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In deep with Tesla CEO Elon Musk: Financials, Falcon doors and finding faults in the Model S

tesla ceo elon musk



Tesla Motors Elon Musk spends about half his working life – i.e., almost all of his waking hours – in his office at SpaceX in Los Angeles. The automotive CEO is, after all, also in charge of the rocket company, which means that he’s thinking about a lot more than just ramping up production of the Model S. But he is thinking about that a lot, too. More than you might expect.



AutoblogGreen recently got to sit down with Musk at SpaceX for a one-on-one, wide-ranging interview. Musk, comfortable and relaxed in an “Occupy Mars” t-shirt, was forthcoming about most things we asked – but questions about Tesla’s upcoming Supercharger network of fast chargers, which can deliver so much more juice per minute than any other plug-in vehicle charger on the market, were deflected, since the company is planning a big announcement at the end of this month or early October – and we got into Tesla’s financial situation, why the Model X has those falcon doors and how Daimler saved Tesla. We learned a lot, including that Musk really doesn’t like the rear seat access in the Audi Q7. Not one bit.



Read the whole interview below.









ABG: What’s the biggest thing on your mind right now, with the Model S. George [Blankenship] wrote the post about 100 vehicles being produced, 74 for customers. Is that at the forefront or are you already looking at what you’re going to do next?


Every Model S needs to be exactly right, and I am literally personally looking at every car at this point.

Musk: Certainly, there’s a little bit on the back burner with Model X and a few other things, but the company’s central focus is on scaling up production of the Model S while trying to keep quality as perfect as possible, really trying to have every car that goes out the door be perfect. None of this, “J.D. Power found 80 defects” bullshit. Every car needs to be exactly right, and I am literally personally looking at every car at this point. I won’t be able to do that long-term, but the cars are held up for shipment twice a week and usually on Tuesday or Wednesday I will look at every singe car and drive one or two at random and then on Saturday I’ll do the same thing.



ABG: What does that process entail? Visual inspection, turning them on?



Musk: There is a visual inspection of the inside and outside, looking at fits and interior finish and often sitting inside and making sure that everything is put together correctly. Obviously, the software is always going to be the same, so I’m not trying to see if there’s any variation there. And then, as I said, I pick cars at random to drive and make sure that the driving feel is correct and the sound system is working as it should and if there’s an issue, I’ll trace it back to the exact place on the line where that occurred. For example, yesterday I found that the installation of the headlamp was not quite correct and there was a slight asymmetry between the right and the left. I think most people wouldn’t see it, but it seemed pretty obvious to me. So I was like, this doesn’t seem right, this is off by like three millimeters. So I literally walked over to the lead tech on that portion of the line to find out why is this three millimeters wrong and it turned out he was still operating with the part dimensions of the old part, but we had made a new part that didn’t require shimming and nobody had given him the new instructions that it no longer needed shimming to get to the right position. And that was the origin of the problem. On Saturday, I will talk to the whole assembly, metal stamping and plastics team to make sure that everybody understands that they are all empowered to be perfectionists on the line and that they should not let a car move from their station if they see anything that is slightly wrong. They must reverse the line and send it back to the prior station.



ABG: You’re talking to them on Saturday. Are they working seven days a week?


If you can go work for another company and then maybe you can work a 40-hour work week. But if you work for Tesla, the minimum is really a 50-hour week.

Musk: Right now we’re working six days a week. Some people are working seven days a week – I do – but for a lot of people, working seven days a week is not sustainable. The factory is operational seven days a week but most people we only ask to work six days a week right now and, obviously, we want to get that to a more reasonable number. I think people can sustain a 50-hour work week. I think that’s a good work week. If you’re joining Tesla, you’re joining a company to work hard. We’re not trying to sell you a bill of goods. If you can go work for another company and then maybe you can work a 40-hour work week. But if you work for Tesla, the minimum is really a 50-hour week and there are times when it’ll be 60- to 80-hour weeks. If somebody is hourly, they receive time-and-a-half but if somebody is salary, then we do cash and stock bonuses for going above and beyond the call of duty. So we try to make it fair compensation, but the general understanding is that if you’re at Tesla, you’re choosing to be at the equivalent of Special Forces. There’s the regular Army, and that’s fine, but if you are working at Tesla, you’re choosing to step up your game. And that has pluses and minuses. It’s cool to be Special Forces, but it also means you’re working your ass off. It’s not for everyone.







ABG: When you start building more and more Model S vehicles and hiring more people, will all of the factory staff be expected to step up?



Musk: Everyone. So we will only scale to the degree that we can hire people who are willing to do that. We’re getting quite big, though. We’re at almost 3,000 people, 2,800 or something.



ABG: Roughly how many – in percentage or raw numbers – Model S vehicles do you send back?



Musk: The issue is that we need to improve the communication update frequency. That person would have learned it, but he learned it maybe two days later and we would have had to fix a bunch more headlamps. He’s a really good guy, and I was actually really impressed with his knowledge, he had it right down to the millimeter, but he just had the wrong instructions. So, the talk on Saturday is going to be: “Guys, don’t follow instructions if they don’t seem right. It doesn’t matter how junior you are, if you just came out of school and are 22 years old. Whatever. If you’re looking at something that doesn’t seem right, it doesn’t matter if you got those instructions from the vice president or from fricking me or whatever. You should say, hey, this doesn’t seem right and this is why. If you’re right, you’re right and it’s not about the position of the person, it’s about the truth of the argument.



