Archives for September 8th, 2013
Elon Musk is taking his argument for a different kind of customer-dealer relationship directly to the people. In this case, the Tesla Motors CEO writes on his company’s blog to list the reasons why the luxury electric-vehicle maker decided to own all of its dealerships instead of offering franchises.
Musk, who said the Tesla Model S sedan aspires to be “the best car of any kind” in his new post, says that using the traditional dealer franchise model would have created conflicts of interest withing the salespeople. The reason is that any energy used to educate the public about electric vehicles would detract from conventional-vehicle sales. “It is impossible for them to explain the advantages of going electric without simultaneously undermining their traditional business,” Musk writes.
Additionally, most buyers purchase the same make as their previous vehicle, which means there are few buyers who would walk into a multi-brand dealership and be willing to take the time to learn about Tesla. Musk added that Tesla would have 19 dealership stores in the US by the end of the year, up from 10 at the beginning of the year.
While the Model S has been universally praised, its pricey service program has not. Earlier this month, David Noland, a Model S reservation holder, wrote that Tesla’s $600-a-year service program is more than 10 times the cost of the service program for the Chevrolet Volt extended-range plug-in hybrid. Tesla has argued that its service plan is more comprehensive than usual because it includes an inspection, replacement parts such as brakes and windshield wipers, roadside assistance, system monitoring, remote diagnostics and software updates.
Finally, Musk addresses the recent lawsuits over Tesla’s stores. As you might expect, Musk doesn’t back down:
Regrettably, two lawsuits have nonetheless been filed against Tesla that we believe are starkly contrary to the spirit and the letter of the law. This is supported by the nature of the plaintiffs, where one is a Fisker dealer and the other is an auto group that has repeatedly demanded that it be granted a Tesla franchise. They will have considerable difficulty explaining to the court why Tesla opening a store in Boston is somehow contrary to the best interests of fair commerce or the public.
We’re sure the case will be made, though, and we’ll see how well it’s delivered.
Related GalleryTesla Model S
By Danny King
It appears hot Romanian model Catrinel Menghia and Charlie Sheen were effective at publicizing Fiat’s hot hatch. Chrysler can’t keep up with all the 2012 Fiat 500 Abarth orders, and the automaker has informed dealers that orders for the 500 Abarth for the 2012 model year are currently not being accepted.
Those who place an order now for the scorpion-badged Abarth will be forced to wait until next fall to slip behind the wheel of next year’s model, which won’t begin to ship until next fall. Customers who put their deposits down as early as March will also have to wait until the 2013 batch arrives in September.
By the time the Abarth started trickling into Fiat showrooms in April, The Detroit News reports the company already had more than 1000 cash deposits from customers. The automaker originally planned to build about 1000 vehicles at the company’s factory in Toluca, Mexico, but after receiving a flurry of orders, the automaker bumped up production to the factory’s maximum output of 3000 units a year.
Thanks in part to a small dealer network, Fiat sales didn’t hit the initial target of moving 50,000 cars by the end of 2011, selling only 19,769. The picture appears to be improving, however, as 16,702 Fiat 500s have already been sold through May 2012.
As for the Tesla Model S, the automaker tells us no more reservations are being taken on the Signature model — which has a claimed 300-mile range. The top trim of the Model S which has a claimed 300-mile range. The top trim of the Model S is expected to earn an EPA range rating of 265 miles, and is limited to 1000 units.
Source: The Detroit News, Tesla
Though Tesla’s Model S electric sedan is considered by many to be merely a pipe dream, the four-door EV is apparently well into its development, as this video shows a Model S prototype conducting winter in Baudette, Minn.
The video starts like an intro to a spy movie, with a satellite image of the testing location complete with info about the region and graphics simulating instrument readings. From this, we learn the temperature range of the test area is -10 to 15 degrees Fahrenheit. The Model S prototype, which Tesla tells us is a second-gen, Beta-phase unit, is next shown conducting various maneuvers in the snow. We see the Model S quietly running a 600-foot slalom, making a quick lane change at speeds up to 60 mph, and giving its suspension and steering a workout running through a snow-covered autocross course. The EV appears to handle pretty well in the powdery stuff, though it does spin out at one point, despite the edited footage making it look like a well-executed drift.
While we don’t get to see anything new when it comes to Tesla’s upcoming sedan, it’s encouraging to see the electric automaker is hard at work testing its latest product. But Tesla had better be, if it hopes to deliver its first production models by this summer. As we previously reported, that first batch will consist of Model S sedans equipped with the 85-kWh lithium-ion battery pack, good for a claimed range of 300 miles. While we’re taking a “we’ll-believe-it-when-we-see-it” stance on those range claims, this video could mean a test of the Model S isn’t too far away.
Check out the video below to see a Tesla Model S being put through its paces.
Cold Weather Climate Testing the Model S from Tesla Motors on Vimeo.
Cold Weather Climate Testing the Model S from Tesla Motors on Vimeo.
