(GM) Government Motors...next stop Tesla

[Kratos]

http://www.environmentalleader.com/2...vernment-loan/

Tesla Charged About Possible Government Loan
Tesla Motors may be able to ramp up production of its electric cars if a $450 million government loan comes through as expected, the company’s chief executive officer indicated recently.

According to the San Jose Mercury News, in a newsletter to customers, CEO and chairman Elon Musk wrote, “I am excited to report that the Department of Energy informed Tesla last week that they expect to disburse funds … within four or five months.”

San Carlos, Calif.-based Tesla did not say its loan application had been approved. The San Jose Mercury News reported an Energy Department spokeswoman said the agency “has made no final decisions for specific applications for the auto-loan program.”

Tesla has requested $350 million toward retrofitting a factory to craft its Model S electric sedan and $100 million for making batteries.

Tesla has more than 1,000 customers on a waiting list for the $109,000 Tesla Roadster, a two-seat electric vehicle. Although only 200 roadsters have been produced thus far, Musk said it’s “highly likely” Tesla will become profitable by midyear, according to the article.

[Kratos]

http://www.gizmodo.com.au/2008/12/te...out_too-2.html

[Kratos]

There's No Way Tesla's Model S Will Cost $57,400
Jay Yarow|Apr. 29, 2009, 1:25 PM|17
PrintTags: Cars, Electric Cars, Energy, Tesla


Tesla's beautiful Model S is just a "glorified golf cart" right now writes the LA Times in a story that digs beneath the facade of Tesla's futuristic sedan, to reveal the car is still very far from being ready for primetime.

This lovely, porpoise-sleek design study, unveiled to worldwide hoopla March 26, is just barely ambulatory -- more like a glorified golf cart than a harbinger of tomorrow tech. The windows are fixed in their frames. The power-steering motor groans. The seating position and outward visibility make a Lamborghini feel spacious. The car's signature design flourish -- a 17-inch, touch-screen control panel with haptic feedback in the center console -- may not even make it to production, concedes Tesla designer Franz von Holzhausen. "The car is only about 90% there on the outside and about 40% there on the inside."

If the car is so far from production, it makes us wonder how Tesla arrives at its estimated sticker price of $57,400 for the sedan. We set out to figure out what it might cost to build one.

Mark Boyadjis, auto analyst at iSuppli, estimates that the large touch screen--that might get cut from the car, according to the LA Times--would cost $4,000.

We are told by an auto industry source that high-end automakers such as Maserati typically allow 28% of their revenue for distribution, which is paid to dealers and importers. If Tesla is as efficient as Maserati, 28% of $57,400 goes to its stores and marketing and sales costs. So that's $16,000 right there.

We're at $20,000 in cost now.

Now for some more technical mathy section, where a source who'd prefer to be nameless helps us out.

The 160-mile, low-end battery is 42 kWh battery storage system. Tesla plans on using battery technology from the Roadster for the Model S. Musk says those batteries cost $36,000 today. The Roadster battery is 53 kWh. So $36,000/53 kWh = $680/kWh. Now multiply that by 42 kWh and the battery for the Model S looks like it will cost $28,528.

Now, we're at $48,528 in cost. Subtract it from $57,400 and we're left with $8,872 to pay for the rest of the car and turn a profit.

This isn't a company that likes to pay it cheap either. The LA Times said, the body will be "aluminum or steel or a combination, but the Model S will have lightweight aluminum body panels. Tesla expects to make its own "hard tooling," which are expensive stamping molds for the body panels."

Throw in the cost of a chassis, seats, dashboard, power steering, you know, all the guts that makes up a car and its pretty tough to reconcile how this car will be profitable at $57,400 as Musk insists.

What could Tesla say to defend itself?

Its battery costs will come down. Maybe in the long run, but this isn't just about technology. It's about the actual packs themselves, which we're told are quite fixed in price, and quite expensive.

Tesla might say the marketing costs aren't that high. Again, tough to fathom, as the company plans on opening retail locations to sell its cars, rather than going through dealerships. This adds another cost. Below on the left is a picture of a Chicago location (via AutoBlogGreen) that will become Tesla's retail shop. On the right is its Los Angeles location. Is it going to be cheap to get the Chicago location to look like the Los Angeles location? We doubt it.

