Tesla Motors announced today that it will report profitability for the first quarter, after sales of the Model S electric sedan exceeded expectations. Tesla has sold 4750 units of the car thus far, up from the 4500 units previously planned.
The announcement is good news for Tesla after a disappointing year in 2012, when the company lost almost $400 million. Last year, Tesla sold just 2650 units of the Model S while it ramped up production of the car.
“There have been many car startups over the past several decades, but profitability is what makes a company real. Tesla is here to stay and keep fighting for the electric car revolution,” Tesla CEO Elon Musk said in a statement.
The company also announced two changes to the model lineup. First, Tesla has killed the low-range, 40-kWh version of the Model S. Only four percent of customers asked for the smallest battery, making it financially difficult for Tesla to build that version. Customers will receive the next largest battery pack, with a capacity of 60 kWh, but the car’s software will keep range equivalent to that of the 40-kWh pack unless owners pay for an upgrade.
In addition, Tesla revealed what it calls an Easter egg in the new Model S. Although the hardware to use Tesla’s Supercharger fast-charging network was supposed to be optional, it has actually been included in all versions of the Model S. Customers can simply pay for a software update to “unlock” the function if they need to use the Supercharger network.
Source: Tesla Motors
By Jake Holmes
Jack Plunkett/Associated Press
In which we bring you motoring news from around the Web:
• He just won a legal battle waged by New York car dealers, but Elon Musk still has his sights set on Texas, where he is trying to prepare the way for dealer-free Tesla to be able to sell more electric cars. Despite strong political opposition from the Texas Auto Dealers Association, the fact that legislation to allow E.V. manufacturers to sell cars in the Lone Star state without going through dealers is on the table seems promising for Tesla. When he was in Texas testifying in favor of the bill on Wednesday, Mr. Musk mentioned the potential that Tesla could even open a production plant there. He also hinted at the possibility of a Tesla truck, which could do well in Texas. (Automobile)
• In other Tesla news, Elon Musk tweeted that he was “deeply wounded” by Sarah Palin‘s comments on Facebook that lumped the electric carmaker with other “losers” in the industry. Ms. Palin’s comments were mostly aimed at Fisker, which recently laid off 75 percent of its staff because of financial problems, but also excoriated Chevrolet’s Volt and the Model S, proposing that they were taxpayer-subsidized failures. Regarding Mr. Musk’s pained Twitter salvo, Peter Grier, The Christian Science Monitor‘s Washington editor, went so far as to suggest that “sometimes the better part of P.R. valor is keeping your yap shut and moving on.” (The Christian Science Monitor)
Sarah Palin calls Tesla a loser. Am deeply wounded. rawstory.com/rs/2013/04/07/…Btw, Model S warranty does cover “bricking”.
— Elon Musk (@elonmusk) April 8, 2013
• Audi skipped the 2013 model year for the R8, but announced on Thursday that it would offer a freshened version of the midengine sports car for 2014. The base R8 V8 Coupe starts at just under $115,000, and the 550 horsepower R8 V10 Plus Coupe will sell for 170,545 with a manual transmission and nearly $180,000 equipped with the optional S tronic transmission. Audi says the top-of-the-line V-10, S tronic-equipped R8 goes from zero to 60 miles per hour in 3.3 seconds, reaching a top speed of 196 miles per hour. (Autoblog)
• China’s hunger for Buicks has given General Motors a leg up over Volkswagen in China for the first time in three quarters. Although Volkswagen includes Hong Kong and Macau in its China sales statistics and G.M. does not, the German company still recorded about 770,000 sales this quarter, 6 percent fewer than G.M. Most foreign automakers in China – including fast-growing Ford and Hyundai – have enjoyed burgeoning sales numbers. But G.M. appears poised to hold on to the annual lead it has held there for the last nine years. (Automotive News)
• After a 24-year hiatus, IndyCar will return to Pennsylvania’s Pocono Raceway. On July 7, the Pocono 400 will run the 2.5-mile track as the second round in a triple crown event sponsored by Fuzzy’s Vodka. The driver who sweeps Pocono, the Indianapolis 500 and the IndyCar series finale in Fontana, Calif., stands to win a $1 million prize from the beverage company. (ESPN Racing)
Rumors have abounded regarding the next-generation Ford F-150, due for 2015. Word is that the new truck will heavily utilize aluminum to help boost fuel economy and decrease curb weight. Now, according to our colleagues at Motor Trend, Tesla and SpaceX CEO Elon Musk is adding some fuel to the fire.
