Tesla Model S requires $600 annual service plan to keep warranty active

Tesla Model S in for service

It appears that Tesla’s new $600-per-year service program for its Model S is not going over well with some of the owners and wait-listers. David Noland, a Model S reservation holder and freelance writer, has dug into it the details and clarified the one he’s finding most annoying. And as it turns out, he’s not the only one taking issue with the program.

According to Green Car Reports, Noland owns a 2011 Chevrolet Volt and likes the service coverage for the plug-in hybrid’s electric motor and battery thermal-management system. It only needs minimal maintenance – a $49 annual system check at a local dealer and a $35 oil change every two years. That’s $84 for two years of routine maintenance. For the Model S, it’s a lot higher: $600 per year, and that electric car doesn’t even need the oil change.

Tesla’s official website says that the annual fee includes an inspection, replacement parts such as brakes and windshield wipers, roadside assistance, system monitoring, remote diagnostics and software updates, so it is more comprehensive. Looking for more detailed information, Noland contacted Tesla’s public relations department but reportedly never heard back. Tesla CEO Elon Musk, though, did eventually respond to Noland’s questions. “We are matching service cost to be less than a Mercedes of comparable purchase price,” Musk wrote. “This basically amounts to $50/month and covers all software upgrades as well as concierge level service.”

When Noland responded with a question about whether Tesla owners who opt out of the service program won’t receive software upgrades, Musk apparently didn’t respond.

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Further investigation showed that the matter is even more serious. In a recent blog post on Tesla Motor Club forum, Tesla’s vice president, George Blankenship, made the policy more clear in comments on a post about the new service plans: failure to pay $600 for an annual inspection voids the warranty. Plus, any visit to a non-Tesla shop for any type of service will void the warranty, a provision that could run afoul of the law.

This isn’t going over well with Model S owners. In a Tesla Motors Club forum survey, 12 percent agreed that Tesla had “screwed the pooch,” and would cancel their orders. About 48 percent think the price is too high but will reluctantly pay it since they don’t think they have another choice. Only nine percent think it’s a great deal worth every dollar.

Noland thinks it’s odd that Tesla is taking what looks like the opposite approach with the Supercharger, offering the fast charging for free. He’d like to see Tesla do something similar with its Model S maintenance plan, or at least follow the example of BMW, where every one of its luxury cars comes with four years/50,000 miles of included service.

By Jon LeSage

Tesla Model S Pricing Details Surface, Larger Battery Capacities to Cost an Extra $10,000-$20,000

Tesla Model S Pricing Details Surface, Larger Battery Capacities to Cost an Extra $10,000-$20,000

George Blankenship, Tesla’s VP of worldwide sales and ownership experience, recently took the opportunity to allay future Model S customer concerns with an update on the electric family sedan.

With production scheduled to commence in mid-2012, the first 1000 units built will be part of the North American Model S Signature Series. In acknowledgment of these initial models, they’ve been deemed “limited edition” and will come with their own unique badges and special options. All North American Model S Signature Series sedans will have the big 300-mile batteries.

We’ve long heard the Model S will start at $57,400 with the smallest 160-mile battery. Blankenship also disclosed the 230-mile battery will add another $10,000 to that cost, while the 300-mile battery will be a not unsubstantial $20,000 on top of the base price. As an incentive, a federal $7500 tax credit is being touted, and state governments may have their own financial perks for supporting alternative propulsion. Final MSRP and option prices are due this summer.

With the 300-mile packs expected off the line first, the 160- and 230-mile batteries will follow later in 2012. Left-hand drive deliveries to Europe will also begin in late 2012 and right-hand drive applications for Europe and Asia will follow suit in mid-2013. Tesla anticipates a grand total of 5000 sedans produced in 2012 at the NUMMI plant in Fremont, California. By 2013, the EV builder will be targeting an annual total of 20,000.

A few months ago, we found that Tesla expects the 20,000-unit production mark to bring them to profits. Stay tuned as we continue to follow the progress of this much-hyped electric sedan from Silicon Valley.

