Archives for September 2nd, 2013
With deliveries of the all-electric Model S set to begin on June 22nd, Tesla is apparently making a really big deal of this and they will even have live coverage of the first delivery, as opposed to more mainstream manufacturers for whom their first mass-market electric car was delivered to the first customer in a parking lot with (almost) nobody watching.
Also, if you thought that Teslas were built in the American equivalent of a shed, well, think again! They employ very modern technology in the making of their cars, like robots and hydraulic presses, among others, in order for them to reach their target of 5000 cars per year.
Worth mentioning is the fact that Tesla “is one of the few companies in the world producing a steel-reinforced aluminum car." This material gives exactly the benefits you have come to expect from unusual materials used in the auto industry, less weight and more strength – both being an important factor in the making of the Model S, as it needs to be light so that it doesn’t use up its juice too quickly while also maintaining its structural rigidity under the weight of all those batteries.
Picking which cars will become classics is a lot like playing the stock market: it takes a little insight and a lot of luck. Insurance company Hagerty thinks it has found ten new cars on sale today that will become sought-after classics in the future.
“This year’s Hot List is comprised of vehicles from a wide variety of market segments and manufacturers, but they all share one thing in common — a certain ‘cool’ factor that will be remembered by car enthusiasts for many years to come,” explains Hagerty president and CEO McKeel Hagerty. Take a look at the list below, and let us know whether you agree with the company’s picks in the comments section.
SRT Viper: Hagerty selected it because it celebrates the mantra of “no replacement for displacement” even as other automakers downsize engines. We said the 8.4-liter V-10 engine, “has always been a thundering powerhouse, but it now packs the explosive immediacy that a proper ten-cylinder engine deserves.”
Chevrolet Corvette 427 Convertible: This swan-song for the sixth-generation Corvette was essentially a Z06 convertible. Hagerty says that the last year of any Corvette is especially valuable; we say the 505-hp, 7.0-liter V-8 — “is still in our minds the best Vette engine” — will attract power-hungry future buyers.
Audi RS5: Hagerty the RS5′s sultry styling as a reason why it will eventually attain classic status, but we think there’s another reason: performance. Even though it came third in a comparison test, we found “the Audi is unbelievably quick;” it trounced a BMW M3, Mercedes-Benz C63 AMG, and Porsche Boxster S on a track.
Porsche Cayman S: No argument here; we love the redesigned Porsche Boxster, and its hardtop cousin, the Cayman, is one of the cars we’re most excited to drive this year. “Like the updated Boxster, the new Porsche Cayman is more powerful and more efficient than the outgoing version,” we said. It will do 0-to-60-mph in as little as 4.4 seconds and reach a top speed of 175 mph.
Chevrolet Camaro ZL1 Convertible: Forget the Corvette 427 — this 580-hp supercharged monster is the most powerful convertible Chevrolet has ever put into series production. We love it just as much as the coupe version: “Whether the roof is made of steel or polyester doesn’t change the fact that the Chevrolet Camaro ZL1 is a fabulous sports car that delivers both big performance and big fun.”
Tesla Model S: Hagerty was presumably influenced by the fact that we named Elon Musk’s luxury machine our 2013 Automobile of the Year. “More than any electric car that has come before it, the Model S feels and drives like a gasoline car of the same price,” making it a game-changer that’s sure to become a future classic.
Mini Cooper John Cooper Works GP: With only 500 destined for the U.S. market, this hopped-up Mini will certainly have exclusivity on its side. Need another reason the JCW GP will become a classic? It has 211 hp and can reach 150 mph, more than enough performance from such a petite hatchback.
Subaru BRZ: We agree with Hagery’s recognition of the BRZ as “one of the lightest sports coupes” on sale today, but we’d be remiss if we didn’t note the car is mechanically paired with the Scion FR-S. Still, it’s clearly a thrilling car that will resonate with enthusiasts for years to come. “A sports car doesn’t need to look good in the stats box, it just needs to be a great drive,” we said. “And the BRZ is a great drive.”
Volkswagen GTI: A two-time Automobile of the Year recipient, Hagerty agrees with us that the GTI is “fun, cool, and practical.” The German hatchback expertly fuses performance with day-to-day livability, and just like all GTIs since 1976, it has a devotee cult of followers. “The key to that code, of course, is the blend of athleticism, practicality, and performance that was the basis of the original GTI,” we said.
