Archives for June 21st, 2013
Electric car purveyor Tesla filed paperwork for a $100 million IPO with the SEC earlier today, and after deeper perusal of the 173-page form S – 1, the company looks to be treading on extremely thin ice. The filing has revealed that not only will the company stop making its only car — the Lotus Elise-based Roadster — in 2011 because Lotus will be retooling its plant to make way for a new Elise/Exige line, but also that it has no solid agreements in place for further development or procurement of electric powertrain components with third-party suppliers. While the company hopes to have a new Roadster on the road by 2013, the discontinuation of the present car means Tesla would have no vehicle to sell for the better part of two years — unless of course its proposed Model S sedan magically appears in 2012.
The filing — specifically, the 39-page-long “Risk Factors” section — makes Tesla’s entire operation look quite shaky as it includes far more than the usual warnings about outside factors that could affect a company’s business.
It’s no secret that the future of the company rides on the success of the Model S and Tesla says that it already has 2000 orders. However, 2012 is less than two years away and the company still does not have a way of actually building the sedan. In fact, the company lists 11 assumptions that it’s operating under with regards to the launch of the Model S:
that we will be able to identify and secure an appropriate facility for the manufacturing of our Model S;
that we will be able to secure the funding necessary to build out and equip the manufacturing facilities in a timely manner, including meeting milestones and other conditions necessary to draw down funds under our loan facility with the DOE;
that we will able to develop and equip the manufacturing facilities for the Model S without exceeding our projected costs and on our projected timeline;
that the equipment we select will be able to accurately manufacture the vehicle within specified design tolerances;
that our computer aided design process can reduce the product development time by accurately predicting the performance of our vehicle for passing relevant safety standards, including standards that can only be met through expensive crash testing;
that we will be able to obtain the necessary permits and approvals, including those under the California Environmental Quality Act and the National Environmental Policy Act, as well as building and air quality permits, to comply with local zoning, environmental and similar regulations to operate our manufacturing facilities and our business on our projected timeline;
that we will be able to engage suppliers for the necessary components on terms and conditions acceptable to us and that we will be able to obtain components on a timely basis and in the necessary quantities;
that we will be able to deliver final component designs to our suppliers in a timely manner;
that we will be able to attract, recruit, hire and train skilled employees, including employees on the production line, to operate our Model S manufacturing facility;
that we will be able to maintain high quality controls as we transition to an in-house manufacturing process; and
that we will not experience any significant delays or disruptions in our supply chain.”
It generally takes established automakers that do not have to worry about supplier contracts, facility procurement, and government permits at least three years to bring a new vehicle to production, so we fail to see how Tesla is going to produce the Model S by 2012, barring a minor miracle. The company admits that it does “not have a full production intent prototype, a final design, a manufacturing facility or a manufacturing process.”
Furthermore, the production of the Model S also depends on Tesla finalizing a number of agreements with Daimler (which has a small stake in the company) that would result in the German automaker providing it with access to parts as well as engineering help. There are also clauses that would allow Daimler to terminate all of its agreements should current CEO Elon Musk leave the company or invest in another automaker.
Even if Tesla manages to overcome the multitude of hurdles in its way, it remains a mystery as to how it would make money in the time that passes between the end of the present Roadster and the launch of the Model S.
The full text of the SEC filing can be found HERE.
After an unfortunate event which took place in Germany, less than 1,000 km (600 miles) before reaching its final destination, Rafael de Mestre’s second round-the-world trip is back on track (we were there for the first one, as well), after a team of mechanics from Tesla Munchen managed to reassemble his Roadster in no time.
Aside from the lightning-quick repair job, the Tesla proved to be an extremely solid machine, and all that needed to be replaced were a few panels on the front – no structural damage whatsoever occurred in the crash, otherwise it really would have been all over. A nice touch is that they kept the bent and distorted number plate, just to show what the Roadster had been through – we like that.
Now, Rafael is set to reach his final destination of Barcelona, in Spain, three days from now, on September 9th. After reaching Spain, he will then head north, towards Strasbourg, in France, in order to rack up a total of 25,000 driven kilometers.
Strasbourg is also the endpoint for another EV trip around the world, the ‘Electric Odyssey’, undertaken by two French adventurers in a Citroen C-Zero. They should be reaching the French city some time in February of 2013.
❐ Check out the Tesla Roadster EV Trip Around the World Back on Track! photo gallery
Tesla is working overtime to give us its Model S electric sports sedan, with the company now approaching the point where the car will start being brought to the world. Now, the US automotive producer has released a video that brings us close to the Model S’ creation process.
The clip shows Tesla’s Chief Designer Franz von Holzhausen and Vice President of Sales and Ownership Experience George Blankenshi explaining how the company put together all the pieces of this puzzle.
Here’s what Tesla has to say: “The Year of Model S is here. As we conduct quality testing, refine details and enter production of Model S, we are growing more excited every day to deliver this revolutionary car to our customers.”
By Andrei Tutu
After a contentious and ongoing battle with the Massachusetts dealer association, California-based electric carmaker Tesla is now facing off against the Texas Automobile Dealers Association in a bid to expand its presence in the Lone Star state. Tesla is facing regulatory battles with state dealer associations in several states, Automotive News reports.
Tesla VP of business development, Diarmuid O’Connell has among the highest barriers in the nation for the operation of a factory-owned store. Tesla currently operates two “galleries” in Austin and Houston, but in order to comply with current state franchise law, representatives cannot initiate or complete a sales transaction or deliver a vehicle on-site. Customers must contact a representative in California to complete the sales transaction, as well as arrange their own transport and delivery arrangements. Even in the area of service and warranty work, requests have to be routed through California, which then sub-contracts the work to the service centers in Texas.
To combat the contorted, Goldbergian work-arounds to sell and service vehicles in the state, Tesla is backing a bill in the Texas legislature that would change the states inflexible franchise laws to make it easier to operate factory-owned dealerships and service centers. But the state dealer association has been actively lobbying legislators and has participated in hearings, claiming that the traditional franchise dealer model is the best way to sell and service vehicles. The association is predicting failure of the Tesla-sponsored legislation that would allow them to operate, calling Tesla’s request for an exemption from existing franchise law “arrogant.”
Tesla continues to battle the Massachusetts dealer association with proposed legislation that would change the state’s dealer franchise law. The state’s dealer association is backing its own separate bill thwarting Tesla’s efforts. The one bright spot for Tesla lately has been Minnesota, where the state dealer association has temporarily suspended its pursuit of franchise law legislation that would have prevented Tesla from opening retail outlets in the state.
Source: Automotive News (Subscription Required)