Archives for August 11th, 2013
In stark contrast to the woes faced by other upstart plugin auto brands Coda and Fisker, Tesla seems to be resolute and resilient in its business strategy. The company is so confident in its success, that it released a statement on the company blog that it intends to re-pay its Advanced Technology Vehicle Manufacturing loans five years ahead of schedule. This would put the final payment of the loan in 2017, as opposed to the original deadline of 2022.
In the heated political climate surrounding government-subsidized green energy initiatives, the company was quick to point out the that ATVM loans were initiated and approved under the Bush administration, and were completely separate from the federal bailout of General Motors and Chrysler, as well as being the smallest of the ATVM loans granted, the others being Ford at $5.9 billion, Nissan at $1.4 billion, and Fisker at $529 million. Tesla’s loan was for $465 million.
In the blog post, Tesla’s VP of Business Development, Diarmuid O’Connell, said the company expected to show a modest profit in the first quarter of 2013, excluding non-cash option and warrant-related expenses.
The company’s upcoming models were briefly mentioned in the post, including the Model X crossover, and the third-generation model, described as a high-volume, low-price model, sometimes referred to as the “Blue Star.” During its development, the Model S was coined the “White Star” by many automotive media outlets.
However, being a publicly-traded company, Tesla is under the scrutiny of investors and regulators, and announced that its annual report would be delayed due to errors in its filing, according to Bloomberg. Some unpaid capital expenditures from 2011 and 2012 will be re-classified as operating activities in the revised report.
Source: Bloomberg, Tesla
If Tesla’s future plans actually come true, by 2016 the company will offer the Model S, Model X as well as a premium entry-level four-door, BMW X3 fighter, and new sports car. That’s the news from a Wired report, quoting CEO Elon Musk.
Before Tesla can think about launching a midsize crossover and roadster in the 2016 calendar year, however, the company also has the upcoming Model X crossover, not to mention the BMW 3 Series challenger that could arrive in 2015 after the Model X arrives in dealerships early in 2014.
“We’ll do the X3 equivalent and then a Roadster follow-up in parallel,” Musk said to Wired.
Higher-volume models like the midsize crossover and the entry-level four-door — said to carry a base price around $30,000 when it debuts — will help Tesla reach the sales levels necessary to make a profit on its vehicle architecture. Musk notes that the car will have a similar hatchback design as the Model S, perhaps a similar arrangement found between the Fisker Karma and Atlantic models.
While Musk didn’t specify whether the new crossover model will have the Model X’s flashy, outward-opening doors, we wouldn’t be surprised to see them dropped to help the model reach a lower base price. Speaking of price, Musk hints that Tesla’s next sports car may see a price drop compared to the Roadster.
Which upcoming Tesla would you most like to drive, the Model X, the BMW X3 sized crossover, entry-level four-door, or sports car.
By Zach Gale
Creating a new automaker out of nothing is one of the most difficult types of business one could get into. However, Elon Musk seemed to have what it takes to pull it off, and while we still have faith in him and his vision, all we are hearing regarding the company’s numbers is never good.
Now, the most recent number to be talked about is their sales expectation for the year. When they first estimated the kind of revenue they would be bringing in in 2012, they were expecting $600-million, yet with the latest issues which have confronted the automaker, they have been forced to be less optimistic, with a projected figure of between $400- to $440- million.
The reason is the fact that Tesla is unable to increase the production volume of the Model S quickly enough, and while things are thankfully moving along, the pace is way off what was originally intended. They have also reported a total loss of, wait for it, $864.9-million, up until June 30th of this year. Now, they are reportedly working to achieve just over half of the projected production figure of 5,000 units by the end of the year.
Thankfully, however, there are now 13,000 orders for a Model S, so there’s no shortage of customers willing and eager to give up on gasoline altogether. The first several thousand customers have already been asked to configure their car, or risk losing their place in the ‘queue’.
Story via autonews.com
Last week, I wrote about how I thought that Tesla was getting chewed up by the Twitter fight between a New York Times reporter and Elon Musk, its famous and hard-to-control CEO. But as I looked at the test Tesla offered to put it through and thought more about the car a bit, I has another realization: The Tesla Model S and Fisker Karma would both be better off if they just swapped drivetrains.
I arrived at this conclusion after a conversation I had with Michael Dell (yes, that Michael Dell) some time ago on the Karma. Both he and I were looking to buy one, and decided not to for very different reasons: me because its performance sucked, and Dell because it needed weekly software updates (something I’d been unaware of).