ABG: Going back to the number of cars, do you have a number if how many you’ve noticed?


I find things wrong in almost every car.

Musk: I find things in almost every car.



ABG: Are they all worth sending back?



Musk: Yeah, absolutely.



ABG: So, pretty much every car you look at you send back?



Musk: I have corrections. (laughs) In the beginning, we have to be slightly imperfect because we don’t have everything completely dialed but our aspiration is to get to cars that are accurate to the limit of reasonable physics. What I’ve told my teams is that we want our cars to be so accurate you could use them as a calibration device. So, if I want to know how long is a meter, oh, don’t worry, I can go measure the car.



We’re going to be ordering some laser calibration devices so we can literally calibrate the entire dimensions of the car within tenths of a millimeter. If it’s wrong, let’s trace it to the origin and fix it. This is very extreme for the car business, but for the rocket business this is not, so from my standpoint, when people say you can’t do that, it’s like, “I do that every day. What are you talking about? I know it’s possible.” We’re trying to take the precision of rockets, where fractions of a millimeter can mean the difference between success and failure. We’re applying rocket science to the car business, absolutely. If you want to make the best car, that’s what you have to do.



ABG: Since you’re so involved with the Model S at this stage, will it be hard to let go, as more and more cars get built?



Musk: As our rate steps up, it won’t be possible for me to inspect every car, so then what I’ll be doing is picking cars at random and inspecting those and then, if the sample group is sufficient and I’m not seeing any issues, then that means the most likely thing is the greater population is good, but [my involvement] is most important in the beginning because once we get instructions correct and the feedback loops in the system correct, then I think that pretty soon I won’t be able to find issues.



2012 Tesla Model S - front three-quarter dynamic motion shot



ABG: Have you had cars come back from customers, where you noticed a mistake and then realized that that problem had been sent out to someone and you wanted to replace it?



Musk: No. Our customers are more forgiving thus far than I am. They all think it’s really great.



ABG: With all of this effort spent, I think legitimately, put into each of the early Model S vehicles, the time and money spent per vehicle is very high at this point –



Musk: It is, of course.



ABG: Do you have an idea of how long it will take for the Model S to become profitable? How many you’ll need to make? Do you even expect to make money on the first generation?


There’s no question that we have to make money on the Model S.

Musk: Absolutely. There’s no question that we have to make money on the Model S. We made money on the Roadster, as a product line by itself. We did actually reasonably well. I’m not sure what the lifetime gross margin is, but somewhere between 25 and 30 percent, which is quite good for the car business. If the Roadster was the only thing we did, then we could have achieved profitability, but we would be a much smaller company. The issue with going to the Model S is we’re going from around 700 cars a year to 20,000 cars a year. It takes a better person than me to remain profitable if you’re going to improve your volume by 30. That’s 3,000 percent. There is a pretty massive investment required. We definitely need to make money. We need to repay the government loan. In fact, my goal is to repay that loan early. I actually feel pretty confident that we will be able to repay the loan early and I take that really seriously because, essentially, the U.S. people, through their intermediaries in Congress, has been kind enough to loan Tesla money and it is our absolute duty to repay that as soon as possible.



ABG: As you’re well aware, that’s definitely a hot political topic right now, the money that the government spent on advanced technologies.


One of the requirements of the ATVMP loan was that you demonstrate viability as a company. That’s why General Motors and Chrysler were not eligible. I think there’s a slight question about why Fisker was given the money, but whatever.

Musk: I don’t regard this as a political thing. I just think that we have an obligation to do right by them. People have made it a political thing, yes. I want to take the opportunity to clarify the nature of the loan, which a lot of people confuse with the bailouts, because they were occurring at approximately the same time. But, in fact, one of the requirements of the ATVMP [Advanced Technology Vehicles Manufacturing Loan Program] loan was that you demonstrate viability as a company in your own right, and that’s why General Motors and Chrysler were not eligible because they were going through bankruptcy. I think there’s a slight question about why Fisker was given the money, but whatever. (laughs) The value of the money was really as a catalyst. The DOE money did not, as many people think, save Tesla. That’s not what occurred. The credit for saving Tesla should go to Daimler. It was the Daimler investment that saved Tesla in early 2009. We didn’t get any DOE money until almost a year later. Around March 2010 was the first time we got DOE money, and the DOE money was specifically for Model S-related activity and moreover, had to be audited by [Price Waterhouse Cooper] and then we have to submit audited statements after having paid people. It’s not like we could pay money in advance. We had to pay suppliers and then get an invoice and then PWC would check that the invoice was correct and applied only to the Model S program and then we would get reimbursed, so there was a three-month gap between when money was spent and we would get reimbursed for it. So it was impossible to consider it a bailout for Tesla. If we’d needed money to be bailed out the Roadster, we’ve have been screwed.



tesla daimler deal



ABG: That leads to my next question, which is that especially start-ups, but every company walks that line on the edge of bankruptcy at certain times.



