For those who doubted Tesla's ability to turn a profit, this is my anecdote. I used to be one of you. Selling an absurdly priced boutique sports car that can only run 250 miles did not seem like a viable business strategy. The battery packs had their issues. The range was terrible. The car was tiny and cramped, even smaller than some small sports cars.
And then I chanced upon a LivingSocial deal that let me drive a Roadster S for a day. For the record, I've driven a handful of supercars and more than my share of regular sports cars. I have almost never felt what I did in the Tesla (with the exception of the Gallardo), mainly because of the instant thrust available at any RPM. It was not like anything I ever felt before. As I drove, I felt inexplicably that this was the car of the future -- as a tech aficionado, I was finally driving a car that felt like the future. The lack of an engine roar was strangely soothing (and I LOVE engine roars!). The pickup meant that I could smoke most Maseratis on the 0-60. The thrill of pressing down on the accelerator and feeling the thrust in your chest was unparalleled (again, with the exception of the Gallardo). As I drove past clubs in San Francisco with their Porsches and Bentleys outside, I felt above it all in my tiny all-electric sports car. They were stupid flash-mongers; I was one with my machine. There is something pure and beautiful about driving a Tesla Roadster, well beyond the gas-free aspect. This was the thoroughly impractical car that my inner child always wanted from the future.
It thrilled me to drive that car in a way that I cannot fully describe. I am an eminently rational man. I have children, and am not prone to being wild and reckless. But now, as a result of driving that beautiful machine, as soon as my GOOG stocks vest, I will be driving down to Menlo Park, CA with my checkbook in hand to drive out with a Roadster.
That, dear friends, is how Tesla will turn a profit, in the face of ridiculous product shortcomings like range. They enchant, and they delight, and because of that I will gladly open my pocketbook for Elon Musk.
I'm skeptical about Tesla's future, but not because I doubt their product. The Roadster was an amazing, unique vehicle that wasn't priced so high it was unattainable, at least to the moderately wealthy. There are plenty of Mercedes on the road that approach the Roadster's price. I'm skeptical because they weren't able to turn a profit on the Roadster. As far as I can tell, they sold each one for a loss and even then weren't able to produce enough to meet demand.
I have no doubt that the sedan will be an amazing, unique vehicle, but Tesla still has to prove itself at the nuts-and-bolts of the auto business: manufacturing, retailing, and service.
I was under the impression that the roadster was more about developing and perfecting the tech rather than immediately scaling up production. As redwood noted, the sedan is leading into the mass production phase.
> Because mass production generally leads to decreased costs, which has the potential for profit from initial loss on sales.
Reread the original "As far as I can tell, they sold each one for a loss and even then weren't able to produce enough to meet demand." That assumes that they could have made and sold more but choose not to.
Maybe that would have led to lower price and profit, but if it wasn't going to, selling more is a bad idea.
>Selling an absurdly priced boutique sports car that can only run 250 miles
I drive a Jeep Liberty V6. I fill the tank at around $70 (Chicago) and I get a 187 mile range with all my city driving. I'm not sure why people think a 250 mile range is short. I'm not even getting that now.
> The lack of an engine roar was strangely soothing (and I LOVE engine roars!).
Honestly, they sound like giant RC cars to me. There's this great electric "roar" for lack of a better term. I agree, it does sound like the future.
I live about 2 miles from the Tesla dealership here. I've never driven one, but I've watched others drive them. From what I can tell these things have tons of power and are a lot of fun. Kudos to the Tesla team!
I think the difference is that you can just drive down to the station and fill up, but unless you have Tesla's expensive high-voltage charger, you're looking at several hours plugged into a standard wall outlet to recharge the Roadster.
I'm with you, but I sleep 8 hours a night. I'm generally home 12 hours at a minimum. If the car charges in less than 6 hours, it's doable.
250 mile daily limit is pretty good, that's 6+ hours of driving at average city speed limits.
Personally if I'm taking a trip, I'd likely get a rental and put the miles and liability on someone else. I wouldn't like to be driving my own vehicle with my own guests doing a trip from Ontario to Florida or PEI and blow a tire, or worse and it land on my insurance. I like the fact that I can sue the car rental company for up to $10 million, when I can only sue my own insurance for up to $1 million.
You don't need a pick-up truck, just because you might need to move some furniture every few months. You don't need a car with a long range, just because you might want to go on a road trip once a year. You can rent.
I grew up about 100 miles from the nearest decent-sized city. You couldn't use a Tesla there, because you couldn't head to the city every time you got bored and had a spare day (well, technically you could, but you wouldn't want to cut things too fine). But if you live in a big city, and are unlikely to go on long trips more than a few times a year, electric would be fine.
The 230 and 300 mile Teslas are perfect for large metro area use (like SFBA, metro Seattle, LA, etc.).
I still think most people buying $50-70k cars in general, and especially Teslas, are likely to actually own another car (either in a 2-car 2-driver household, or just by keeping their gas/diesel and augmenting it with a Tesla), vs. renting. It might depend on garage space more than anything.
