Mr Musk says he's hoping to make his current space rockets redundant with a new vehicle code named BFR.
The rocket will stand 100 metres tall with 31 engines to lift a payload of more than 4000 tons into space.
The rocket's interplanetary vehicle will be just 48 metres long and will feature 40 cabins, each capable of carrying three people.
He believes he could send the first two cargo ships to the red planet by 2022 with the first two crewed craft touching down just two years later.
Mr Musk said he expected to start construction of the first ship in 2018 and was "fairly confident" of being able to launch in about five years.
Mr Musk says the cost will be much cheaper than other launch vehicles with the added benefit that it can safely return to earth and be reused.
"It's really crazy that we build these sophisticated rockets and then crash them every time we fire," he said in a presentation to the International Astronautical Congress in Adelaide.
"It really shows how fundamental reusabilty is."
Mr Musk said he believed his program could be funded by the money his SpaceX company receives for launching satellites.
He said the BFR would also be able to service the International Space Station as well as establish human colonies on the moon and Mars.
The BFR will be able to travel to any destination on earth in under an hour, he announced on Twitter following his speech.
Later on Friday, Mr Musk will travel to Jamestown, in SA's mid north, where his Tesla company is building the battery which will play an integral part of the state's $550 million energy plan to avoid major blackouts and electricity shortages.
The battery is to be located next to a major wind farm and will be used to store power generated by the turbines that can be released into the network to ensure greater stability for the grid.
The Tesla boss previously made the bold promise to deliver the battery within 100 days or provide it for free.
He stood by that promise during his first visit to Adelaide earlier this year.
However it's understood the clock will not start ticking on the 100-day commitment until regulators approve the project, clearing it for grid connection.
Billionaire entrepreneur Elon Musk is back in Adelaide to deliver updates on two key projects - his plan for a mission to Mars and building the world's largest lithium-ion battery.
Mr Musk will speak first on Friday afternoon at the International Astronautical Congress where he'll detail his latest design for his SpaceX company's Interplanetary Transport System, the giant rocket and spaceship.
He has teased about the latest developments in recent days, releasing an Instagram video that shows a simulated launch and also tweeting that the "design feels right".
"This should be worth seeing," he said.
Later on Friday, Mr Musk will travel to Jamestown, in SA's mid north, where his Tesla company is building the battery which will play an integral part of the state's $550 million energy plan to avoid major blackouts and electricity shortages.
The battery is to be located next to a major wind farm and will be used to store power generated by the turbines that can be released into the network to ensure greater stability for the grid.
The Tesla boss previously made the bold promise to deliver the battery within 100 days or provide it for free.
He stood by that promise during his first visit to Adelaide earlier this year.
However it's understood the clock will not start ticking on the 100-day commitment until regulators approve the project, clearing it for grid connection.