Musk: 2007 and 2008 were especially bad for us.



ABG: So that’s the question, how close was that? Without Daimler, it probably would have stopped?


There were a couple of near-death situations. One is where I had to basically take all of my personal reserve capital in 2008 and invest that in Tesla. I literally had to borrow money for rent.

Musk: Extremely close. There were a couple of near-death situations. One is where I had to basically take all of my personal reserve capital in 2008 and invest that in Tesla. I literally had to borrow money for rent. And that’s a whole saga that eventually should be told. It was a difficult thing that was made more difficult by one of our investors who was just an absolute bastard, nobody should ever take money from them. So I was totally tapped out. That was enough to get us through the second half of 2008 and into early 2009 and then, thankfully, Daimler, with whom we had a small deal to produce battery packs for the Smart [ED] actually invested $50 million into Tesla in the nick of time. It wasn’t some huge altruistic gesture, but nonetheless, they had to have faith that their $50 million wouldn’t go down the drain.



ABG: At that time, did they know how in trouble Tesla was?



Musk: Yes. They had total access to our financials, sure.



ABG: Even with that they said this was worth it because they liked the technology?



Musk: Yeah. There was the potential to get an investment from another car company – not Toyota – but I don’t know if they would have actually followed through or not, but they did express interest. I think Daimler was maybe aware of that. Either way, they put $50 million into Tesla at a time when they themselves were cash strapped. Dieter Zetsche had to go to Abu Dhabi and raise emergency cash for Daimler and then reserve $50 million for Tesla. When someone is hungry themselves and they give you a bit of food, you’ve got to be grateful for that.



ABG: What would you say is Tesla’s financial situation now?



Musk: I actually think Tesla is in a pretty good position. In principle, if we raise no further funding, Tesla should be able to reach cash-flow breakeven, so that’s kind of where we are right not. It’s a public company, so you can see our financials. We’ve got a couple hundred million dollars. If we make a bunch of screw-ups, then we’ll be in trouble, but if we execute reasonably well, then we’ll be in good shape. As I mentioned in the last earnings call, we are considering doing a small financing round just to improve the cash cushion, just in case bad things happen, but hopefully that’s money we’ll never use. We might go something like that, but it’s not yet approved by the board.



ABG: You’ve talked about the Karma, both today and recently in very clear statements and you can see how things can spiral out of control.



Musk: It’s a bit ridiculous, because my opinion of Fisker and the Karma has not changed in the last two years. It’s been exactly the same thing. Automobile just asked me for my opinion, it’s not like I was volunteering it or sort of intentionally lobbing stones. If I’m asked a question, I try to give an honest account of how I feel. But a lot of people in the media treated it as if I, of my own accord, launched some missile at Fisker. It was part of a longer interview. This is really not news. This is an opinion that I’ve expressed in the past, but I guess there were a lot of people who were not aware.



ABG: Plus it’s August…


It’s a slow news day when Bloomberg reports that Tesla opened a service center in San Rafael. I mean, c’mon.

Musk: It’s a slow news day when Bloomberg reports that Tesla opened a service center in San Rafael. I mean, c’mon. It was on Google and Yahoo Finance that we were opening a service center in San Rafael. We’re opening twenty.



ABG: Speaking of the media, so far, everything about the Model S, from the media who got to drive it at the launch to customers, has been entirely positive –



Musk: 99 percent positive.



ABG: Yeah. But the overwhelming message is that this is a great car, so wouldn’t there be a great incentive to try to get even more people into the car?



Musk: Yeah, and we just did 5,000 test drives. That’s pretty significant. But there is a shortage of cars. We need to provide cars to all of our stores for customer test drives, then we need cars for service, cars for endurance and quality and then we need to deliver cars to customers who have been waiting for a long time. So we just don’t have a lot of cars to lend for days on end. We will do that, increasingly in the coming months. This is not in any way trying to hold back. We’re trying to make each car as perfect as possible. Since each car is literally like 98 percent new. Usually, when people say it’s the all-new blah-blah-blah, whatever car, that’s bullshit. 40 percent of that car, if not 60 percent of that car, if coming from some parts bin. In our case, two percent is coming from the parts bin. There are some Mercedes components, like the steering column and the light switches and some of the internal bits but, literally, 98 percent is totally new, the components are in nothing else on earth. So, of the 98 percent new stuff, 90 percent of those components, no problem, we can scale up to high-volume immediately. Five of those are slightly problematic. Two percent are problematic and one percent are really problematic and causing us headaches. Putting it all together and making sure you assemble this incredibly complex puzzle in the right way, is tricky.







ABG: What are some of the parts on that one or two percent list?