Source: Tesla

By Benson Kong

AAA to Begin Testing of Electric Vehicle Charger Trucks

AAA to Begin Testing of Electric Vehicle Charger Trucks

AAA plans to roll out fleets of trucks equipped with fast chargers to better serve auto club members with EVs, according to Bloomberg. The trucks will be able to charge electric vehicles such as the Nissan Leaf and Tesla Roadster when their batteries run down on the road. This move follows that of AAA’s counterpart in Japan, the Japan Automobile Federation, earlier this month, where that organization announced a joint effort with Nissan to test charger trucks.

Speaking to Bloomberg, AAA spokesperson Christie Hyde said that the Florida-based organization will begin testing the trucks in August. According to Hyde, the initial test group will consist of six “mobile charging units,” testing in states such as California, Oregon, Washington, Florida, Tennessee and Georgia. Hyde declined to give specifics on the cost of the units and who will supply them, however, she did state that AAA will test chargers from multiple suppliers.

With a couple EV models already on the market, and more on the way, automakers’ increasing interest in electric vehicles has prompted the development of a charging infrastructure. Companies such as General Electric are developing roadside charging stations, while power companies are beginning to upgrade to smart grids – installing new meters and transformers to help ensure people can recharge their vehicles at home.

AAA is also preparing itself for the arrival of more electric cars on the road. “We know electric vehicles are coming and we’ve got to be ready for them,” said Hyde. This first batch of charging trucks is part of that plan to get ready. Hyde says that AAA will debut its first mobile charging unit at an electric vehicle conference in Raleigh, NC, next month.

Source: Bloomberg

By Alex Nishimoto

Tesla 2nd quarter financial reporting reveals rosy outlook in face of market pessimism

Tesla Models S being built

Tesla Motors is a publicly traded company, and as such, is required to report its financials and give a summary of its business situation four times a year. Yesterday was one of those times and, accordingly, it sent out its latest shareholder letter and conducted a conference call, with CEO Elon Musk, CFO Deepak Ahuja, and George Blankenship (vice president, sales and ownership experience) fielding questions from financial analysts for over an hour. We listened in and, as well as getting an idea about the company’s financial health, heard a few tidbits worthy of passing along.

First, before we get to the good stuff, some quick numbers. Tesla posted a $105.6 million loss after receiving revenue of $27 million from sales of 10 Model S sedans, 89 Roadsters and 100 Toyota Rav4 EV drivetrains. That’s perhaps a smidge better than what was expected and things shouldn’t get too tight, as it still has access to $233 million in cash and sales could bring in as much as $600 million by the end of the year.

Still, there’s a lot of pessimism in the market when it comes to TSLA – fueled recently by a report from Wunderlich Securities, which predicted a need to raise more capital, as it doesn’t think a production target of 5,000 will be reached in 2012 – and the company’s stock price recently tumbled from just shy of $36 to just under $29 as of market close on Wednesday.

Production does seem to be Tesla’s biggest problem at the moment. It only just recently increased its build rate to 10 vehicles a week – up from five – after running into some quality issues. Small “knick-knacky” things as Musk describes them: interior trim not well-enough aligned in places, chrome finish on door handles not up to snuff. It has slightly revised the timing of production increases and bolstered it interior engineering team in response.

The company should now see about 500 vehicles produced in the 3rd quarter with a “geometric” ramping up in the 4th that should see an additional 4,500 beautiful all-electric machines roll off the line. While it’s sticking with its 20,000 unit prediction for 2013, the team acknowledged that at that rate, it would be able to actually produce 30,000 Model S next year. With reservations rolling in at record levels, it’s not beyond the realm of possibility that that might happen.

A continuance of the increased build rate will also help the company achieve it goal of reducing the wait time for customers. Currently, the queue stretches out for a year and it hopes to bring that down to three or four months as quickly as possible. Tesla realizes that when most people want to buy a car, they want it sooner rather than later, and a shorter line will lead to even more reservations and fewer cancellations.

So, what other interesting things did we learn? Well, perhaps the most exciting thing might be that the Tesla Supercharger unveiling should come in September. While we expect to see 90-kW charge rates, solar panels and battery swapping, we can’t help but wonder what else is involved. Musk believes it will change how people think about electric cars and says it’s, “Way cooler than anyone realizes.”

