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comment by mk

To split hairs, Musk doesn't argue that electric is more efficient, but ICE must go the efficiency route, and there are diminishing returns.

Electric motors don't necessarily have to be more efficient to be a better choice. In fact, the extra conversion step can actually be an advantage. For example, electric allows for multiple energy inputs so they could technically use the most attractive (clean and/or abundant) source available (solar in Arizona, geothermal in Iceland, natural gas in South Dakota, etc.) to produce electricity, whereas gasoline must come from oil, and it must be refined and shipped.