Musk: Well, I don’t want to get suppliers mad at me, but some of them are some pretty big name suppliers and you think, “How the heck can this big-name supplier not get their shit together?” and I call the CEO and he’s like, “I promise I’ll get my shit together,” and I’m like, “Your shit is not together.” It’s quite vexing. In some cases, we’ve got some small suppliers where they’re going their absolute best but we’re asking them to do things they’ve never done before. One example is the bright molding around the window of the Model S. We have a continuous arc all the way to the back. It’s really big. It goes all the way from the A pillar all the way across to the C pillar and then under. It’s this huge, single piece part. If we did it like other manufacturers, we’d have seams, and seams suck and I was unwilling to have seams. So it was quite tricky to make that whole thing as one piece and then ship it and not have any warping or damage and then put it on in the right way. It’s awesome, because it’s the best bright molding of any car. Go and look at the bright molding on a BMW or something and you’re like, “that sucks.” So that’s pretty hard to make this huge continuous piece and not just have some crap that is usually done. Normal suppliers couldn’t do it, so we went to a specialty supplier and we worked with them to figure out how to get us a special weld in there and they are really doing a good job and they’re good guys, but it’s just tricky to scale that up. Everyone else just takes the easy path and has gaps in their bright molding.



ABG: You mentioned Mercedes. There was also talk about the B-Class E-Cell. We haven’t heard much about that? What’s the status of that program?


The B-Class E-Cell is not a marketing or a demonstration program. It is a serious, high-volume program.

Musk: Tesla policy is, when we’re supplying powertrains, we take a back seat on PR. It’s about our customer in that case, so it’s really up to Mercedes and Daimler how they want to portray things and what announcements they want to make, whether they even want to talk about our stuff or not. We’re just trying to be helpful to the electrification of cars and it’s whatever our customer wants in that case. We never want to be out in front of our customer since it’s really, fundamentally, their car. I can repeat the stuff that they’ve said, which is that it’s a big program, it’s not a marketing or a demonstration program. It is a serious, high-volume program.



ABG: I know it’s bigger than the Smart ED program.



Musk: By an order of magnitude.



ABG: How about work on future projects. I know Model S is the focus, but what about the Model X and the pickup truck? And we also have the next-gen roadster?



Musk: (laughs) I think we definitely want to avoid talking about distant products too much. In the case of the Model X, the reason why we unveiled that relatively early was just to show that Tesla is not going to be a one-trick pony but, in general, we’re going to make product announcements a lot closer to product introduction.







ABG: I haven’t seen that car and those doors in action, but the intent is still to bring them into production?



Musk: Oh, yeah, absolutely. You should see it. It’s a double-hinged gull wing – falcon door, whatever, it literaly looks like a bird of prey when the doors are open, it looks like a falcon in a dive – and the reason that works, while a regular gull wing doesn’t work, is because in a regular gullwing we’d have the problem that the arc goes out too far and then too far up. But if you double-hinge it, it does this (makes a motion with his hands, similar to the video here). If you can physically fit between the next car and the Model X, like maybe a foot-and-a-half, you can open the door. In fact, you can open the door in tighter spaces than a minivan door, because a minivan door, when it opens, it’s going to come out and slide. If you’re trying to come at if from the back, you can’t get in. You have to go past the door and then press the button and, if anyone is behind you, they can’t get in.



ABG: Who’s idea was the door? Was it Franz [von Holzhausen, Model S chief designer] or was it an older idea that was never used or is it a Tesla original?


This is a problem I’ve had with all SUVs. You can’t get to the damn third row. The Audi Q7 is particularly horrendous. Even in the best case scenario, you need to be dwarf mountain climber to get into the back seat.

Musk: The desire to have that kind of door opening is coming from me because it’s important to frame the problem correctly. The problem is, how do you have a door that opens in tight spaces and is also able to access the third row without changing the seat back position of the second row. This is important because if you have a baby seat in the second row, you can’t get to the third row. This is a problem I’ve had with all SUVs. You can’t get to the damn third row. The Audi Q7 is particularly horrendous. Even in the best case scenario, you need to be dwarf mountain climber to get into the back seat. It’s ridiculous. It’s the most comically ridiculous third row I’ve ever seen. So, I wanted to be able to access the third row even if you have a child seat in the second row. I wanted to be able to step into the second row, so if you’re trying to put a baby or a toddler into the child seat in the second row – right now you have to do some backbreaking thing where you have to hold the kid and cantilever yourself over the back seat. For me, it’s fine, but if you’re a five-foot-six woman and you weigh 130 pounds and you’re trying to take your 30 or 40 pound kids and do this, it’s really hard. On the other hand, if you can step into the car and put the kid down, it’s much easier. There are a few ways to accomplish that. One is to do the double-hinge and the other is to do a double door, so you have part of it go down. It may have been Franz who came up with the double-hinge approach, I’m not sure, but the double-hinge one work better than the double opening. And so when I was shown the options, I said let’s do that one.



ABG: Shifting topics to Supercharging, we’ve heard about this for a while. Can you talk about why you’re going your own way and also the idea behind it?



