Archives for Elon Musk - Page 2
In which we bring you motoring news from around the Web:
• Under scrutiny for bypassing a traditional, dealership-oriented retail model in favor of manufacturer-owned stores, Elon Musk, chairman of Tesla Motors, defended his company’s strategy in a blog post on Monday. Mr. Musk said Tesla products would be undermined in the setting of a traditional dealership, where a salesperson would be unable “to explain the advantages of going electric without simultaneously undermining their traditional business.” Mr. Musk said two lawsuits asserting Tesla circumvented state laws aimed at protecting franchisees were baseless because Tesla has not granted any franchises. (Tesla Motors)
• Facing a crisis of overcapacity at its plants in Europe and a projected loss of more than $1 billion in the region this year, Ford has called a meeting for Wednesday with union leaders to discuss the status of its plant in Genk, Belgium. Some media outlets, including the Frankfurter Allgemeine Zeitung, have reported that Ford intended to close the plant outright. (Bloomberg)
• On Monday, the eve of the São Paulo auto show, BMW announced its intention to build a production plant in the southern state of Santa Catarina, Brazil. Plans for the facility are subject to government approval, but BMW has aggressive targets, saying it would inaugurate the plant in 2014 with capacity to produce 30,000 vehicles annually. (BMW)
• Chevrolet said it would introduce the next generation of the Silverado 1500 full-size pickup truck on Dec. 13, a month ahead of the 2013 Detroit auto show. The automaker has not disclosed pricing or powertrain information for the truck, but emphasized it would have progressive design elements, including “jewel-like, projector beam headlamps.” (General Motors)
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.
Scroll down to continue reading…
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
Paul Sancya/Associated Press
Tesla Motors has confirmed that production of its all-wheel-drive Model X electric crossover will begin in late 2014, a year later than the company had originally announced. The revised timing was described in the company’s Form 10-K filed with the Securities and Exchange Commission last Thursday.
When Tesla first revealed the Model X in February 2012, the company said production would begin at the end of 2013, with deliveries following in 2014. Nearly a year later, at the Detroit auto show last January, Elon Musk, Tesla’s chief executive, made the first public statement about the shift in the schedule. Mr. Musk said production of the Model X would begin in the second half of 2014, according to Reuters.
While Tesla has been saying since the Detroit auto show in January that Model X production would begin in 2014, “our recent 10-K was the first written verification of that,” Shanna Hendricks, a Tesla spokeswoman, said in an e-mail.
“I almost have trouble calling this a delay in Model X, because that makes it sound like we’ve run into problems with Model X, and it’s taking longer than we thought, and it’s out of our control,” Ms. Hendricks wrote. “When, really, we’re consciously pushing back timing to allow ourselves to focus on its production and product enhancements in Model S.”
While Tesla did encounter production delays and problems with its first car, the Roadster, deliveries of the first Tesla Model S sedans were made in early June 2012, a few weeks earlier than originally projected. But in the first few months of Model S production, the company fell short of its own targets, delivering only about 250 cars. By the end of last year, the pace had picked up.
Converting customers with reservations into actual deliveries is critical for the company’s financial health. Tesla reported a fourth-quarter net loss of $81.5 million but says it expects to be profitable sometime in 2013. “We are very focused on achieving profitability and maintaining that profitability,” Ms. Hendricks said.
Tesla has not started putting alpha or beta versions of the Model X on the road for testing, Ms. Hendricks said. Tesla is “still finalizing the design prototype that has been on display at both Detroit and Geneva motor shows,” she wrote. The crossover’s most prominent design feature is the use of “falcon doors,” which are hinged at the top and rise like wings.
The Model X is built on the same platform as the Model S sedan. Tesla’s 10-K document provides this description of the Model X: “This unique vehicle has been designed to fill the niche between the roominess of a minivan and the style of an S.U.V., while having high-performance features such as a dual-motor all-wheel-drive system.”
Reservations for the standard Model X require a $5,000 deposit, while the Signature version requires a $40,000 deposit.
Prices for the Model X have not been announced. Tesla’s 10-K document states: “We anticipate that we will make Model X available with 60 kWh and 85 kWh battery pack options, with pricing of each version similar to those of a comparably equipped Model S.” Prices for the Model S sedan include a standard 60-kilowatt-hour version for $69,900 and an 85-kilowatt-hour model for $79,900. Many buyers are eligible for a $7,500 federal tax credit.