In spite of the car just being a "far-from-real fiberglass prototype" as the LA Times puts it, Tesla, and its inimitable CEO, Elon Musk, are on a full-fledged publicity tour to hype it up. Tonight, Musk will grace the Ed Sullivan Theatre to chat with David Letterman--a car geek, and a Roadster owner--about the Model S.

The full court press is part of a larger strategy to get the public, and by extension, the DOE on board with Tesla's plan. In doing so, the company could secure a loan from the government and stay in business.

We don't expect Letterman reads this blog, but if he does, we'd love to hear him ask Musk to explain how the Model S will be sold for $57,400 and be profitable.

http://www.businessinsider.com/there...ght-now-2009-4

[Kratos]

Tesla S: a model citizen

As I situate myself in the driver's seat of Tesla's Model S show car -- a working model of the future-chic, fast-backed electric sedan upon which the Silicon Valley automaker now depends -- I think of all the electric-car peaceniks who would gladly throttle me to take my place as the first person outside the company to drive the car. It's a pleasant thought.

Yet their envy would be misplaced. This lovely, porpoise-sleek design study, unveiled to worldwide hoopla March 26, is just barely ambulatory -- more like a glorified golf cart than a harbinger of tomorrow tech. The windows are fixed in their frames. The power-steering motor groans. The seating position and outward visibility make a Lamborghini feel spacious. The car's signature design flourish -- a 17-inch, touch-screen control panel with haptic feedback in the center console -- may not even make it to production, concedes Tesla designer Franz von Holzhausen. "The car is only about 90% there on the outside and about 40% there on the inside."



Photos: Tesla Model S electric carStill, the gimpy, far-from-real fiberglass prototype is pivotal for the company. It was, Holzhausen says, a "huge morale boost" for employees last fall, after the company suffered a round of layoffs and closed its Michigan office. More crucially, the Model S took center stage in early April when Tesla officials traveled to Washington to appeal for $450 million in government loans.

Tonight, company Chief Executive Elon Musk and the car will appear on "Late Night With David Letterman" (Letterman owns one of Tesla's Roadsters) as part of a cross-country barnstorming campaign to drum up public support for the car and the loans, with Tesla-hosted parties in Chicago, Miami and Seattle.

"People are interested in the Model S," says Tesla spokesman Rachel Konrad, "but they get much more excited when they see the car in person." The Tesla crew is hoping, she adds, that the parties will generate "a few qualified leads."

Tesla could go on even without the government loans, Von Holzhausen says, "but it would go on a lot slower."

Tesla's first car, the Roadster -- a six-figure sports car built on a Lotus chassis, as exotic as it is impractical -- proved that a proper electric road car can be built, if you start with a great car and throw buckets of money and batteries at it. And still, it wasn't easy. As of early April, only about 300 Roadsters had been delivered, with hundreds of deposit-paying customers still awaiting their cars. Musk has said he misjudged how difficult and expensive starting a car company would be.

The Model S, aimed to rival conventional mid-market sedans from BMW and Lexus, is a far more ambitious -- and some would say unlikely -- project.

A "clean screen" design, the Model S would be built in Tesla's own assembly hall (in an undetermined facility in Southern California). It would offer a choice of three progressively costly battery packs with ranges of about 165 miles, 230 miles and 300 miles; it would accelerate from zero to 60 mph in 5.6 seconds and would have a top speed of 125 mph; the base price of the car would be $57,400 ($49,900 if you count the federal tax credit on all-electric cars); it would offer seven-passenger seating (which seems impossible, given the size and layout of the prototype and the increasingly stringent federal rear-crash standards) and optional all-wheel drive; it would provide for quick replacement of its floor-mounted battery pack, a daunting technical challenge that would require that the pack be a load-bearing part of the structure. Tesla expects to build 20,000 vehicles in the first full year of production.

And all of this, Musk has said, will take place 24 and 30 months after the company receives the federal loans, an audacious timeline that makes many in the car industry roll their eyes. Even people inside Tesla are leery.

"Elon likes to portray all this as extraordinarily easy," says J.B. Straubel, Tesla's chief technical officer. "But there is certainly a lot of hard work between now and launch."