Musk: The Supercharger will be available to both the 60-kWh and the 85-kWh packs. The 40-kWh pack is really designed for people who never expect to do long-distance journeys. And on the 60-kWh pack, it’s offered as an option and on the 85-kWh pack it’s offered as a default because, presumably, someone is buying it for potential long-distance trips. The reason for the Supercharger – we hope to do a big unveiling in late September or October, and I’ll fully articulate it then – but, essentially, the other charge systems don’t have enough power and in order to really charge fast, the charger needs pretty advanced technology and it needs to exactly match the pack. It’s got to be hand-in-glove. So we couldn’t use some generic system because it doesn’t really understand our battery pack and there’s a quarter as much power as we need. So we want to recharge at a rate of over 300 miles of driving per hour. That means you can stop for 30 minutes and charge almost three hours or driving.



ABG: Which is so far above what anyone else is even talking about.


The Tesla Supercharger is on the order of 100 kW. The Leaf has like a 6 kWh. So we’re talking about something 12 to 15 times more powerful.

Musk: Exactly. There’s nothing even close. The Tesla Supercharger is on the order of 100 kW. The Leaf has like a 6 kWh, that’s their high-speed charger. So we’re talking about something 12 to 15 times more powerful than the Leaf’s fast charge. That the approximate convenience inflection point for long-distance driving, three hours of driving for a 30-minute stop. Most people, if they time themselves, will find that’s their ratio, it’s three hours to 30 minutes. So, you’ll start a trip at 9 am. By the time you get to noon, you want to stop and gas up, use the restroom, grab a bite to eat, grab a coffee and then go on your way. If you actually time yourself, you’ll see it’s about 30 minutes. People always think it’s less than that, but it’s not. Occasionally, somebody’s a super-hardass and they want to drive for like six hours and wear diapers or something, I guess that’s not our target market. So that’s our target inflection point, 30 minutes of charge for three hours of driving. Over time, we’re going to make that better. We’ll get down to 25 minutes, 20 minutes, eventually under 20 minutes for three hours of driving.



ABG: Is that part of the excitement for you, to again be pushing what EVs can do?


If we can make an electric car that people think is better than any gasoline car, then they’ll buy it just because it’s the best car. Then we’re way beyond people who just care about the environment.

Musk: That’s our goal, absolutely. The fundamental good that Tesla will serve is as a catalyst for the advent of electric vehicles. We’ve got to address all of the concerns that people have about electric vehicles and the reason that the Model S be the world’s best car – not for some ego reason – is it’s got to show that an electric can can be a better car than any gasoline car. I wouldn’t actually care all that much about making the best gasoline car in the world. That’s, eh. But if we can make an electric car that people think is better than any gasoline car, then they’ll buy it just because it’s the best car and then we’re way beyond people who just care about the environment. That’s great, but for a lot of people, it’s just not their top thing, so that’s why it’s very important for us to achieve that, which means our quality has got to be fantastic, our safety has got to be top of the line and we have to address the long-distance travel issue, and that’s what the Supercharger is about. I certainly hope people copy us, that’d be great.



ABG: What does the actual physical charger look like?



Musk: Well, we’re going to unveil it, so I can’t tell you what it’s going to look like. The thing that’s awesome is that the socket on the Model S that is used for home charging, that same socket can take 100 kW, which is amazing. We’re designing sockets and plugs the way they should be designed. This has got to be the best power rating of any plug-socket combination in the world. But then there’s the charger itself, which has a shape that’s really cool.



ABG: Can you talk about any of that stuff right now?



Musk: We’ve had the Supercharger in testing since September of last year [2011] and it’s working really well. We keep refining the technology and this is the most advanced charging device on the planet. I think it’s appropriately named, recycling the term, obviously, from the gasoline world.



ABG: Where do you see the Superchagers being built?



Musk: Places where there’s pretty good food available. Existing highway rest stops. So you just park, plug it in, go grab a bite to eat and a coffee and you’re on your way.

By Sebastian Blanco

Driving the 2013 Smart Fortwo ED

2013 Smart Fortwo ED.Mercedes-Benz USA 2013 Smart Fortwo ED.

Of all the new features on the 2013 Smart Fortwo ED, including a larger battery pack and a more powerful motor, one is engineered to garner the most attention: its price.

Accounting for the maximum federal income tax credit of $7,500, the price of the 2013 model, scheduled to go on sale next spring, can be reduced from $25,750 to $18,250. From there, any available state subsidies could be applied. In California, where a zero-emissions-vehicle program recently awarded its 10,000th rebate, the price could potentially fall a further $2,500.

Even for non-Californians, the positioning makes the Fortwo ED the lowest-price battery-electric car on the American market. Donna Boland, a spokeswoman for Mercedes-Benz USA, said the company did not intend to “play games” and advertise the price inclusive of the tax credit.

Smart USA brought its electric cars to Brooklyn on Wednesday for test drives along the waterfront and around Prospect Park. It was a homecoming of sorts, as the company offered test drives of the second-generation car, which was only available for lease, in the borough in 2010.

According to Heiko Schmidt, a Smart product manager, Tesla Motors, which supplied the battery and other components for the Mercedes-Benz B-Class E.V. on display at the Paris motor show, was not producing the battery for the updated and upgraded Fortwo ED. Instead, the vehicle will ship with a 17.6 kilowatt-hour battery pack from Deutsche ACCUmotive, a subsidiary of Daimler, owner of the Smart brand.