The company continues to state Model X production targets of 10,000 to 15,000 cars a year. There is still some wiggle room on the actual start of production with Mr. Musk stating “the second half of 2014” at the Detroit auto show while the S.E.C. documents state “late 2014.” Tesla’s Web site simply says, “Deliveries begin 2014.”
Despite skepticism surrounding Tesla Motors, CEO Elon Musk expects Tesla to report positive cashflow by the end of November.
Doubt cropped up when Tesla failed to meet the planned 500-unit delivery mark by the start of the third quarter, but Musk blamed the slowdown on supply constraints. At the end of the second quarter, Tesla had manufactured 359 Model S vehicles, of which 250 have been delivered to customers.
Musk is also commented on the company’s Department of Energy (DOE) loan. “Tesla has never asked for or even hinted at postponing repayment of the loan…Tesla has always made its DOE payments on time,” Musk wrote in a blog post.
Reports that the DOE has been pushing Tesla to repay its loan sooner than originally planned might have cast a negative shadow over the company’s future.
“The DOE believes Tesla will be highly successful and accumulate a large amount of cash, but that we may then choose not to pay off the loan any sooner than is currently required,” Musk said.
In an effort to further emphasize that point, Tesla also issued an early payment today ahead of its March, 2013 deadline. But observing on-time payments is far from enough to affirm an automaker’s future. There needs to be a solid product backing the brand, which the Model S seemed to prove during our tests.
In our test, the Model S received much praise, another solid reason to believe that Tesla will in fact be successful, thanks to a solid product.
A recent article published in the New York Times by John Broder about the Tesla Model S is creating some fuss today, as Tesla CEO Elon Musk says it is fake.
“NYTimes article about Tesla range in cold is fake. Vehicle logs tell true story that he didn’t actually charge to max & took a long detour,” tweeted Musk.
Broder drove the car from Washington, DC to Boston to test Tesla’s new superchargers that have been set up at rest stops in Newark, Del., and Milford, Conn., about 200 miles apart from each other. He claims that the car barely made it between stops, and on one of the last legs of the trip, it didn’t make it at all and wound up on a flat bed.
Broder claims that after a cold night, his Model S test vehicle lost 65 miles of range. He was told by a Tesla representatives that he needed to “condition” the battery pack to restore lost energy, which consists of sitting in the car on low heat for about a half hour. After completing the process, he still didn’t have enough juice to make it where he was going.
SEE ALSO: Tesla Supercharger Network Launched for Fast Charging
“Tesla’s experts said that pumping in a little energy would help restore the power lost overnight as a result of the cold weather, and after an hour they cleared me to resume the trip to Milford,” claims Broder in the article. After setting out once again, Broder says that the car never displayed the amount of range he needed to get back to his destination, and that the Model S subsequently ran out of charge on the highway.
Each Model S is fitted with a data recorder that can be turned on at the owner’s request, though Musk says that every media vehicle is equipped with an active one. In this particular car, Tesla’s CEO says that Broder took a long detour which was not mentioned in the article, and that the car was not at full charge, according to the data recorded in Broder’s Model S.
The New York Times quickly issued a rebuttal: ”Any suggestion that the account was ‘fake’ is, of course, flatly untrue,” the statement said. “Our reporter followed the instructions he was given in multiple conversations with Tesla personnel. He described the entire drive in the story; there was no unreported detour. And he was never told to plug the car in overnight in cold weather, despite repeated contact with Tesla.”
A similar issue arose when Top Gear tested a Tesla and claimed that the Tesla Roadster ran out of juice. Elon Musk says that was also untrue, and that the Roadster still had 50 miles of available range.
[Source: New York Times, Twitter]
Discuss this story at gasstinks.com
Julie Christie, the rumors are true. After plenty of hint-dropping over the past few months, Tesla officially released 2013 first quarter (Q1) financial details today, and it was the first quarter in which the ten-year-old company was actually profitable. CEO Elon Musk, speaking on a conference call to investors today, made it clear that the numbers are good, but behind-the-scenes factors make them even better.
Take, for example, Tesla’s capital expenditures. The automaker was profitable in Q1 despite spending a lot of money on things like new stores and Supercharger stations, things that won’t require as much money moving forward. Tesla says it plans to spend about $200 million on capital expenditures in 2013. Or how about the Tesla’s gross margin, which grew from eight percent to 17 percent from Q4 2012 to Q1 2013. That’s the average for the whole quarter, Musk said, and “the gross margin at the end of Q1 was much better than at the beginning.”