Tesla has already had to walk back a claim regarding the Model S' recharge capacity. The car will not have the capacity to accept 440-volt current, which would allow it to be charged in 45 minutes. Such a recharge cycle would have made it theoretically possible to drive the car continuously cross-country, stopping only briefly to plug in the car while passengers take meal breaks.

As for the production vehicle, this is what is known:

* Tesla is committed to using the same battery strategy as in the Roadster -- using large, liquid-cooled packs assembled out of off-the-shelf lithium-ion batteries, the so-called 18650-sized batteries. The packs will be somehow sandwiched in the floor of the vehicle. The quick-replacement design is problematic, said Straubel and Kurt Kelty, the company's director of energy storage systems, and is the subject of a lot of "deep thinking." Regardless, Tesla has no plans to invest in battery-swap infrastructure as part of the Model S' business plan.

* The body structure could be aluminum or steel or a combination, but the Model S will have lightweight aluminum body panels. Tesla expects to make its own "hard tooling," which are expensive stamping molds for the body panels. Although Straubel and Kelty declined to speculate, one possibility is that Tesla could align with Alcoa, the aluminum company, which works with Ferrari and other exotic-car makers to produce aluminum-bodied cars.

* Tesla is aiming for a 0.25 coefficient of drag, which would make the car very efficient aerodynamically. Ideally, the bottom of the car would slope up gradually toward the rear at a 7-degree angle, but the battery packs might interfere with that.

Even with the unknowns, Straubel says, the Model S benefits from all that has been learned from the Roadster program.

"The general DNA of the electric powertrain is much more proven," he says. Also, because of the cache of the Tesla brand, it has been much easier to get suppliers to work with the company in areas of testing and sourcing of materials.

"All of that stuff," Straubel says, "is in place."

http://www.latimes.com/business/la-f...7***226.column

[Kratos]

Just curious why we're throwing public capitol at this company, when the CEO himself says they don't need it to move forward.

The model S is nowhere near ready for production.
The roadster wasn't a complete car...just a battery and motor + some body work stuffed in a lotus chasis.

This company has no track record of production or bringing a car to market on cost or any develpment experience for a complete car.

Why not a public offering of debt rather then a public check from the tax payer?

[Kratos]

Tesla Motors stated in February 2009 that the current replacement cost of the ESS is slightly under USD$36,000, with an expected life span of 7 years/100,000 mi (160,000 km), and began offering owners an option to pre-purchase a battery replacement for USD$12,000 today with the replacement to be delivered after seven years. The ESS is expected to retain 70% capacity after 5 years and 50,000 miles (80,000 km) of driving (10,000 miles (16,000 km) driven each year).

So hmmm, even if you go with the cost effective pre buy battery option...
$12,000/$3.00 per gallon of gas = 4000 gallons of gas
4000 gallons * 25 miles per gallon = 100,000 miles you could drive in a gas powered car that gets 25 miles per gallon...

Same car...same performance
55k or 110k you decide
http://www.caranddriver.com/reviews/...eview/(page)/1
I can't imagine anyone buys the battery version Tesla, unless they have more money then brains.

[thegodfather]

Just curious why we're throwing public capitol at this company, when the CEO himself says they don't need it to move forward.

The model S is nowhere near ready for production.
The roadster wasn't a complete car...just a battery and motor + some body work stuffed in a lotus chasis.

This company has no track record of production or bringing a car to market on cost or any develpment experience for a complete car.

Why not a public offering of debt rather then a public check from the tax payer?

But Kratos......shouldn't people be willing to just pay more for an inefficient technology in the face of all logic and the laws of economics, in order to be more green and friendly to the environment. I mean, why should things like efficiency and cost effectiveness matter to people? We're saving the environment, one overpriced $109,000 dollar piece of shit at a time! (extreme sarcasm)

[Kratos]

The Obama administration should refrain from lavishing public money on losing propositions and let the entrepreneurs keep on tinkering.

[jfalco]

Kratos, I must say I 100% agree with you on this one. A big part of the problem with green technology is people keep getting hyped up about stuff that doesn't work.

If the cars actually worked, I would be all for the government investment. Seems to me like tesla has spent more time convincing people that they have a good idea than actually perfecting their idea.

I disagree with godfather's notion that free market economy and "laws of economics" will ever lead companies to produce green automobiles. The forces of a free market have prevented production of green cars for years, what is going to suddenly make it more profitable to not destroy the world.