Electric cars like the Tesla Model S offer up a unique challenge to firefighters. Rather than engines, fuel tanks, and fuel lines, electric cars have motors, batteries, and high-voltage cables that can potentially electrocute someone trying to save an occupant after an accident. Because of the challenge, Tesla has just put out a video showing just how firefighters should dismantle a Model S in the event of an accident.
If you want to skip the video’s drier bits, the Tesla Model S destruction starts at the 27:45 mark in the video below. Firefighters begin by ripping off the door and front quarter panel, before ripping into the A-pillar. The firefighters then dig into the dashboard and completely separate the dashboard section from the rest of the Model S, causing complete destruction of the electric car.
Watch the Tesla Model S get torn to shreds in the video below.
Source: Brock Archer via YouTube
Anyone close to the industry would probably agree that Tesla, of all the small EV makers, is making the biggest strides toward leaving its start-up status behind.
Agree or disagree, it sounds like that might finally be the case. Company CEO Elon Musk released a statement today through Twitter suggesting the company is in the black.
“Am happy to report that Tesla was narrowly cash flow positive last week. Continued improvement expected through year end,” Musk said.
With orders stacked for months worth of production, and a publicized price increase that helped to clinch last-minute buyers, Tesla seems to have the formula for success figured out. In fact, Musk predicted in early October that the company would reach this target.
SEE ALSO: Tesla Model S Gets $2,500 Price Increase
It probably wasn’t very hard, though. The brand doesn’t build cars before they’re sold. Instead, it takes orders and deals with scheduling a backlog of scheduled builds. That would give a guaranteed income figure the brand can leverage.
It’s also important to remember that while Tesla might be in the black now, there isn’t any promise it will stay there. The company operates on a one-car model, building a run of vehicles before moving on to something else.
There is a buyback program for people who purchased the Roadster, but production is concluded which means buying a used one.
Provided the brand sticks to its formula for the Model X, it wouldn’t be terribly surprising to see a similar dip into debt while the brand’s crossover bites chunks out of the company’s coffers. Ideally, the Model S will sell with enough success to fund the next car without that becoming an issue, but there are many factors at play.
Tesla has been facing resistance from dealer associations with its factory-owned dealerships since the start-up automaker first started selling cars, but it won another big case in Massachusetts when a judge dismissed a lawsuit brought on by the Massachusetts State Automobile Dealers Association (MSADA). According to Automotive News, the case was dismissed after the judge said the association “lacked standing to sue” despite the fact that MSADA executive vice president quotes the state law as saying, “A factory cannot own a store.”
The latest lawsuit follows a similar suit from back in October where the MSADA attempted to prevent Tesla from opening a store in a suburban Boston mall; the electric car maker received approval to open another store in Natick, MA, which brought on this second lawsuit. It’s unlikely this is the last we’ve heard about this issue in Massachusetts and in other states, but Tesla seems to be coming out victorious in each case so far. While laws pertaining to dealerships vary state to state, factory-owned dealers are usually noncompliant with state law – a lesson Chrysler learned back in 2011.
By all accounts, the Tesla Model S is a formidable offering in the electric vehicle world, a market that’s still considered to be in its infant stage.
Recently, the American automaker’s newest sedan landed on TIME Magazine‘s Best Invention of the Year 2012 list. The publication went so far as to say that the Tesla “has the lines of a Jaguar” but was mostly impressed by its range of 200-plus miles.
Of course, we loved the fact that the Model S delivers 362 hp and 325 lb-ft of torque and in our review commented that; “This might not just be the future of the electric car. The Tesla Model S could be the future of the American auto industry.”
By Jason Siu
Questions about the legality of Tesla selling its electric vehicles in its own retail stores have been floating around since the days of the Roadster. Last week, the recent wranglings between auto dealer associations and Tesla stores in New York and Massachusetts were moved along in courts of law, proving once again that EVs won’t arrive without hassle.
Specifically, Automotive News reports, the Massachusetts State Automobile Dealers Association (MSADA) has filed a complaint in the Norfolk County Superior Court over the Boston-area Matick Mall Tesla store. A hearing over a potential preliminary injunction is supposed to take place this week. In this state – and others that prevent factories from owning dealerships – you can’t technically purchase a Tesla in a Tesla store. Instead, potential buyers are told to place an order on the Tesla website. Tesla says this complies with local laws. Some local dealers obviously disagree. Robert O’Koniewski, MSADA executive vice president, told AN, “They claim they’re operating under the guise of a non-sales showroom, and we call that out as an outright scam.”
Over in the Empire State, Tesla was sued in New York State Supreme Court both by the Greater New York Automobile Dealers Association and a dealer member. Here, one of the claims against Tesla is that stores owned by automakers are participating in an unfair fight, since small dealerships don’t have as big a budget for advertising and store improvements.
In 2010, the president of the Colorado Automobile Dealers Association said his feeling, “is that a manufacturer-owned store as a business model violates the spirit of the state law here. But not a single person is complaining about it, and it’s kind of a back-burner thing for us. I imagine that if we start getting complaints from our membership, we would move it up to a front-burner thing.” Guess which burner is turned on now?