It's not a general-purpose car, though. It was clearly intended as an extra toy for those with the money to spend on such things, so these sort of objections kinda miss the point.
No, you're not going to drive cross country with it. But it's still pretty cool.
To counter your anecdote with another, a good friend who is weekend racing his Boxster at Laguna Seca was seriously considering buying a Tesla Roadster. But when he dug deeper, he found out that the Tesla can only be driven at full speed for a very short amount of time. After that, the battery temperature gets so high that the car switches into 'crawl mode' until the battery has cooled down again.
You have the full torque of the motor from a dead stop, with no power band and clutch to deal with. Your right foot really is an "accelerator" rather than a "throttle", and it honestly does transform the driving experience
Making an amazing product doesn't always lead to turning a profit, especially in a business with as high fixed costs as the automotive industry. Note the many financial plagues of high-end automakers like Lamborghini/Bugatti/etc.
I think the Model S is a good step along the way to profitability -- a broader-market car that can help amortize more of the fixed costs.
Thank you for sharing your experiences. I am also a car enthusiast.
Have you driven an Ariel Atom [1]? Granted, it is less practical than the Tesla Roadster; however, the cost is considerably less, and you could easily afford a secondary car to supplement it.
"This is driving nirvana. You can forget anything you've ever driven. Anything. There is no car, nothing on four wheels, that's as fast as this. Nothing." [2]
The roadster is a NVH nightmare though. Any idiot can build a sports car, but it is a real challenge to build a luxury vehicle. Luxury cars and economy cars are both an order of magnitude harder than sports cars from an engineering perspective. People will forgive rattles, wind noise, and steering nibble in a $100k+ sports car, but not in a $60k luxury car.
The real test will be if they can sell the product to buyers who aren't already sold on the concept.
:) It's not rational. You should try to get in one. There's a site called HiGear that will let you drive a Roadster for $500 a day. It's steep, and you only get about 100 miles, but it's an experience that words can't fully describe.
Rationality is about how to achieve what you want, not about what you should want. If it makes you happy, and you believe that it will continue to make you happy enough that you're willing to pay for it, then that is rational.
I had the same experience - I rode in one with a friend who's a pretty aggressive driver, and I've never felt anything quite like it, except at theme parks. The acceleration seems almost instantaneous, the handling was incredible. I felt like Jeremy Clarkson sounded in the Atom, but in a real car.
When I found out that the Model S sport would be about as quick as the BMW M5, and the reports of ride quality were quite good, I dumped a good amount of money into the stock. If they can ramp up the production like they say, and there aren't any unforeseen delays, nothing else will be able to touch a Model S in that price range.
Just a quick little note: They've stopped production on the Roadster, so you won't be able to pick one up so easily. You'll probably be looking at a Model S with availability in 2013.
Yes, the Roadster is amazing. However, there's about 20 left in the US to sell. I drove one, but cannot buy one. Completely agree that it is thrilling, like riding a roller coaster, with you in control.
Disclaimer: After driving it, I did buy some TSLA stock.
Just checking - you have already ridden sport bikes, yes? I mean, you could get similar thrills - and more, of a different kind - for a whole lot less, if you're so inclined.
I really hope that Tesla can actually become a profitable company, because it's time we had some real innovation in terms of car technology. I'm not a car buff or an environmental buff, but having a real zero-emissions car that will help get rid of our dependence on oil just makes sense.
However, can any experts educate me on the status of the Li-ion battery? My understanding is that Li-ion batteries lose 30% of their capacity over 2-3 years. So what does that mean for the range of the Tesla cars? My Honda Accord lasted 11 years and 200k miles, it doesn't sound like Teslas have nearly the same durability and range. Is this a ticking time bomb, or is there a solution to this?
6500 sales is actually pretty significant. By way of comparison the Nissan Leaf (which is much cheaper) has only sold 7217 cars in North America since launching in Dec 2010.
To be fair though, Nissan originally had 17,000 pre-orders but had trouble filling them due to production issues. It remains to be seen if Tesla can actually deliver their first run, but let's hope that Tesla is able to get some magic done in that NUMMI plant.
Saw a leaf for the fist time up close yesterday. Damn it's ugly. They could really murder sales with a Deiter Rams/Johnny Ive aesthetic design instead of this fake space age plastic crap they cover the car with.
I can never understand why car companies put out such ugly cars. Is there such a huge price difference between making a decent looking car and an ugly car that they have sacrifice design? Or does someone at nissan actually thinks it looks "space age".
I don't have the research on hand, but it's generally accepted that the reason the Prius was so successful as a hybrid was because it LOOKED very different than other hybrids, so people who bought one could conspicuously show off that they were hybrid drivers before it was cool.
