Tesla's Roadster Sport - a 2-seat sports car priced at $100,000 (Photo courtesy of Tesla Motors)
If you want a clean electric vehicle to cruise the highway today, you really only have one option – a small, Silicon Valley company named Tesla. Tesla has plans to be a big player in the auto industry, but so far the company has only built a few hundred cars. Dustin Dwyer looks at whether Tesla can make it in one of the toughest industries around:
Transcript
If you want a clean electric vehicle to cruise the highway today, you really only have one option – a small, Silicon Valley company named Tesla. Tesla has plans to be a big player in the auto industry, but so far the company has only built a few hundred cars. Dustin Dwyer looks at whether Tesla can make it in one of the toughest industries around:
If you’re trying to get attention for a new vehicle, a big auto show is one of the best places to get it.
And even this year, as GM and Chrysler hobbled into the Detroit auto show on federal life support, and all carmakers scaled back, there was still a lot of hype.
Here’s GM’s introduction for the Chevy Volt.
“Ladies and gentlemen, the future of automotive transportation has entered the building.”
That’s how the big players make their announcements.
Tesla is not a big player.
CEO Elon Musk made his big announcement in a hotel conference room in front of a bunch of geeky auto analysts.
“A big announcement that I’ve just gotten this morning permission this morning to make is, um” (takes drink)
Here he takes a drink of his water.
“…that Daimler has given us permission to acknowledge that they are the automotive partner that we’re working with.”
That means Tesla is going to help make an electric version of Daimler’s tiny Smart Car.
Musk is not much of a salesman. But maybe he doesn’t have to be. While all the big carmakers are seeing huge sales drops, Musk says Tesla sales keep going up.
“And, well, actually we can’t produce them fast enough and we’re sold out through November of this year.”
Now, Tesla – at most – makes 30 vehicles a week. And its only car, a sporty roadster, sells for more than $100,000.
A company like GM sells thousands of cars a week, and people who aren’t movie stars can actually afford some of them.
But Musk says he wants Tesla to be more than just a small time player.
So now the company is working on a four-door sedan that will sell for about $50,000 – still pricey for most of us, but half the price of its two-seat roadster.
Here’s the thing though, right now, Tesla has the electric vehicle market all to itself. But all the big companies are working on their own electric cars.
So when Tesla comes out with its four-door sedan, the competition will be much tougher.
Michael Robinet is an auto industry analyst with the firm CSM Worldwide. He says Tesla’s small size is a problem.
“Economies of scale is one of the main drivers of this industry to get cost out of the vehicle and be competitive. And that’s where the major vehicle manufacturers are going to have a leg up in the future.”
Some who follow the auto industry think Tesla’s future could be as more of a partner to existing companies, like what Tesla is doing with Daimler.
But Elon Musk insists Tesla will continue to make its own cars. And it can succeed.
“You go through sort of stages of denial, I guess. You know, when we first said we’d make this car, people said you can’t make this car. It’s not going to work, the technology’s not going to work, and even if the technology works, nobody’s gonna buy the damn thing. And we’ve shown, hey, we can make the technology work and people really want to buy it. So, okay, then they go to the next stage, ‘Oh, well, sure, okay, people will buy that car, but they won’t buy a sedan.’”
Tesla plans to unveil the new sedan later this month (March 26). The car is expected to go on sale in 2011.
In the meantime, Tesla has not been completely immune to all the problems facing the auto industry. Tesla had trouble raising money last year to finance the new sedan. So it turned to the federal government for a 350 million dollar loan.
At least in that one sense, Tesla is already acting like a major player.
For The Environment Report, I’m Dustin Dwyer.