Speaking with MT during the Detroit auto show earlier this year, Musk pontificated on the type of aluminum Ford may be using for the new F-150. “From what I’ve heard, they’re using 7000-series aluminum, which is the right step. It’s very strong and light—it’s the same alloy we use to build rockets. There are many different alloys you can use, and a lot of manufacturers use 5000-series aluminum, but 7000 is twice as strong. It can’t be traditionally welded; it must be bonded or mechanically joined or friction welded.”
Interesting is Musk’s note that the 7000-series aluminum would need a new bonding method versus being traditionally welded. While the F-150 does sell in huge numbers – at 645,316 copies were sold of the F-Series last year, it remained the country’s best-selling vehicle – we’re not sure if Ford would be willing to cut into the profitable truck’s bottom line so substantially. However, better efficiency for the F-150 could translate to even more sales, and using such a high-selling model to pioneer aluminum construction could help with economies of scale.
We do know that Ford will draw on the Atlas Concept from this year’s Detroit show (pictured) to inspire the design of the 2015 F-150. Expect the new truck to use active aerodynamic features and to drop roughly 700 lbs from the new construction methods. This weight loss piqued Musk’s interest, too: “I’m very curious about how Ford is going about [the new F-150]. Honestly, we may have something to learn. Our chassis is a bit heavy; it could stand to lose a little weight.”
Source: Motor Trend
The social media tête-à-tête between The New York Times and Tesla CEO Elon Musk, stemming from a defamatory review by John Broder of the Model S and Tesla’s new “Supercharger” network on the East Coast, is heating up in a major way. Just yesterday we summarized the Twitter spat, and now Musk has expanded upon the data recorded during Broder’s test drive – adding major credence to the criticism of the NYT writer.
The smoking gun in this case is the information that was captured by the data recorder in Broder’s loaned Model S. The data recording function is one that is only activated for consumers when permission has been expressly granted, says Musk, but is always turned on in the case of media vehicles. Thusly equipped, Broder’s vehicle was keeping track of speed, charging data, map data and more, presumably without the writer’s foreknowledge.
The evidence recorded by the in-car systems happens to contravene Broder’s most damning claims of the Tesla, says Musk in his article titled A Most Peculiar Test Drive. First, and perhaps most shockingly, the Model S “State of Charge” log shows that Broder’s test car “never ran out of energy at any time.” Broder’s reporting indicated that the car ran completely out of juice at one point and had to be evacuated on a flatbed truck. The data log also points out that the trip was made at speeds ranging from 65 to 81 miles per hour, where the writer claimed to have set the cruise control at 54 mph, with periods of driving as slowly as 45 mph.
Musk’s piece also indicates that Broder – who was ostensibly driving to test the charging network – didn’t tell the truth about how long he charged his Model S. At one stop he specifically writes that he charged the car for 58 minutes on his second stop, where the log indicates that he was on the Supercharger for just 47 minutes. Tesla claims that the writer charged his car to 90 percent of capacity on his first stop, 72 percent on his second and just 28 percent on his third – all despite his concerns over just barely having enough energy to complete the respective legs of his trip.
Taken at face value, Tesla’s data seems compelling to say the least. With that said, we’re no more in a position to attest to the veracity of the logged data than we are the claims of Mr. Broder. At the very least it will be fascinating to see what the NYT does to respond, if anything at all, to this rather serious, high-profile assault on its credibility.
For its part, Tesla is taking Elon’s article as the final word on the matter. A company spokesperson released this statement, just this morning: “Please note, no one from Tesla – including Elon – will be providing additional comment on this topic moving forward as we feel the blog speaks for itself. At this time, this post is the company’s final statement on the issue.” We’ve collected all of Tesla’s charts and graphs from Broder’s trip in our attached gallery, so you can have a closer look for yourselves, too.
Related GalleryTesla Charts
Elon Musk, tech mogul and co-founder of Tesla is coming to the defense of his company as it faces a lawsuit from dealers in Massachusetts and New York.
They allege the Palo Alto, California-based electric-car maker is violating franchise laws that forbid factory-owned stores, something that’s restricted or prohibited in 48 states. Naturally, Musk denies this claim. In a blog post he said the company has taken “great care not to act in a manner contrary to those rules.” He backs up this assertion with several arguments.
The first point he makes is that most dealerships have an inherent conflict of interest. Pushing consumers toward electric cars undermines the sales of traditional vehicles, which is the majority of their business. Tesla, of course, does not have this problem.
Another one of Musk’s arguments centers on franchise laws. Factory-owned Tesla dealerships cannot unfairly compete with franchised dealers because there are no franchised Tesla stores, therefore no harm can be done.
One of his last points has to do with the location of Tesla dealers. By putting them in high-traffic areas like shopping malls Tesla hopes it can reach potential customers before they decide what kind of car to buy. The stores are staffed by non-commissioned salespeople are there to educate consumers. Vehicles are purchased from the company’s website.