Musk also touched briefly on batteries. He stated that, while Tesla’s battery warranty covers the initial eight years, he expects the useful life of the packs to be good for double that. Still, he also conceded that warranty-covered replacements are being accounted for.

He is also staying consistent with his view of battery prices, saying that he sees a substantial drop coming in three or four years. Curiously, that timing also seems to coincide with his prediction of substantial chemistry improvements he says will arrive with the company’s less-expensive Gen III products.

If you’d like to check out all the details for yourself, you can read the 3rd quarter shareholder letter here (PDF) and listen to the recording of the conference call here.

By Domenick Yoney

Tesla Faces Off Against Texas Dealer Association – Rumor Central

Tesla Faces Off Against Texas Dealer Association

After a contentious and ongoing battle with the Massachusetts dealer association, California-based electric carmaker Tesla is now facing off against the Texas Automobile Dealers Association in a bid to expand its presence in the Lone Star state. Tesla is facing regulatory battles with state dealer associations in several states, Automotive News reports.

Tesla VP of business development, Diarmuid O’Connell has among the highest barriers in the nation for the operation of a factory-owned store. Tesla currently operates two “galleries” in Austin and Houston, but in order to comply with current state franchise law, representatives cannot initiate or complete a sales transaction or deliver a vehicle on-site. Customers must contact a representative in California to complete the sales transaction, as well as arrange their own transport and delivery arrangements. Even in the area of service and warranty work, requests have to be routed through California, which then sub-contracts the work to the service centers in Texas.

To combat the contorted, Goldbergian work-arounds to sell and service vehicles in the state, Tesla is backing a bill in the Texas legislature that would change the states inflexible franchise laws to make it easier to operate factory-owned dealerships and service centers. But the state dealer association has been actively lobbying legislators and has participated in hearings, claiming that the traditional franchise dealer model is the best way to sell and service vehicles. The association is predicting failure of the Tesla-sponsored legislation that would allow them to operate, calling Tesla’s request for an exemption from existing franchise law “arrogant.”

Tesla continues to battle the Massachusetts dealer association with proposed legislation that would change the state’s dealer franchise law. The state’s dealer association is backing its own separate bill thwarting Tesla’s efforts. The one bright spot for Tesla lately has been Minnesota, where the state dealer association has temporarily suspended its pursuit of franchise law legislation that would have prevented Tesla from opening retail outlets in the state.

Source: Automotive News (Subscription Required)

By Edward A. Sanchez

Elon Musk talks space with Jimmy Kimmel, stays away from NYT dispute

elon musk jimmy kimmel

It’s official: Elon Musk is a bona fide celebrity. He’s appeared in Iron Man 2 and his actions appeal to people who don’t obsessively follow his work at Tesla Motors. Or SpaceX. Or who send money online. He also makes the late-night talk show rounds, and chatted with Jimmy Kimmel last week. Oddly enough, while Musk and his Twitter tirades against a questionable road test article in
The New York Times had been getting tons of attention, Kimmel didn’t even ask the Tesla Motors CEO about it. Tesla’s first-ever quarterly profit didn’t come up, either.

Kimmel introduced Musk as the co-founder of PayPal and the founder of both Tesla Motors and SpaceX, but he left out the electric car part. The interview was all about SpaceX and trips to Mars. “He will lead us to Mars whether we want to go there or not,” Kimmel said in the introduction. A brief bit of the interview went like this:

Musk: “I do want to go at some place, and it’s probably not a good idea for the CEO to be the test pilot”.

Kimmel: “What if we get to Mars and it sucks?”

Musk: “Well, Mars is a fixer-upper of a planet. But I think over time we can make Mars as livable as earth.”

Kimmel: “I’d love to have the first talk show on Mars.”

Shana Lynch, managing editor at Silicon Valley Business Journal, wrote about the interview, saying “Not that space isn’t more fun for nationwide audiences than earnings, but still. We felt a little left out.” You can fell left out yourself by watching the video below.

