Tesla tidbits: new retail stores, Model S prototype, extended warranty
By Darren Murph 
posted Feb 11th 2009 7:44PM
posted Feb 11th 2009 7:44PM
Tesla to be Profitable by Mid Year
The $40M financing round completed in December was twice the amount Tesla needed to reach profitability. Moving forward two months later, we remain on track with our cost reductions and production ramp, so it appears highly likely that Tesla will meet the goal promised to those investors of becoming profitable by mid year.
The main reason for this confidence is that Tesla is already in the fortunate position of being sold out until early November, something few automakers can claim, and will soon be sold out of all 2009 production. While we have had some cancellations due to buyers experiencing personal financial difficulties, new orders continue to flow in every week from the United States and Europe. We have now produced more than 200 Roadsters for customers and there are more than 1,000 customers still awaiting delivery.
Due to our order backlog, it seems that owning a Roadster can be a good investment. Last September, as the financial and real estate markets began crashing, a Roadster was sold at the Sonoma Paradiso in California wine country for $160,000, well above the current list price of $109,000. Many Roadster owners who have taken delivery of their cars have already decided to purchase a second Roadster or Roadster Sport because they like the first one so much.
The continued strong demand is driven by the fact that the Tesla Roadster has no direct competitors. It is faster than almost any sports car on the market (our Roadster beat a Porsche GT3 on the Top Gear test track) and yet uses less energy and has a smaller carbon footprint than a Toyota Prius, even if you assume the worst possible case where all electricity comes from coal.
I expect sales demand to strengthen further as this awareness grows. After all, what's the point of driving another exotic sports car when it is slower than a Tesla and damages the environment? Already, the Tesla Roadster is the car of choice among the technology, business and Hollywood A lists – this year's Academy Awards will be a lineup of Teslas – and we have never had to give a discount to anyone.
Many customers also appreciate the fact that profit from their purchase goes towards helping Tesla develop more affordable, mass market electric cars. The same cannot be said for those who buy gas-guzzling sports cars from other automakers.
And owners aren't the only ones impressed with the Roadster. Road & Track was the first auto enthusiast magazine to perform third-party, instrumented testing on the Roadster; they were "pleased to see its extravagant claims confirmed." The Washington Post's Warren Brown gushed, "Wheeeeeee! If this is the future of the automobile, I want it." Dan Neil of the Los Angeles Times had perhaps the most colorful description we've seen to describe the Roadster's scorching acceleration: "God has grabbed me by the jockstrap and fired me off his thumb, rubber band-style. Wow." And we've also had a torrent of reviews in Europe, where deliveries begin this summer – including a Le Monde story with our favorite headline: "Le chic électrique."
Unveiling the Model S and DOE funding
On March 26th, at the Tesla design studio located within the SpaceX rocket factory, we will unveil a street-drivable prototype of the Model S four door sedan. Our objective with the Model S was to create one of the most functional, intuitive and beautiful vehicles on the road. Tesla Roadster customers and select VIPs invited to the event will have an opportunity to judge for themselves firsthand whether we have succeeded.
Regarding funding, I am excited to report that the Department of Energy informed Tesla last week that they expect to disburse funds from our $350M Model S loan application within four to five months. The Obama administration has thankfully made it a top priority to move quickly on the Advanced Technology Vehicles Manufacturing loan program, as this will both generate high quality jobs in the near term and lay the groundwork for a better environment in the future.
This will keep us on track for production to start in 2011. As a gesture of gratitude for their early support, Roadster owners will receive a $10,000 discount off the price of the Model S Signature series and automatically be first in line for the sedan.
Daimler Partnership
We announced last month at the Detroit auto show that we have been working with Daimler (maker of Mercedes) for over a year to create an electric version of the Smart car. Daimler has contracted with Tesla to build the battery packs and chargers for an initial run of 1,000 cars. Pending the results of that test fleet, the relationship could expand to tens of thousands of cars per year.
This is a very significant endorsement of both Tesla's technology and our financial strength by one of the world's most respected automotive companies. Daimler would not feel comfortable depending on us for this program if they felt that either our technology was easily replicated or that we were in financial danger.
Daimler was the first company to commercialize the internal combustion engine and has become a benchmark for automotive quality and reliability. It is an honor that they chose to work with Tesla after a thorough investigation of other options. The deal is likely to be the first in a series of strategic partnerships between Tesla and other auto manufacturers to engineer and produce electric cars.
My goal for Tesla from the beginning was to do whatever we can to help end the world's addiction to oil. We'll do that by making cars directly, helping other automakers develop cars, and serving as an example to the rest of the industry. Although the Roadster is still the only highway capable production electric car for sale in the United States, it was very encouraging to see that the central theme of the Detroit auto show this year was electric transportation. J
New Tesla Sales & Service Centers to Open
We have reached agreement on Tesla store leases in Chicago and London's Knightsbridge district, and we are close to finalizing locations in Manhattan, Miami, Seattle and Munich. All six facilities will open this year, and in the following months we'll provide details about individual store opening parties. These new stores will offer prospective customers the chance to see and drive the Roadster in person – and they underscore Tesla's commitment to looking at the auto industry with fresh eyes. Unlike traditional franchise dealerships, Tesla owns its stores and controls the customer experience. We think you'll agree that our stores are a refreshing change from the way most people have bought cars for the last 50 years.
Roadster Sport
Tesla is now taking orders for the Roadster Sport, an even higher performance car that does 0 to 60 mph in 3.7 seconds. It comes with a hand-wound stator and increased winding density for lower resistance and higher peak torque.
The tires are upgraded to Yokohama Ultra High Performance and the suspension features adjustable dampers and anti-roll bars tuned to the driver's preference – allowing for both softer and firmer rides than the standard Roadster. Deliveries are expected to begin in late June.