The call wasn’t all about money-rolling-in news. We knew Tesla would make money selling zero emission vehicle (ZEV) credits to other automakers, and it did, to the tune of approximately $68 million (12 percent of revenues). Musk said Tesla expects ZEV credit revenue to decline throughout the year, going to zero in Q4. The shareholder letter reads, “We expect this to decline significantly in future quarters, as ZEV credits will only apply to about 1/6 of worldwide deliveries, versus roughly half of US deliveries, and the price per credit has declined.” Some estimates put Tesla’s annual ZEV credit income at $250 million.
More numbers and tidbits from the announcement can be seen below.
Related GalleryTesla Motors, Inc. – First Quarter 2013 Shareholder Letter
- Tesla had record sales of $562 million, which was up 83 percent from last quarter and resulted in a profit of $15 million (GAAP profit: $11 million).
- 4,900 Model S EVs were delivered in North America last quarter. This was higher than expected, and likely beat both the Chevy Volt and Nissan Leaf, which has Q1 sales of 4,244 and 3,539, respectively, in the US.
- Tesla now expects US to exceed 15,000 Model S EVs a year, with global demand probably more than 30,000 a year. This breaks down to least 10,000 Model S sales in Europe and 5,000 in Asia (but it could be more, since China is a wild card, Musk said).
- Over a million people visit Tesla stores every quarter. Only a small number actually buy a car, of course, but, “There are lots of people who buy T-shirts,” Musk said. “We actually have millions of dollars in apparel sales, without really trying.”
- Musk said, “We are thinking of reducing the initial [Model S] deposit number, because we don’t really need the cash at this point.” The number is currently at $5,000 but it could be dropped to “some lower number.”
- Production rate for the Model S – currently around 400 a week – could increase. “We haven’t really started to push volume really hard yet, because you need to make sure your house is in order and the car is being made as efficiently as it can be made before you push volume,” Musk said, adding that we could see a “fairly significant increase in volume” next year.
- Musk remains confident that financing the Model S is the way to go. “If our car was exclusively available for purchase and not by financing, it would be available for roughly one million US households. With the right financing, it’s probably available to the top ten million households.” The deal is even better in Europe, where the gas prices are so much higher.
Looking further down the road, Musk said the company is “certainly making progress on the Model X” and will finalize the design of that vehicle in the second quarter. The company’s focus remains on Model S production and service but the X “will become our top focus towards the end of this year” in the lead up to the start of production towards the end of 2014.
TSLA stock jumped way up (over $70 a share as of this writing) in after-hours trading. It closed at $55.79. Musk stands to benefit hugely if all this good news continues, thanks to the 2012 CEO Grant, which you can read about here. You can see Tesla’s shareholder letter in the gallery and find SEC information about Tesla’s June 4, 2013 Annual Meeting here. But get ready for less glowing numbers at the next Tesla quarterly call. Tesla’s letter includes this bit of cold water:
The lease accounting treatment for cars sold through our new financing plan will have no impact on our cash flows, and we expect to be roughly breakeven on cash flow from operations in Q2, despite launch costs in Europe and a huge increase in service centers, stores and Supercharger stations. However, the deferred revenue recognition required by GAAP for lease accounting will lead to a net loss on paper in Q2.
North Carolina is the latest state to line up against Tesla Motors by proposing a bill that would bar direct automaker-to-customer sales within the state, the Raleigh News & Observer reports. Still, Tesla says plans to open a showroom there and has sold about 80 cars to North Carolina residents, with reservations for about 60 more.
According to Slate, a bill pushed by the state’s Senate Commerce Committee – and backed, of course, by the North Carolina Automobile Dealers Association (NCADA) – would not only prevent Tesla from opening a showroom in North Carolina, it would go as far as banning Internet vehicle sales in the Tar Heel state. We’re not sure how that would be enforced, but it would certainly crimp the success Tesla has had without using the traditional industry dealer distribution model. The bill is sponsored by state Sen. Tom Apodaca (R), who claims the goal is to stop unfair competition between manufacturers and dealers (as Slate notes, Apodaca also received $8,000 from the NCADA last year, the most allowed by law). Tesla’s vice president for corporate and business development, Diarmuid O’Connell, argues that the bill is “a protectionist move to lock down the market so we have to go through the middleman – the dealer – to sell our cars.”
Texas, Massachusetts, Minnesota and New York are among states that have so far taken issue with Tesla’s dealer-free distribution model, prompting Musk to say last month that he’d consider going to Congress to try and get factory-to-customer sales legalized throughout the country. Musk is likely emboldened by the fact that Tesla earned its first quarterly profit this year and sold more of its Model S electric vehicles than General Motors and Nissan did of their Chevrolet Volt extended-range plug-in and Leaf EV, respectively.