By Craig Cole
Despite earlier reports that Tesla would have a successor to its Roadster model set to debut sometime in 2015, the American electric automaker has confirmed that a decision on a new Roadster has not yet been made.
The automaker is currently focusing on its new Model S and Model X, as well as a more mainstream BMW 3 Series rival that’s expected to be unveiled sometime in 2015-2016. Tesla hopes to have a couple of sedans and a compact SUV on the market before it returns to the drawing board on creating a successor to its Roadster model.
“It isn’t decided that we will build another Roadster, but that would be around the time we would look to have a real ‘halo’ model in the range,” said George Blankenship, vice-president of sales and ownership experience.
By Jason Siu
According to its Third Quarter 2012 Shareholder Letter, Tesla “is now at over 200 cars per week or 10,000 cars per year, which is at the critical threshold needed for Tesla to generate positive operating cash flow.”
That’s an important milestone to be sure, but the news is actually even better; Tesla expects to ramp Model S production up to 400 cars per week (20,000 units/year) by December of 2012, and says it will deliver 2,500 to 3,000 units in the fourth quarter of 2012. That’s lower than the previous target of 5,000 in 2012, but it’s more an issue of delayed achievement rather than missing the mark altogether.
All of that production bodes well for the future, but as of today, the automaker has yet to earn real money. Revenue for the third quarter of 2012 was $50 million, equating to a net loss of about $110 million after expenses were tallied. The stock market likes the numbers, with TSLA shares rising 8.9 percent on Monday after the report was released.
With production up to 400 cars per week, we’re pretty sure company CEO Elon Musk isn’t able to personally inspect each Model S as he was when Tesla was producing fewer than 80 cars per week. In any case, accolades have been rolling in for the Model S, with two recent scores including being named Automobile Car of the Year and one of the 25 Best Inventions of the year by Time Magazine.
Check out Tesla’s complete Q3 earnings report here.
Related Gallery2012 Tesla Model S: First Drive
Start undressing California’s Clean Vehicle Rebate Project, a program intended to spur the sales and leases of zero-emission vehicles, and front-page topics come into view — reduction of greenhouse gases and job creation chief among them. So when the program recorded its 10,000th rebate earlier this month, it merited some pomp.
Courtesy of the Air Resources Board
Natasha Casteel of Meadow Vista, Calif, was recognized on Friday as the state’s 10,000th owner of a ZEV. A librarian for the city of Roseville, Ms. Casteel said in a telephone interview that she used to drive a 2003 Volkswagen Passat for her 48-mile round-trip commute. Saying she wanted to “greatly improve” on that car’s fuel economy, she sought out the purely electric Nissan Leaf.
The state’s Clean Vehicle Rebate Project began in 2008 as part of a broader mission to push innovation in the transportation sector. To spur sales of E.V.’s, the state provides a $2,500 rebate on either a lease or purchase of an eligible vehicle, which can be combined with a maximum federal tax credit of $7,500.
When she learned a charging station was located essentially right outside her office door, Ms. Casteel bought the Leaf, one of the more than 15 eligible vehicles under the program. “The rebate process was very simple, because the $7,500 was provided up front to reduce the cost directly, then the $2,500 was the rebate check coming from California,” Ms. Casteel said. “It was all handled by the dealer, except for the $2,500. I just had to fill out an online form and they e-mailed me. It was easy.”
Ease of use was a critical consideration for the state’s Air Resources Board, the body charged with ensuring the quality of the state’s air. “Our goal here in California is to reduce greenhouse gases. Passenger vehicles account for about 28 percent of our gases,” Cassandra Hockenson, a spokeswoman for the board, known as ARB, said in an interview. “The purpose of the program is to get people to take that leap and buy these vehicles and see how wonderful they are and what they can do.”
“We are saying, ‘We know this is new, we know you’re not comfortable and that it’s a whole different ballgame, so we want to give you an incentive to jump into this ring and see what you think,’” Ms. Hockenson added.
The California Center for Sustainable Energy is responsible for collecting rebate forms and ensuring criteria are met. According to the center, private individuals account for 88 percent of rebate funds, with nonprofits, government agencies and businesses claiming the remainder. Roughly $16 million remains to be distributed, but the California Energy Commission has committed up to $5 million in additional financing, according to ARB.
A study by the California Electric Transportation Coalition concluded industries involved in the production of E.V.’s could create almost 100,000 additional jobs in the state by 2030.
“When we have new opportunities, we have new jobs. And the project helps people buy these vehicles, who maybe normally couldn’t, and the more people who buy them, the more the cost goes down,” Ms. Hockenson said. “And as more people buy them, we get more infrastructure.”