At peak output of 55 kilowatts, the motor can produce 74 horsepower in two-minute bursts. The motor, according to Mr. Schmidt, is produced in a joint venture with Bosch. Charging the battery from depleted to full using the 240-volt charger, a $1,300 option, would take about six hours. A driver would reach a 20 percent to 80 percent level of charge in 3.5 hours, Mr. Schmidt added. Though Smart USA asserted the Fortwo ED’s travel range on a full charge would be 90 miles, the estimate had not yet been corroborated by the Environmental Protection Agency.

The result is a vehicle that feels quick off the line, with an available 100 pound-feet of torque and a manufacturer-estimated run from zero to 60 miles per hour in 11.5 seconds, an improvement of 50 percent over the second-generation car, Mr. Schmidt said. It would also make the Fortwo ED quicker than a standard Fortwo, as observed by Edmunds. Top speed of the electric car is about 80 m.p.h. The Brooklyn streets were best for stop-and-go, so the Smart’s highway prowess was untested.

The utilitarian interior of the Fortwo is retained, with the addition of battery-related gauges and a touchscreen.Jim Motavalli The utilitarian interior of the Fortwo is retained, with the addition of battery-related gauges and a touchscreen.

The interior of the Smart does not vary greatly from that of the standard car, and the battery pack, mounted under the floor, does not intrude into what little storage space is available. Information on the car’s state of charge and power demand is available from two dash-mounted instruments that resemble tachometers, and the driver can check miles-to-empty and set charging times using a small display.

The options list for the Smart has not been published, but drivers would be able to order paddles mounted behind the steering wheel that controlled how much regenerative braking the car deployed, a useful feature, I found. Choosing extra “regen” extended the car’s range and also reduced the need to use the brake pedal. In any mode, the car was quiet, with only a minor amount of motor whine. Being tiny, it was easy to whip around corners and fit into tight spaces.

Smart USA, having come under the purview of Mercedes-Benz USA in 2011 after the Penske Group relinquished control of the brand, is in recovery mode. Tracey Matura, the general manager of Smart, said the company had 89 dealers, up from 75 when Mercedes took over 15 months ago. Smart sold 1,030 cars in September, an improvement from earlier rock-bottom results and up 120 percent from the same month last year.

Ms. Matura added that Daimler’s plant in Hambach, France, would be able to meet the demand for electric Smarts, should that demand materialize.

The new car is available for sale or lease, but the lease price is not yet available. The rate ought to be far more approachable than the $599 a month charged for the second generation, of which just 250 were made available to consumers in the United States. A further 300 of the second-generation E.V.’s went into service in San Diego in the fleet of Car2Go, a car-sharing service backed by Daimler.

The microcar would also be offered in Cabriolet form for $28,750, giving the company another distinction in the absence of the discontinued Tesla Roadster: the only mass-produced electric convertible in the United States.

Smart is encouraging consumers to preregister their interest in the Fortwo ED on a dedicated Web site.

The E.V.'s, on display in the Dumbo neighborhood of Brooklyn on Wednesday.Jim Motavalli The E.V.’s, on display in the Dumbo neighborhood of Brooklyn on Wednesday.


This post has been revised to reflect the following correction:

Correction: October 5, 2012

An earlier version of this post incorrectly stated the output of the Smart ED’s motor. At peak output of 55 kilowatts, it produces the equivalent of 74 horsepower, not 47 as initially written.

By JIM MOTAVALLI

Wheelies: The Eastbound Edition

Volvo and its parent, Geely, are expected to announce a joint partnership in March. Above, Stefan Jacoby, the Volvo president and chief executive, introducing the Concept Universe sedan at the Shanghai auto show last April.Carlos Barria/ReutersVolvo and its parent, Geely, are expected to announce a joint partnership in March. Above, Stefan Jacoby, the Volvo president and chief executive, introducing the Concept Universe sedan at the Shanghai auto show last April.

In which we bring you motoring news from around the Web:

• Volvo is expected next month to announce a joint partnership with its owner, the Chinese manufacturer Geely, to build cars for the Chinese market. Though Geely holds a majority stake in the Swedish automaker, Volvo must partner with a local manufacturer to legally produce and market its cars in China. If approved, the joint venture would base its operations in Chengdu, located in China’s southwest. (Bloomberg)

• Smith Electric Vehicles, the Missouri-based producer of purely electric commercial vehicles, recently announced its intention to form a joint venture with Wanxiang Group, one of China’s largest automotive component manufacturers. Wanxiang would initially invest $25 million and, under the terms of the venture, up to a further $75 million to produce and commercialize the vehicles in China. Smith, with international clients like PepsiCo and Coca-Cola, recently announced its plan to open an assembly plant in the Bronx. (Smith Electric Vehicles)

• General Motors has appointed Jon Lauckner as its new chief technology officer, effective April 1. He will replace Tom Stephens, who recently announced his retirement. Mr. Lauckner, currently the president of G.M. Ventures, the venture capital arm of the conglomerate, was also tipped to assume leadership of Research and Development for G.M., a responsibility held by Alan Taub, who also recently announced his retirement. (General Motors)