Upgraded Roadster Interior and Other Options
Tesla will soon offer an Executive Leather Interior that raises the level of luxury in the Roadster's cabin. We are also offering a Clear Carbon Fiber Exterior Package to add an additional level of sportiness and highlight the lightweight material that makes up the Roadster's body. Currently, the only exterior clear carbon fiber touch on the base model is the roll bar cover – but many customers and fans have asked if we could reveal more of this exotic, braided material. These packages will be available starting in June.
Battery Replacement Program
One of the top questions customers ask about the Roadster is, "How long will the battery last and what will it cost to replace?" Tesla engineers have determined that a Tesla battery pack should last approximately seven years or over 100,000 miles under normal use.
Customers may pay $12,000, €10,000 or £9,000 up front and in return receive a replacement battery pack after seven years. Customers will also have the option of replacing the pack earlier at a premium or later for a partial refund. With the low production volume of the Tesla Roadster, the current replacement price of the pack is almost three times that number. The main reason for the relatively low cost up front -- and why this is a smart purchase -- is that we are arbitraging the relative cost of capital between Tesla and our typical customer.
Extended Warranty to Double Standard Period
Many customers have also asked to purchase an extended warranty. We now offer a doubling of the standard warranty, which means an additional 3 years and 36,000 miles or 60,000 kilometers, for $5,000, €4,000 or £3,800.
This covers everything on the car except the battery pack. Should the motor, power electronics, HVAC or any other major system need to be replaced, this will be money well spent, and it provides peace of mind to many customers.
Thanks for your support!
-- Elon --
I wish I had money.
I wish I had enough money to buy an expensive, hyper-exotic, and impractically delayed electric supercar to park next to my 8 MPG Lamborghini Murcelagio, Porsche 911 GTS, and Bentley Continental GT.
Even better, I wish I was rich enough to purchase a car that our (arguably-insane) government will gladly subsidize with wheelbarrows of DOE money and $10,000 off the purchase of every vehicle... Sounds about right...
Oh, did we mention it beats a beat a Porsche GT3 on the Top Gear test track?
Pfft. What arrogance. Insane.
Nerdtalker,
None of your post makes any sense except for the "expensive" part.
@nerdtalker
there is no 911 gts. you're probably thinking of the GT2 or GT3RS.
just sayin.
I wouldn't buy one of these either.
It screams "Look at me! I matter because I care about something"
This company should go the way of XM and Sirius. BYE BYE!
Engadget needs to make one of these a "recession prize"
If an exploding laptop battery can kill a chinaman than I'd assume a battery in a Tesla could take out a block.
Yeah, except, didn't happen. He had some sort of homemade gun in his possession.
"chinaman" ???!!!
it's 2009
I'm excited to see what the Model S is going to look/cost like. Does anyone know if some spy shots or leaked photos has been released?
I'm guessing it will be rather Evora-like
not to be lame (too late), but should be 'imminent' in first para. immanent = a philosophical/religious term.
I don't know about Model S - but there has been huge buzz about the Model T - the successor to the Model S...
Here are some spy shot...
Sorry, was trying to reply to you - I don't know about the Model S - but they've already released info about the Model T
http://www.theweeklydriver.com/content_images/2/modelt1.jpg
http://www.speedace.info/automotive_directory/car_images/ford_model_t_henry.jpg
if you're going to be an idiot and post fake pics. please try to reupload the image next time so that the URL doesn't say FORD model T in it.
yours truly,
a concerned citizen.
@suprxtragrav - I guess you are the idiot because you missed the joke. Model T is an old ass car - maybe over 100 years old. The joke, if you need it spelled out, is the name of this car from Tesla is "Model S" - logic would dictate that in an evolution of cars with model names like that would progress to another Model - perhaps "Model T". If you have checked your alphabet recently you would see that "T" follows "S". Which is why the joke read : I don't know about the Model S - but they've already released info about the Model T.
I hope in the future you can understand jokes and not go spouting off like some 5 year old and calling the pics "Fake" - because they obviously aren't fake. It wasn't an attempt to fool anyone - anyone that knows ANYTHING about Cars knows that one of the first mass produced cars was the model T.
Damn. You must be fun at parties - you can really suck the life out of the place. Do all your friends have to sit around and explain jokes to you?
Balls! The battery pack on this thing costs about as much as most are expecting to see for an entire Chevy Volt, $36,000!
Tesla seriously needs to make it a hybrid car. Solar panels or a fuel cell stack that could keep the battery charged. I saw it on Top Gear and it was rather missing the point of being a clean and green sportscar.
When you plug it in your electricity socket, the energy is coming from a power station which is polluting in some way or the other. And there is also a good amount of transfer and storage loss.
Yes, the pollutants are only being released near the Power Plant, not everywhere the car goes, so it IS cleaner. Not sure about Energy efficient though
Why do we need another company making another hybrid car?
You realize that gas engines and transmissions and such are heavy, right? It's not like they could hybridize the Tesla without major drawbacks.
A Chicago store would be awesome! Put it across the street from the Bently/ Lambo/ Ferrari dealership on Rush. Put a Lotus lot there too and it'd be heaven. One stop drool shop!
FTW!
Oh, and... Will It Blend?
Tesla needs to make their electric cars compatible with the upcoming Better Place system of recharging stations and especially of battery exchange stations.
How hard could it be simply for Tesla to use a compatible electric battery exchange system?
heh its the Tesla on Santa Monica Blvd. I have yet to step inside there.
Tesla just had to do everything possible to make sure Kama Sura or teva is at the end of the line.... Come on now... just cuz the guy worked for u doesn't mean he should invent on his own... :P