Infrastructure, most notably the availability of charging stations, was an important factor for Ms. Casteel in her purchase decision.
“I think people would buy more electric cars if there was more charging infrastructure, and that would really help remove any range anxiety they have,” Ms. Casteel said, echoing a sentiment expressed on Monday by Elon Musk, the Tesla chief executive, in statements about his ambitions to create a nationwide network of charging stations for Tesla vehicles.
“At the library, I’m the only employee who has one, but as my husband says, ‘You don’t really want to advertise it’s an electric car, because everyone will get one and you’ll have to wait in line to charge,’” Ms. Casteel said.
By TORI TELLEM
Tesla announced it will start selling its Model S electric car in June, earlier than originally planned. The news, however, was tempered a bit due to the company’s reported first-quarter loss of $89.9 million, almost double the $48.9 million loss reported during the same period last year.
Despite that, Automotive News reports that Tesla is expecting its total revenue for 2012 to be at least $560 million. It originally predicted $550 million in revenue, but boosted the forecast due to the early launch of the Model S. Looking even further ahead, CEO Elon Musk is optimistic that his company will be profitable in 2013, predicting a 25 percent gross margin.
The arrival of the Model S can’t come soon enough for the automaker. Production of the Tesla Roadster ended last year and according to The Detroit News, only a couple hundred Tesla Roadsters remain in Asian and European showrooms. Additionally, Tesla expects it will soon exhaust the $465 million loan it received from the Department of Energy.
Despite the lack of vehicles available for test drives, Tesla says that there has been much interest in the Model S. According to The Detroit News¸ there are at least 10,000 pre-order requests for the upcoming EV, which will be built at Tesla’s assembly plant in Northern California.
Compared to the Tesla Roadster, which carried a price tag that neared six figures, the Model S will be relatively affordable with a base price of $49,000 following tax credits. It will be offered with three battery options that offer ranges between 160 to 300 miles per charge. Additionally, the Model S will have the ability to recharge its battery to 80 percent capacity when plugged into a fast charger. Among its long list of notable features is its rear-facing, third-row seats (boosting passenger capacity to seven) and its 17-inch, touchscreen infotainment display.
Tesla hopes to sell 5000 units by the end of 2012 and plans to produce 20,000 units annually once its plant is running at full speed. The automaker will start selling the Model S after it clears the required crash tests.
“I do not know where we are in the [NHTSA testing] queue, Musk told the Automotive News. “We are very confident that it will be a five-star safety rating, the safest car on the road. We have certain architectural advantages, like a much longer crumple zone in the front because we don’t have to make room for an engine.”
Source: Automotive News (subscription required), The Detroit News
The Twitter messages are once again flying from Tesla Motors.
In a Wednesday announcement, the Palo Alto, Calif., automaker said it had paid off the entire loan made to the company by the Energy Department — and added that it was “the only American car company to have fully repaid the government.”
Within hours, Gualberto Ranieri, a senior vice president at Chrysler, responded on Chrysler’s blog: “The information is unmistakably incorrect. It’s pretty well-known that almost exactly two years ago – May 24, 2011 – Chrysler Group LLC repaid (in full and with interest) U.S. and Canadian government loans more than six years ahead of time.” Chrysler also responded via Twitter.
“Not so fast, Tesla,” says @chrysler comm chief, re claims it’s first to repay U.S. govt. @teslamotorsbit.ly/14zB6sJ #shortciruit
— Chrysler (@Chrysler) May 23, 2013
Elon Musk, Tesla’s chief executive and a Twitter regular, responded, saying: “As many have already noted, @Chrysler is a division of Fiat, an Italian company. We specifically said first *US* company.” And later, he added: “More importantly, @Chrysler failed to pay back $1.38B. Apart those 2 points you were totally 1st.”
Tim Rue/Bloomberg News
Mr. Musk’s second Twitter message is in reference to a portion of Chrysler’s TARP loan that was assigned to the old Chrysler when the United States government sold its stake in the newly organized Chrysler Group LLC to Fiat SpA. Of the $12.5 billion the government had loaned the old Chrysler, approximately $1.3 billion was left behind. On June 2, 2011, the United States Treasury said in a statement that it was “unlikely to recover the difference of $1.3 billion owed by Old Chrysler.”
Asked to respond to Mr. Musk’s contention that Chrysler Group LLC is not an American company, Mr. Ranieri, in a telephone interview, said: “I don’t have any response to that. Chrysler Group LLC is the company of Walter Chrysler, and it speaks for itself for what it does.”
When asked if he could expand on that, Mr. Ranieri added, “I love espresso ristretto, so I don’t have anything more to add.”