• Former Nascar Sprint Cup driver Jeremy Mayfield was charged this week with three felony counts of theft stemming from a search that took place at his home in North Carolina last November. In his defense, Mayfield said the charges were based on statements from a source with a substantial criminal record. Mayfield was suspended from Nascar after failing a drug test in 2009. (ESPN, via The Associated Press)

• An amended libel charge brought by Tesla Motors against the BBC, the producer of the television program “Top Gear,” was dismissed by a London judge on Thursday. The electric vehicle manufacturer initially sued the broadcaster in March after a “Top Gear” segment aired in which the Tesla Roadster was said to have achieved 55 miles of range on the program’s test track, significantly less than the 200 miles or more claimed by Tesla. An earlier libel charge brought by Tesla was dismissed in October last year for being insubstantial. (Top Gear)

By THE NEW YORK TIMES

Reviewing the Toyota RAV4 EV

2012 Toyota RAV4 EV.Bradley Berman for The New York Times2012 Toyota RAV4 EV.

In Sunday’s Automobiles section, Bradley Berman reviews the 2012 Toyota RAV4 EV, a purely electric version of the compact crossover with a drivetrain sourced from Tesla Motors.

The RAV4 has always been respectible, if not a standout in its crowded segment. A power-source transplant, however, works wonders for the Toyota’s on-road personality, as Mr. Berman writes:

I punched the Sport button on the all-electric Toyota RAV4 EV that I had been driving for two days and slammed the accelerator to the floor. The burst of power — in a blink it kicked me past the 75 m.p.h. traffic in the fast lanes — was not what I expected from a small battery-powered crossover.

The electric surge was transformational. Still gaining speed at a good clip, I could easily have zoomed to the 100 m.p.h. top speed listed in Toyota’s specifications.

Though only 2,600 units of the RAV4 EV will be produced, Mr. Berman expects the car’s cult to grow well beyond the constraints of that modest number.

Read the entire review, check out the slide show and share your thoughts on the RAV4 EV in the comments.

By THE NEW YORK TIMES

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 Unveils Model X at Its Southern California Design Studios

Elon Musk, chief executive of Tesla Motors, with the Model X prototype on Thursday.Jerry Garrett for The New York TimesElon Musk, chief executive of Tesla Motors, with the Model X prototype on Thursday.

HAWTHORNE, Calif. — On Thursday, Tesla Motors unveiled a prototype of its third vehicle, the Model X, here at the company’s design studios. Elon Musk, the chief executive of the electric-vehicle start-up, said the crossover-like car would enter production in late 2013.

“This is kind of the killer app for families,” Mr. Musk said of the X in an interview after a preview for media. “It has more utility than a minivan, and better performance, much better performance, than an S.U.V.”

With a shape evocative of recent premium crossovers like the Acura ZDX and BMW 5 Series Gran Turismo, the Model X fits within a popular niche. Its copious interior space, however, aligns it more closely with minivans and S.U.V.’s.

“Because it is an electric car, and we don’t have to package a traditional internal combustion engine powertrain, we have available to us much more packaging opportunities,” Mr. Musk said.

The new model was shown weeks after the announcement of two high-ranking engineers’ departures sent Tesla’s stock price falling sharply before it rebounded the following week. News of the Model X also came days after Fisker Automotive, another start-up, announced it would not meet sales benchmarks outlined by the Energy Department in the $529 million loan it extended to the company in 2009, and would lay off dozens of workers. Tesla received a loan of $465 million from the department that same year.

Problems with cash flow plagued Tesla as it tried to deliver its first product, the Roadster, but contracts to supply electric power trains to companies like Daimler and Toyota, as well as a lucrative I.P.O. in 2010, have given the company more solid financial footing.

The Model X evokes other premium crossovers, particularly the Acura ZDX and BMW 5 Series Gran Turismo.Jerry Garrett for The New York TimesThe Model X evokes other premium crossovers, particularly the Acura ZDX and BMW 5 Series Gran Turismo.

A signature feature of the Model X, destined for the production model, Mr. Musk said, was the so-called falcon-wing doors for rear passengers. Like a traditional gullwing door, they open upward, but a hinge in the middle allows the leading edge of the door to remain tucked closely to the car.

“You can get in and out in the tightest garage or parking spot without hitting the wall or car next to you, or your head,” Mr. Musk said.

The Model X has two trunks: one in the rear and another under up front, where the engine would otherwise be found. “Some S.U.V.’s and minivans claim to have room for seven passengers,” Mr. Musk said. “But if you fill them with people, there is no room for their luggage. The Model X offers ample room for seven adults, and their luggage.”

Like the Model S sedan, which is expected to arrive in showrooms this summer after numerous delays, the Model X conceals its batteries in the platform of the car. Electric motors spin the front and rear wheels independently. “It has an innovative all-wheel-drive system that is incredibly precise and accurate in its application of power and traction, much more so than any other type of all-wheel-drive out there,” Mr. Musk said.

The Model X shares about 60 percent of its content with the Model S and weighs about 10 percent more. As a result, Mr. Musk said, the X would squeeze roughly 10 percent less range from its battery packs. The X would be offered with a choice of two packs, rated at 60 and 85 kilowatt-hours. For comparison, Tesla estimates a Model S can travel 160-300 miles on a full charge, depending on battery-pack specification.

