We're really focused on trying to make the cars more affordable, which is really tough," he said. "Like in order to make the cars affordable you really need high volume. So you need economies of scale. And because the other car companies make a lot more cars than we do, they've got way better economies of scale. So as we're gradually able to build up and do more cars, higher volume, then we can...make the cars available to a wide range of people."
Musk at one point paused and conceded the difficulty of working in the auto industry.
"The car industry is super competitive," he said. "It's like one of the...it's like insanely competitive."
This is not the first revealing interview Musk has been featured in the past week. On Friday, the New York Times published an exclusive interview where Musk admitted, "this past year has been the most painful of my career," and choked up multiple times while discussing personal and professional pressures.
Musk set off a major controversy on August 7 when he tweeted he was considering taking Tesla private at $420 a share and that he had "funding secured." The Securities and Exchange Commission has opened up an investigation and both Musk and Tesla's board of directors have received SEC subpoenas.
In his interview with Brownlee, Musk appeared more at ease, joking, laughing, and telling anecdotes.
"I actually even pay full retail price for my cars," he admitted.
As of Monday morning, the video has already garnered 3.3 million views.