By Jon LeSage

Toyota to Pay Tesla $60 Million to Develop RAV4 EVs

Toyota to Pay Tesla $60 Million to Develop RAV4 EVs

In July of this year, we brought you news that Silicon Valley electric vehicle start-up Tesla and Japanese automotive powerhouse Toyota had inked a deal to build electric Toyota RAV4s and today we have more details about the partnership.


In a filing with the Securities and Exchange Commission, Tesla has revealed more details about the nature of its partnership with Toyota. Under the terms of the agreement, Tesla will develop a battery, motor, gearbox, “power electronics module” and all the necessary software for an all-electric version of Toyota’s RAV4 compact SUV.

For their services, Tesla will be paid by Toyota some $60 million over the term of the agreement. Both parties will agree on the final specifications, payment amounts and schedule and the expected results and their schedule within the next 60 days. Toyota announced when the project began in July that the RAV4 EV would reach the market in 2012.

That sum comes in addition to the stake Toyota has already acquired in Tesla. Prior to the initial deal in announced in July, Toyota had agreed to buy $50 million of Tesla’s common stock in a private placement transaction that took effect when Tesla filed its Initial Public Offering, which netted the EV-maker $226 million. Depending on the amount of preferred and common stock offered, Toyota may own up to 22-percent of Tesla now, though the companies have not disclosed the exact ownership arrangement.

As part of the deal, Toyota also sold a portion of its shuttered NUMMI factory in Fremont, California, where the two companies will produce the RAV4 EV together. Tesla also plans to use the plant to produce its upcoming Model S electric sedan.

Source: Tesla

By Scott Evans

Zappos CEO will share 100 Tesla Model S EVs in Las Vegas Downtown Project

tesla model s

Tesla may be claiming a real-world cost of $500 a month to lease/own a Model S, but if you live in downtown Las Vegas, you can get 100 Model S vehicles, all the bus rides you want and access to 100 bikeshare bikes – as well as a collection of 100 neighborhood electric vehicles – for under $400 a month. One minor detail: you don’t get to actually drive the Model S.

Called Project 100, the idea is part of the Downtown Project by Zappos CEO Tony Hsieh. For now, the beta project is invite-only and still in the planning stages, writes GigaOM. The Verge says that the monthly cost should be less than $400, because that “represents an average car payment plus insurance.” GigaOM says tiered pricing will be available.

Project 100 will be app-based, and using that app, you can call up one of 100 Model S taxi, unlock the bicycles and NEVs or ride the buses to any of 100 stops. Think of it as mobility sharing, with Teslas – and a high price tag.

Related GalleryTesla Model S

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What is Downtown Project – November 2012 from downtownproject

By Sebastian Blanco

Driving the Audi A3 E-tron

Audi A3 e-tron.Audi of AmericaAudi A3 E-tron.

Of all the Leafs, Volts, Teslas and Karmas, Audi’s E-tron moniker is most redolent of sci-fi films and the utopian promise of a brave, new, petrol-free world.

But like a long-gestating James Cameron epic, the purely electric A3 E-tron hatchback I drove Tuesday in Brooklyn and Manhattan won’t reach American audiences until 2014, according to Audi executives. And even then, it will be based on an entirely new chassis and body, and will take the form of only a sedan. Audi recently said that a plug-in hybrid version of that A3 would beat the full E.V. to showrooms.

Those developments made it doubly difficult to judge Audi’s electric progress against faster-to-market competitors. Yet on a workaday crawl through Manhattan, the A3 E-tron did offer a feel for Audi’s electric philosophy: fewer leaf-sprouting display screens and other electro-gimmicks, and more attention to transparent operation and luxurious feel.

The Audi manages to pack 26.5 kilowatt hours of batteries, 2.5 kWh more than the Leaf, below its hatch floor and transmission tunnel without losing a whit of trunk space, a nice upgrade from cargo-challenged models like the new Ford Focus Electric. Eliminating the gas engine or TDI diesel also gives the electric A3 nearly 50-50 weight balance, a significant edge over the nose-heavy standard models, with their 62-38 ratio. Even so, at 3,600 pounds, the E-tron weighs about 400 pounds more than the gasoline version, and the low-weighted, bricklike feel of the Leaf and other E.V.’s was apparent here as well.