Ford Focus ST: The GTI has a challenger in the form of a turbocharged Focus. The go-fast hatch represents the first time in a decade that Ford has brought a high-performance compact to America, and Hagerty believes that alone will attract collectors. “The Ford ST is not exactly a world-beater in terms of refinement, handling balance, or ergonomics,” we said. “But it does offer a lot of car and performance for the money.”
So, which of these will become future classics, and which hot cars did Hagerty forget? Sound off in the comments section below.
By Jake Holmes
With all of the praise being heaped on the Tesla Model S by the automotive press, it’s not difficult to see why a long waiting list is forming for the forthcoming electric car. But Tesla is still quite a small company, and with a waiting list now 14,000 names long, it will take the better part of a year before they can deliver to all those eager customers, especially at current production capacity. But some people, people with money, don’t feel like waiting that long, and some of those a bit higher up on the list are seeing this as an opportunity to make a few bucks.
People are now selling their slots on eBay, and these are going for many thousands of dollars, but there is one little problem with this, the reservations aren’t transferable. As Green Car Reports tells it, the Tesla reservation agreement is very specific about this, saying in Paragraph 6 “If you do not wish to enter into a Purchase Agreement at the time that you are contacted by Tesla, you have the option to relinquish your reservation sequence position and defer to a later position to be determined by us (only one deferral is permitted). If you do not communicate your decision to us within ten (10) days of notification under paragraph 4, you will automatically be granted such a deferral. This Agreement is not transferable or assignable to another party without the prior written approval of a Tesla authorized representative.” Tesla is reportedly not giving out said written approval.
This makes those expensive reservation slots that people are buying somewhat complicated. Since you cannot transfer the reservation, these eBay sellers are instead offering to sell their Model S as soon as they receive it, most likely for the sticker price plus whatever the auction comes to. But this isn’t necessarily straightforward either, as some states don’t allow you sell a car as used when it only has a couple miles on the odometer. So not only are you not really bidding on what you think you are, but there is the potential for you to end up in a horribly complicated situation. Most sellers don’t to have any kind of plan for this at all, and even if it’s legally possible, it could be that Tesla won’t look too favorably on these kinds of actions. Ferrari, for example, is famous for discouraging buyers from flipping cars, and those that do are frequently banned from ever buying another Ferrari again. Tesla probably won’t do this to you, but for those who want a Model S, it’s probably best to just wait your turn.
By Jacob Joseph
2013 Tesla Model S before DC-to-Boston road trip, Feb 2013 [photo: Aaron Schildkraut]
On Friday, Tesla held a media call to reveal another in the series of announcements touted in tweets by CEO Elon Musk.
This time, the news covered enhancements to the warranty and service experience on its Tesla Model S electric luxury sport sedan.
Tesla Motors [NSDQ:TSLA] is now delivering several hundred Model Ses each week and, Musk said, taking feedback from buyers to heart.
Its goal has always been to create “the world’s best service and warranty program” for any car on the market, he said, with the “overriding principle” being, “I want give people peace of mind” to ensure they have “the happiest possible transport experience.”
The revisions to Tesla’s service and warranty policies include three main points.
The $600-per-year service plan is now optional rather than mandatory.
This had been a source of considerable grumbling among Model S owners forced to pay $600 each year for a service plan on a car that, at least in theory, should need only wiper blades and tires replaced.
“We made a slight mistake,” said Musk in a rare admission, “in making the service fee mandatory.”
And, he revealed, unlike current automakers, his charge to the Tesla service department is “never to make a profit” from owners–just to break even.
That varies from today’s conventional model, in which new cars are sold at relatively little profit by dealerships, which makes the bulk of their profits through service work and the sale of used cars.
Musk even quoted what he termed an adage in the car business: “Sales sells the first car, but service sells all the subsequent ones.”
Any battery failure for any reason (within reason) is covered for the warranty term.
The goal here is not to require Model S buyers to read their owner manuals to understand how best to take care of their battery, Musk said.
“Any product that needs an owner’s manual to work is broken,” he said–a much-repeated Silicon Valley belief not always actually taken to heart by designers of consumer products.
And the company specifically included “user error” in its list of things that are now covered.
“This is to address electric-car concerns like, What if my battery dies?” said Musk.
‘Revenge of the Electric Car’ premiere: Tesla Motors CEO Elon Musk on red carpet
“We want to say, don’t worry about the battery, it’s going to be fine.”
Whether that includes leaving the car for long periods without plugging it in was not addressed on the company’s call, but a notorious “bricking” incident with a Tesla Roadster received much coverage a couple of years ago.
