Tesla

[realFedUp]

A loan is a good thing especially
when it's paid back with interest
and especially when the loan helps
further technology.
In this case Tesla's being given
$365 million for production engineering
and assembly of the Model S,
an all-electric family sedan that
carries seven people and travels up to
300 miles per charge.

The Model S has an anticipated base
price of $49,900 after a $7,500
US federal tax credit.

So if you have that much money
to buy this car, it may
be a good thing for everyone.

Interesting footnote is that one
of the directors on the board is
Steve Westly, former California
Co-chair of Obama's campaign in
that state.

[tridim]

1. At 50k this car is for rich people.

Tell me again how that helps anyone except the Tesla CEO's bank account?

[el_bryanto]

2. Well most technology is expensive when first introduced

In theory if the car proves successful, it will continue to be worked on and eventually the price will come down.

Bryant

[tridim]

6. I hope that's the case

But so far I see no evidence that that's their goal. They're spending most of their money on high style and just using existing electric technology.

[Statistical]

3. Have to start somewhere.

Cellphones were once for rich people, so were computers, faxes, LCD TV, and even running water and electricity.
Hell even CARS at one time were for rich people, the middle class used a horse, and the poor walked.

Everything starts somewhere.

Tesla roadmap

2009: Tesla Roadster (sports car) $109,000
2011: Tesla Model S (sports sedan ala BMW 5 series) $49,000
2013: Tesla "Bluestar" (family sedan) $30,000

BTW The cEO is the guy who built paypal. Say what you like about paypal (some love it, some hate it) but the guy has knack for starting new companies and getting them mainstream.

[tridim]

5. Yea I know that research is a good thing..

But IMO Tesla Motors is going in the wrong direction. They seem divorced from the reality of current auto consumers.

We need high quality, safe, inexpensive, utilitarian electric vehicles, not sports cars with impressive 0-60mph numbers.

Dump the roadster and concentrate on Bluestar and smaller versions of Bluestar.

[Statistical]

7. Except they are a small company.

They can't sell a mainstream vehicle w/ mainstream magins yet. They have something like 17 dealerships. All maintenance must be done by their mechanics (mainly because EV are so rare). They need HIGH MARGIN products that give them the cash to build 100s of dealerships (not thousands like Ford/Toyota but at least a couple hundred).

Their plant currently can produce about 10,000 vehicles per year.
Eventually they want to sell 200,000 vehicles per year. But getting there is going to take a lot of profit/capital.

Sell a $20K vehicle w/ 5% margin = $1K profit * 10,000 vehicles = $1M profit per year. No company can survive on that.
Sell a $100K exotic vehicle w/ 20% margin = $20K profit * 10,000 vehicles = $20M.

Another thing to think about is recalls & fixes. The transmission wasn't ready when the Roadster launched. They locked the existing transmission into first gear and then sent a mechanic to replace it with the final single speed gearbox once it was ready (about 9 months later). How much did that cost per vehicle? $5,000? You cant do that on a commodity product.

They already have a roadmap to bluestar.

The expensive "toys" pay for that roadmap. Consider it a capitalistic redistribution of wealth. The larger price, large margin products subsidize the R&D that will lead to lower price vehicles.

Tesla is a private company. If they can prove that their model works they can go public and bring in billions in stock offering. Those billions will make the owners very wealthy BUT they also will give them the capital to someday have:
* thousands of trained mechanics
* 200-300 dealerships
* plants to build 4-5 different models and 200,000 - 300,000 vehicles per year.

[madokie]

8. How come so many can't see that is beyond me

[madokie]

4. If you can't see that on your own

I'm not so sure any amount of explaining will do any good. sorry