A big electric motor provides the equivalent of 134 horsepower and 199 pound-feet of torque, good for a squirt from zero to 60 miles per hour in roughly 11 seconds, Audi claims. That’s decidedly slower than petrol-fueled models, but as with most E.V.’s, the instant-on torque makes the car feel plenty quick in traffic — that is, up to 89 m.p.h., the A3 E-tron’s limited top speed.

Audi cites an optimal 92-mile driving range, but closer to 70-75 miles in average real-world conditions. And while this Audi featured a 3.3-kilowatt onboard charger, Jeff Curry, a brand spokesman, said a production version would be upgraded to the 6.6-kW units quickly becoming the industry standard. Those units can zap a battery full in about four hours, and Audi says D.C. charge capability, which can deliver an 80-percent charge in 30 minutes, is also part of the plan.

Instruments are blessedly simple, including a driving-range meter nearly identical to a typical gas gauge. And in every other respect, the Audi feels like a typical Audi, with pleasing steering and a quiet, rock-solid structure.

The E-tron’s coolest feature? Like the Fisker Karma, this car allows the driver to adjust the intensity of energy-capturing regenerative braking, here offering four preset modes to the Karma’s three, which can be selected with paddles mounted behind the steering wheel. For drivers like me who don’t always want ultra-aggressive deceleration the instant I lift off the throttle, as in BMW’s electrified Mini E, I can choose a gentler setting that is more suited to freeways and other high-speed situations. It’s something that every E.V. should imitate.

Mr. Curry said Audi had 17 A3-based E-trons in the country, with engineers and company employees testing them to work out the bugs.

Other automakers, notably BMW with its Mini E and its 1 Series-based ActiveE, take a different tack, recruiting actual consumers — “electronauts,” in BMW’s parlance — to lease small numbers of E.V.’s in test fleets and provide real-world feedback. Those consumers, given access to rarecars and even rarer access to company executives and engineers, get nearly giddy over their personal role in the electric future, morphing into spokespeople for the brand and ideal prospects for coming models.

So why can’t early adopters raise their hands and wrap them around this juiced Audi, even in modest numbers?

“We don’t beta test on our customers,” Mr. Curry said. “We want to use our own learning to finish the car for the market, rather than have people deal with teething problems.”


Tesla pays back $465M DOE loan, Musk says ‘I hope we did you proud’

elon musk with tesla model s

We’re willing to bet there are bottles of champagne popping all the way from Washington, DC to Palo Alto, CA today with the announcement that Tesla Motors has, as suspected, paid off the entirety of its $465-million Department of Energy loan.

“I hope we did you proud” – Elon Musk

As far back as July 2012, Tesla began talking about paying the US government back early, but it was apparently the tremendous rise in the company’s stock value recently that prompted CEO Elon Musk to push for the immediate repayment this week. From a price of $33.87 on January 1, TSLA has climbed to $87.24 today (down a bit from the recent highs of over $92). Last week, Tesla sold enough stock to raise over a billion dollars to repay the Advanced Technology Vehicle Manufacturing (ATVM) loan, with interest. This makes Tesla the first automaker to pay the DOE back, and it did so nine years ahead of schedule. In a prepared statement, Tesla CEO Elon Musk thanked the DOE and Congress and “particularly the American taxpayer from whom these funds originate. I hope we did you proud.”

The DOE is certainly proud, issuing a release that said the repayment “shows the strength of energy department’s overall loan portfolio.” The DOE has come under fire recently for the loan it gave to Fisker Automotive. Two other ATVM recipients, Nissan and Ford, have not yet paid all theit money back, but there are no apparent worries there, either. Energy Secretary Ernest Moniz said in a statement that, “not every investment will succeed” but that the DOE’s overall $34-million loan portfolio of more than 30 loans “is delivering big results for the American economy while costing far less than anticipated.” Details in the press releases below.

By Sebastian Blanco