Archives for September, 2013 - Page 6
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.
Since the automaker’s inception, the only way would-be Tesla Roadster drivers could get the electric sports car in their garages was to purchase one outright. But all that’s about to change with Tesla’s new vehicle leasing program.
Purchasing any car — let alone a two-seat all-electric sports car that runs over $100,000 — is a big decision. In order to get more people behind the wheel of its Roadsters, Tesla launched its Tesla Motors Leasing program. Leases last 36 months, and require a $12,453 at signing, along with a $9900 down payment. With this lease plan, monthly payments are estimated to be in the neighborhood of $1658 — in comparison, Tesla’s purchase plan, offered through Bank of America, would run customers an extra $1200 each month.
To add some icing on the cake, Tesla’s new “Tesla Rangers” service is included in the cost of the lease. As previously reported, the “Rangers” can perform service and maintenance tasks at the owner’s home in lieu of bringing it to a dealership. Normally, this service costs at least $1 per round-trip mile traveled.
Tesla’s lease program begins today, and according to the company, it’s ordered a handful of Roadsters with the most popular colors and options in order to prepare for customer demand.
Be sure to check out our comparison test that pits a 2010 Tesla Roadster against the 2010 Porsche Boxster Spyder (complete with video!).
NAGOYA, JAPAN — What will Toyota Motor Company get out of its recent minor investment in Tesla Motors? Perhaps an electric vehicle prototype, Toyota President and CEO Akio Toyoda told a group of American reporters Friday. Toyoda expressed enthusiasm for working with a new, Silicon Valley-based high-technology company and said through an interpreter they can “join hands and develop cars, in terms of being a joint-venture.”
Toyoda said his company is “building a prototype EV unit,” but would announce details to the press at a later date. When asked to clarify whether the EV car is a joint venture with Tesla, Toyota Executive Vice President Shinichi Sasaki said there are two Toyota EVs in the works. One car is from Toyota alone and the other is with Tesla. Bottom line is that Toyota will work with Tesla on something. Whether it ever goes public will depend on its engineering success.
Earlier, Sasaki expressed enthusiasm for Tesla’s use of household personal computer lithium-ion batteries, but conceded that “reliability goes down” when you string thousands of them together to power a car.
And, of course, one thing Toyota doesn’t need these days is a new reliability problem. The whole point of the American automotive and business journalists’ visit to Japan, ending Friday, was a deep dive into Toyota’s quality and safety operations.
Toyoda said that its investigation of more than 3600 unintended acceleration claims found no problem with its electronic throttle control systems. He also said Toyota has no intention of blaming customers for accidents caused by what the drivers claimed were unintended acceleration problems.
Toyoda skirted the issue of whether Toyota’s new quality and safety initiative is eating into its resources to build more interesting cars. His hints that Toyota might build a new-age Supra were no more than hints, and Toyoda acknowledged it will take the approval of the whole company to build such a car; that it’s not simply his decision. Watch for more detail and analysis coming presently in the Motor City Blogman blog.
Auto News, Tesla, Toyota
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By Todd Lassa
Tesla Model S
Tesla Motors [NSDQ:TSLA] has announced European pricing for the Model S, set to go on sale there next year.
Speaking on the Tesla Blog, Tesla vice president George Blankenship revealed that the company is using a transparent approach to European pricing, making no more profit per car than it does in the U.S.
In the Netherlands, where Tesla is basing its European operations, a 60 kWh Model S kicks off at €72,600 ($96,000). 85 kWh models start at €83,150 ($110,000), and the Model S Performance starts at €97,550 ($129,000).
Signature models, arriving in the Spring, cost €101,400 ($134,000), and Signature Performance cars will be €110,950 ($147,000). All prices are before local incentives, and inclusive of purchase tax.
That purchase tax, plus a slight price increase to account for transport costs, import duties and other costs relevant to individual European countries (plus exchange rates) explains the large price difference between European and U.S. pricing. U.S. pricing starts at $67,400 for the 60 kWh model.
Blankenship also confirmed that the 40 kWh model won’t be available in Europe, at least initially–Tesla may choose to sell it in Europe at a later date.
Tesla will also offer deductions of €1,700 ($2,250) to buyers who already hold a Model S reservation in Europe, or plan to do so by the end of December. Buyers will need to finalize their order within four weeks of receiving their “Invitation to Configure” from Tesla.
Model S Signature models will start arriving by late Spring, and non-Signature car deliveries will start in Summer 2013.
Interested parties can head to their relevant European Tesla website.
US president Barak Obama called for a 75 percent increase for the Department of Energy's EV research budget which would reach $575 million as a result.
Convincing Americans that EVs are a viable alternative to their gasoline cars has proved difficult, but adoption of electric cars is on the rise and technology is advancing at a steady pace.
Obama has taken plenty of political flack for his support of green technology. Ex-VP candidate Sarah Palin recently called Tesla and the Chevy Volt "losers", suggesting the president has invested too much money into cars that the vast majority of people can't afford.
Still, that's not exactly true. Nissan has started making the Leaf EV in North America and has subsequently dropped prices below $30,000. After taking into account tax incentives, the car can be cheaper than $20,000.
By Mihnea Radu