Coverage excludes deliberate damage–owners attacking their battery packs with sledgehammers are likely not covered–but it seems a smart move on Tesla’s part.
Loaner cars at Tesla Service Centers will be new top-of-the-line 85-kilowatt-hour Model S Performance versions.
And if owners decide they prefer the driving experience of the loaner to their own Model S, they can buy that car on the spot. Its price will be the new-car price minus 1 percent for each month it’s been in service plus $1 for each mile it’s covered.
Musk said that each service center will have two to 10 such cars, depending on its service volume. The fleet altogether would number about 100 cars.
These loaner cars will also be delivered to whatever destination the Model S owner specifies, by a valet service, and the company will pick up the car to be serviced wherever it’s located.
Elon Musk signs new 2013 Tesla Model S at Tesla Store opening, Austin, Texas [photo: John Griswell]
Investors in startup electric-car maker Tesla Motors [NSDQ:TSLA] have had quite the wild ride lately.
Following its first-ever profitable quarter, with its share price soaring above $80, Tesla announced last Wednesday that it would issue new stock and warrants.
Now, Tesla has quietly increased its offering, which could raise the company more than $1 billion if its stock price stays at current levels.
30 percent more
In a Bloomberg article late Friday, CEO Elon Musk said the offering would be increased by 30 percent over the level announced just two days previously.
On Wednesday, Tesla said it would offer 2.7 million to 3.1 million more shares of its common stock, as well as issuing up to $450 million in convertible debt.
At a closing price of $84.84 per share that day, total receipts to the company would have been $229 million to $263 million for the stock, for a total of $680 million to $710 million.
The expanded offering of up to 3.9 million shares could net the company as much as $1.08 billion.
Many analysts say the high price of Tesla stock is due to a “short squeeze,” in which investors who felt the share price was too high sold Tesla shares they didn’t own and now must buy the stock to cover their short positions.
To date, Tesla has sold approximately 10,000 cars globally. All but 2,500 of them are the company’s all-electric Model S luxury sport sedan, which starts at $69,900.
Musk follows Iacocca?
The Bloomberg article compared Musk to Lee Iacocca, who ran Chrysler during and after its 1979 bankruptcy.
Under his leadership, Chrysler repaid its government bailout loans with interest in 1983, seven years ahead of the due date. Musk intends to do the same, nine years early.
2013 Tesla Model S
Most of Tesla’s $465 million low-interest loan from the U.S. Department of Energy is still outstanding, although Tesla has made payments of $25.4 million to date.
But Wednesday’s offering announcement included the pledge that Tesla would use much of the proceeds to pay off the loan entirely.
Taxpayers might see a profit of $12.8 million after the loan is paid back by the end of this month.
The company will have roughly $680 million in cash and cash equivalents afterward, up from $214 million at the end of March.
Ford, Nissan, Tesla vs. Fisker
The DoE loan was granted to Tesla in July 2009 as part of its advanced-technology vehiclemanufacturing program.
Much larger amounts went to both Ford ($5.9 billion) and Nissan ($1.6 billion, of which it drew down $1.4 billion), which are making payments on schedule.
The fourth large loan commitment was $529 million to Fisker Automotive, although the DoE froze disbursements after $192 million had been paid out.
Fisker is now in deep trouble, having laid off most of its employees and not built any cars since last July.
Meanwhile, Tesla stock closed Friday at $91.50, more than five times its June 2010 initial public offering price of $17.
After announcing that all their Europe-bound Model S sedans would be manufactured and distributed from The Netherlands, Tesla has now released the official pricing information for the car – in euros. One thing needs to be mentioned first, though, and that is the fact that they have revealed that they will only be selling the higher end versions of the car first, in order to turn a profit.
This means only cars with the top two battery packs (60- and 85-kWh) will be available. Now, they have announced the base price for the cheapest car they will offer on the Old Continent, and it is €71,400, or $94,370. That makes it exactly $26,970 more expensive than it is in the US.
Next up is the Signature Performance model, which gets the larger 85 kWh battery pack, as well as extra power from the electric motors. In Europe, it will set you back €109,150, or $144,680, which makes it $39,280 more expensive than the US version.
The price difference is justified through the high regional VAT (Value-Added Tax), as well as the numerous local laws, rules and regulations and the shipping costs. However, the actual value will go down, once all the local tax rebates are taken into account, yet it will still be quite expensive and still very much a niche product.