Related Gallery2012 Tesla Model S: First Drive
By Danny King
Few automakers’ fortunes and CEOs are as intrinsically linked as Tesla Motors and Elon Musk. The boss of the full-electric automaker can influence the stock of his company with something as simple as an outlandish statement – exactly the sort of utterance the mercurial executive is fond of making. In the latest Musk news, it appears he has no plans to change any of that, saying that he will stay with Tesla for “several more years.”
Investors want him to remain at the company through – and past – the launch of the Model S. To leave now would potentially derail any momentum that the company can muster from the all-electric sedan.
Perhaps the investors like the idea of having a lighting rod like Musk around for when questions about cutting production – or when the company will make money – are asked.
Part of his duties through the rest of his tenure at Tesla will also reportedly include personally inspecting production examples of the Model S. To find out exactly what that entails, we reached out to the automaker for comment. According to Tesla spokesperson Christina Ra, Musk checks “Everything from functionality, to fit and finish. Anything from door handles to carpet to molding, to driving… The things we are potentially having to work on are not big things – 98-percent of the car is ready to go.”
Ra would not comment on exactly how many cars he checks at the Fremont, California facility, but tells us, “At a high level, he’s looking at everything.”
We’re still not exactly sure what that means, but its always refreshing to see a CEO down in the trenches – even if it might just be a publicity stunt.
Related GalleryFirst Ride: 2012 Tesla Model S Beta
After offering to help Boeing with its lithium-ion battery problems, Elon Musk is somewhat raising the stakes. Musk, who heads both Tesla Motors and space exploration company SpaceX, has now called the batteries in the Boeing 787 “inherently unsafe” in an e-mail to trade publication Flightglobal.
There’s a fair amount of science involved, but for simpletons like this reporter, Musk basically says the lithium cobalt oxide cells used in the 787 Dreamliner are packed too close together, so that if one cell catches fire, the entire battery pack may ignite in a chain-reaction type situation, which is never good at 30,000 feet. Musk goes on to point out that the cells used in both Tesla vehicles and SpaceX’s space-launch rocket are smaller and separated from one another, so that any potential ignition is contained. Musk says offer to help but has so far been rebuffed.
About 50 Dreamliners were recently grounded because of two incidents, one a fire, involving the battery system. The US Transportation Safety Board and the Federal Aviation Administration are currently looking into the cause of the 787 problems.
By Danny King
Despite an official promise that Tesla Motors would respond to the online kerfuffle kicked up yesterday between The New York Times reporter John Broder and Tesla CEO Elon Musk, the official Tesla website remained silent today. The wait doesn’t mean the internet has been mute on this subject, though. That’s just not how it works.
First up, Broder’s detailed response to Musk tweeting that his article about running out of electricity was a “fake” is clear and straightforward: “My account was not a fake. It happened just the way I described it.” He goes on to describe the ways that he could have babied the Model S to hit the range targets, but points out that the plan was to test the Supercharger network. He added, “Now that Tesla is striving to be a mass-market automaker, it cannot realistically expect all 20,000 buyers a year (the Model S sales goal) to be electric-car acolytes who will plug in at every Walmart stop.”
The rest of the web got in on the action, too. After noticing Musk’s tweet that revealed “Tesla data logging is only turned on with explicit written permission from customers, but after Top Gear BS, we always keep it on for media,” other journalists wondered if they had been tracked when they test drove the Model S. It appears so. The Atlantic flat-out says, “Elon Musk’s Crusade Against The New York Times Isn’t Helping Tesla.”
Over at Automotive News, Mark Rechtin points out an important – and unfair – difference between the way automotive journalists test cars:
If you drive an EV on the autobahn full tilt, your mileage and range will drop precipitously. But so will it if you drive your Porsche 911 or Toyota Camry in a similar fashion. Yet for some reason, while traditional cars are given a pass for lead-footed driving, the reaction to an EV’s reduced range under those conditions is, “Aha!” in a tone mixed with outrage and schadenfreude.
So, yes, the discussion is growing while we wait for Tesla’s delayed official response. The big question is if it is too late to put this genie back in the bottle. By the time Tesla’s report is released, it’ll be just one more item in what is fast turning into a much bigger deal than you would think could ever grow from just 140 characters.
Related GalleryTesla Model S