In looking at both cars, it suddenly struck me that both the Model S and Karma have power plants completed mismatched to the rest of the car. Here’s what I mean.
The workhorse with the heart of a cheetah
When you look at the Tesla Model S, it looks like a high-end Japanese car. It has decent back-seat legroom; it has a very nice, tablet-like control center; it has been very reliable (so far); and it’s a car that you would likely want to use daily. Its performance (in the higher cost performance configuration) is in supercar territory, with a 0-to-60 time approaching 4 seconds or in line with a new Jaguar XK-RS.
On the other hand, as the problems last week illustrated, it really isn’t a great long-distance commuter. You’re better off driving it under 100 miles round trip, and charging it at home at night so you have plenty of power buffer. So while the car has the body and configuration of a touring car or long-distance commuter, it has the heart of a performance car that you’d only drive occasionally, and for short distances.
The cheetah with the heart of a workhorse
To look at the Fisker Karma is to lust for it. It has the design cues of an exotic, with a really long hood, huge wheels and tires, and a mean, aggressive posture. It sits so low the battery pack goes between the passengers, and like many exotics, it isn’t known for reliability. All the technology inside means you do have to struggle with a bit before you get a handle on it. Unlike the Model S, it uses an electric-hybrid drivetrain, so while it has the same published range of 300 miles, you can fill it with gas and take it on long trips. However, these issues with reliability and comfort suggest the Karma is really better suited for short hops. I’d doubt anyone would really want to drive it long distances, particularly far away from dealerships that could repair it.
Performance is lackluster for a supercar, with a 0-to-60 time around 6 seconds. A stock 2013 Honda Accord EX-L Coupe would pretty much dust it. This wouldn’t matter as much if you were driving a sedan like the Tesla S, that car doesn’t look like a racer, but the Fisker does. That means a lot of kids are going to be laughing at your expense from stop lights.
If you put the Fisker Karma power plant in the Tesla Model S, you’d get performance in line with the base model and gas-car range consistent with the look and configuration of the car. You’d have a true luxury commuter. If you put the performance version of the Model S drivetrain in the Fisker Karma, you’d get an electric that could keep up with a Jaguar XK-R, and likely dust most performance cars at any light (electrics are particularly strong from 0 to 30mph). You’d likely drive it short distances, so the range thing wouldn’t be that important.
Power plants with purpose
In today’s world, a commuter car still makes more sense with either an ordinary gasoline engine, or a gas-electric hybrid configuration. But for an exotic, pure electrics are just fine, particularly if you are a bit of a stop-light racer. You can dust the other car before you exceed the speed limit, and since they’re quiet, your engine won’t be the one the cop hears. Unfortunately, the existing Tesla Model S and Fisker Karma have this configuration backwards. It’s a shame Fisker and Tesla separated, because clearly both cars could have been more compelling with a few features borrowed from one another.
By Rob Enderle
Not long after offering 2.7 million additional shares, Tesla has just announced that the company has fully repaid the Department of Energy loan that wasn’t due until late in 2022. The announcement follows a string of recent company updates, including how Tesla sells and warranties the Model S.
Tesla wired $451.8 million to fully repay the loan with interest, and in a release the automaker says it is the only American car company to have fully repaid the government. Then again, Tesla currently only offers one vehicle, the lauded Model S. The larger and delayed Model X (pictured at right) is set to arrive next year.
UPDATE: Tesla isn’t actually the only American automaker to pay back government loans. Chrysler points out that, about two years ago, it paid back government loans to the U.S. and Canadian governments in full. For another perspective on this issue, read this Forbes blog.
So far, Tesla has worked with Mercedes and Toyota, and offered the all-electric Lotus-based Roadster, a car the company says had a 30-percent gross margin. More recently, we’ve heard about the Model S’ improved financing terms as well as a resale guarantee and a lenient warranty update. Next week, Tesla will reveal details on a revised supercharger system. Company co-founder Elon Musk hinted at the announcement on Twitter, saying there may soon be a way to recharge a Model S throughout the country faster than you can fill a gas tank.
The Department of Energy loan fit into the Advanced Technology Vehicle Manufacturing program of which Fisker was also a part. On the original $451.8 million loan, Bloomberg notes that taxpayers will make at least $12 million from the deal. Paying off the loan early was made possible thanks to the roughly $1 billion raised in last week’s new common stock and convertible senior note offerings.
While reaching truly stable financial ground is still anything but a certainty for Tesla, it appears the company is on the right track.
Source: Tesla, Bloomberg
By Zach Gale