[Kratos]

Well J, if the cars were actually a viable technology as a replacement for internal conbustion at an equal cost, they wouldn't need gvmt investment, would they? Private investors would be (and are) jumping on board.

You're too worried that the free market isn't advanced enough for where you want it to be. You can't will the free market, Rome wasn't built in a day.

The laws of economics in godfather's notion work everything out...it's a principal that's been around hundreds of years (read Adam Smith sometime instead of just excerpts from Karl Marx).

The free market doesn't stand in the way...rather gvmt is standing in the way of allowing the best technologies to emerge.

What will change you ask...well, for one, oil is something you pump out of the ground and it is possible to pump the last drop. There is something called peak oil...every year the world demands more and more oil and we pump at a faster and faster rate. Eventually some of the old wells can't pump anymore and the ability to find new wells outpaces the death of old wells. So eventually with a product that's demand in-elastic (people will continue to demand at a high rate even at a higher price) the price of oil will go quite high. Many oil experts think peak oil was reached years ago...the economic downturn was partly triggered by the rapid upward trend in oil. If the economy rebounds, the same amount of oil production won't be there anyway.

Battery development moves forward everyday, although to make them viable for large scale car applications you could make a case they are barking up the wrong tree as far as battery chemistry. So, the gvmt giving 100million to tesla to make LIon batteries better is a total flush down the toilet. Huge companies with tons of capital, and high stakes for profits for a potential breakthrough drive inovation forward everyday. Someone will build a better mouse trap as far as the batteries and the charging technology are concerned.

Forcing these cars on the road is a cost to our economy in opportunity production, capitol, and resources.
The world is going to burn oil as long as it's economically viable to do so, and there is nothing the US gvmt can do about it. It doesn't matter if we burn the last drop today or 25 years or 100 years later...if it gets bunred the cost to the enviroment is pretty much indifferent. The question is at what cost to the US economy for inefficency?

Further, I could argue you aren't even putting off burning up the oil. Decreased US dependence on oil keeps the price down and disincentivises developing economies like China and India from building industry to be oil independent (green). By using less oil, we keep it cheap for them for longer. The net result is only letting their economies leap frog (or catch) ours, while they dirty the enviroment for profit. Does it really matter on which side of the world we filthy up the earth?

Wind, Solar, and electric cars are nearly ready to be viable. But, forcing them to market is a waste of resources, and economically costly.

[jfalco]

Well stated.


Unfortunately we need to "build rome in a day" right now.


You seem to really want to give me an economics lesson. I undertsand everything you're saying, and I could argue your point for you if you wanted. I get it. You believe in a free market economy. If your only concern is money then I guess you're right.

[Kratos]

I think you do need the lesson though. It's not about my only concern being money. Out of the free market will come the best soloutions for the future via the "invisable hand."

Any attempt to control the will of the free market only results in inefficency. Leads to less resources for future development. I can promise you the public in China isn't spinning their wheels over CO2. They look at a car, then they look at their bicycle that they share with the rest of the village and think about how sweet it would be to own one...even if the thing emmited nuclear waste from the tail pipe. Wealth drives innovation and change in the market. Being pro free market and green are not at odds.

Don't forget China opens one new coal fired plant per week. Just so you know only 33% of U.S carbon dioxide emissions comes from the burning of gasoline in internal-combustion engines of cars and light trucks, about 40% of U.S. carbon dioxide emissions stem from the burning of fossil fuels for the purpose of electricity generation. Coal accounts for 93 percent of the emissions from the electric utility industry. Eighty percent of the world’s coal demand comes from China, according to the International Energy Agency, which advises industrialized nations on energy policy.

China is number uno, not the US
http://www.nytimes.com/2008/06/14/wo...a/14china.html

and is it even debatable they lead the US in gvmt intervention? What's good for the people of china in the people's republic is more energy. Until their economy grows, the will of the people and the greater good doesn't include being a good enviromental citizen.


Just because someone has more does not mean they are taking away from the rest. Lack of efficency takes away from everyone.
It may suck to live in the ghetto, when there are middle class and wealthy in this country...but if you eliminate the wealthy and middle class and now everyone lives in the ghetto did you help anyone? Such is the path of an inefficent economy based on intervention and across the board equality.