Models like the Honda Hybrid Accord and Civic didn't do nearly as well because aside from the badge and carpool sticker, they didn't scream "I'M A HYBRID LOOK AT ME SAVING THE WORLD"
My hunch is that the Leaf was an attempt to capture some of that "conspicuous hybridization" momentum. Agreed, though, it's an ugly car.
Yeah, they made a really strange decision with the way the headlights pop up 4 inches or so above the hood.
I recall hearing somewhere that Nissan did for aerodynamic reasons to make sure the slipstream goes over the side-view mirrors, but boy does it look ugly. As an engineer, I usually never find myself arguing in favor of aesthetics over effectiveness, but in this case even I think they should have done something different.
That said, I'm not a car designer, so there might be other factors going on there.
Yeah, I believe the issue was that the car is so quiet that at highway speeds, the noise generated from hitting the side mirrors was annoying. So they shaped the front of the car to mitigate that issue.
I've driven one a few times. It's ugly, but not more ugly than a lot of other econo-cars like the Fuse. I'm tall and it's fairly comfortable inside, and it performs fine.
If I was still a daily driving commuter and still had two cars in the household, I'd definitely be interested in the Leaf because it would save me $250 in gas a month and let me drive in the carpool lane.
I kinda like the way it looks, but mostly because it looks different. Some of these designs that most people think are ugly at first tend to grow on you, like the Nissan cube.
Are they really "sold out"? An employee told me they pre-sold 6,600ish, but i believe this includes people who reserved the cars with a $5K deposit, those who prepaid the entire amount, and those who out down a $40K deposit for the signature model.
Personally my allocation number is the 4,XXX range, I put down the $5k deposit and have yet to truly decide if I'm going to buy it, but I suppose it also presents and opportunity to flip the spot to the guy who has to have it now. I went to he factory event a few weeks back and it was a pretty wide demographic.
I visited the Tesla store recently, and I can definitely see why it's sold out--the car is gorgeous, it has a 17" touchscreen in place of the dash and, in some ways, it's actually more practical than a comparable normal sedan (it has storage space in the front and the back, for example).
Especially for people who do not drive long distances too often, this really is a great car to have. I would definitely see getting one of these over a 5 series or the like; for daily use, you wouldn't be sacrificing quality by going electric.
In all honesty that's an idiotic trend that I hope ends soon. Touchscreens (especially ones with menus) are impossible to navigate without taking your eyes off the road. In my old Toyota Echo I could find every control (and its state) by feel alone.
Now, if they added tactile feedback to the touchscreen (say vibrations as you moved over controls on the screen, and requiring force to "click") and got rid of menus, at least that'd be usable (if not still silly).
...That said I'd still buy the car if I had that kind of disposable income.
Damn, the carrot I was dangling over my head for a breakout success over the next 12 months has been a model S. Now I need a new carrot. The Leaf's not all that carroty.
The Enertia is out -- when getting married, to close the deal, I had to agree to never get another motorcycle. But she didn't think to rule out submarines!
They've certainly sorted out the website since I last looked, and the gallery makes it look a properly desirable supercar. There are a couple of videos on youtube, and a prototype out and about. Brilliant.
An electric car talking about a 90% charge in 10 minutes, and looking less like vapourware than ever. (If only I had a spare £150,000).
It's just the first year of production that's sold out... not the entire model. So, you have until 2013 for your breakout success. (At least, I hope that's what they mean... I'm using the same carrot)
selling out the inventory is not that hard when the volume is this low + the price is pretty low to make it affordable to a lot more people than the roadster
And then I chanced upon a LivingSocial deal that let me drive a Roadster S for a day. For the record, I've driven a handful of supercars and more than my share of regular sports cars. I have almost never felt what I did in the Tesla (with the exception of the Gallardo), mainly because of the instant thrust available at any RPM. It was not like anything I ever felt before. As I drove, I felt inexplicably that this was the car of the future -- as a tech aficionado, I was finally driving a car that felt like the future. The lack of an engine roar was strangely soothing (and I LOVE engine roars!). The pickup meant that I could smoke most Maseratis on the 0-60. The thrill of pressing down on the accelerator and feeling the thrust in your chest was unparalleled (again, with the exception of the Gallardo). As I drove past clubs in San Francisco with their Porsches and Bentleys outside, I felt above it all in my tiny all-electric sports car. They were stupid flash-mongers; I was one with my machine. There is something pure and beautiful about driving a Tesla Roadster, well beyond the gas-free aspect. This was the thoroughly impractical car that my inner child always wanted from the future.
It thrilled me to drive that car in a way that I cannot fully describe. I am an eminently rational man. I have children, and am not prone to being wild and reckless. But now, as a result of driving that beautiful machine, as soon as my GOOG stocks vest, I will be driving down to Menlo Park, CA with my checkbook in hand to drive out with a Roadster.
That, dear friends, is how Tesla will turn a profit, in the face of ridiculous product shortcomings like range. They enchant, and they delight, and because of that I will gladly open my pocketbook for Elon Musk.