“Even though the X is heavier, it will still go zero to 60 miles an hour in about 4.4 seconds,” Mr. Musk said. “And that’s not even the Performance model.” Pricing should be close to Model S territory, he added. That model starts at $49,900 after a $7,500 federal tax credit, but the price can approach $100,000, depending on options.

“This will be our most important, and highest-volume car, when it comes out,” he said. A fourth model, aimed at a lower price point and wider audience, would likely be announced in 18 to 24 months, he added.

The prototype's interior, with a central digital interface similar to that found in the Model S.Jerry Garrett for The New York TimesThe prototype’s interior, with a central digital interface similar to that found in the Model S.

By JERRY GARRETT

Reviewing the Tesla Model S

2012 Tesla Model S.Tesla Motors 2012 Tesla Model S.

In Sunday’s Automobiles section, Bradley Berman reviews the 2012 Tesla Model S in a more thorough manner than any other journalist has yet.

In addition to driving the electric sport sedan in the vicinity of his home in Northern California, he takes his test car, fitted with a 362-horsepower drivetrain and 85-kilowatt-hour battery pack, from the north shore of Lake Tahoe to Tesla’s design studios in Southern California, driving 531 electric-only miles in a single day.

Along the route Mr. Berman avails himself of charging stations erected by Tesla in strategic locations around the state, a process he also describes in Sunday’s Automobiles section.

Mr. Berman has quibbles with the rear lighting, impractical sun visors and a lack of grab handles above the doors for passengers. Beyond these, however, he finds the Model S to produce a thrill that — if it can be transferred to higher-volume, lower-price vehicles — could very well be game-changing for the industry.

Read the entire review, check out the slide show and share your thoughts on the Model S in the comments.

By THE NEW YORK TIMES

Daimler Deserves Credit for Saving Tesla Says CEO

American electric automaker Tesla is enjoying great success, at least in terms of the EV market, and its CEO Elon Musk credits Daimler for saving the automaker in its time of need.

Three years ago, Daimler invested a hefty $50 million into Tesla Motors, a move that surprised even the most enthusiastic Tesla supporters. In a recent interview, Elon Musk revealed that Tesla Motors would now be extinct if Daimler hadn’t stepped in with its funding. In Musk’s own words, “There were a couple of near-death situations.”

Surprised? The bold CEO now has no problems sharing his thoughts on competitor Fisker, and Tesla is clearly heading towards in the right direction. Had Daimler not stepped into the picture however, we wouldn’t be speaking about Tesla at all today, and who knows where Musk would be in terms of finances.

Thankfully Musk confirmed that Tesla’s financial status is “pretty good” and we should be seeing plenty more from the automaker for years to come.

[Source: Autoblog]

By Jason Siu

For Tesla Motors, One Supercharger to Bind Them

Elon Musk, chief executive of Tesla Motors, introducing the Supercharger on Monday in Hawthorne, Calif.Tesla Motors Elon Musk, chief executive of Tesla Motors, introducing the Supercharger on Monday in Hawthorne, Calif.

9:39 p.m. | Updated

On Monday night at its design studios in Hawthorne, Calif., Tesla Motors introduced its Supercharger, a glittering monolith capable of bringing the battery of a Model S sedan from flat to full in about an hour.

Elon Musk, chief executive of Tesla, has always known how to manufacture excitement around the company’s products, and the introduction of the 480-volt Supercharger was attended by enough smoke and lasers to suit a reunion of Spinal Tap. Mr. Musk said the chargers would dispense free electricity generated without emissions through a partnership with SolarCity, a builder and installer of photovoltaic equipment led by Peter and Lyndon Rive, cousins of Mr. Musk. The Tesla executive is also SolarCity’s chairman.

The Supercharger will be installed at solar carports loosely resembling filling stations and are capable of charging several vehicles simultaneously, as well as returning surplus power to the grid. Khyati Shah, a spokeswoman for SolarCity, wrote in an e-mail that two of the six Superchargers already installed had solar capability, with the others running off of grid power. One solar unit is 24 kilowatts and the other is 26.

Mr. Musk said the Supercharger network would address some anxieties that might be inhibiting wide consumer adoption of electric vehicles, including concern about power-plant emissions related to charging; the cars’ inability to travel long distances; and operational costs. The Supercharger will charge at 100 kilowatts and eventually up to 120 kilowatts, he said. “What it means is that you can drive for three hours, stop for less than half an hour, recharge, and be ready to go again,” Mr. Musk said. A Model S would reach a state of half-charge in 30 minutes.

The system is not compatible with existing Level III fast chargers. It complements elements of the company’s charging system unveiled earlier, including the high-power wall unit and plug design the company demonstrated for Wheels last year.

Tesla has six Superchargers in operation, all in California, with more to come in the state by the end of the year. The first stations are expected to be opened to the public in coming weeks.

Mr. Musk said the company intended to have Superchargers installed across much of the United States in the next two years and to have the entire country, and the lower part of Canada, covered in four or five years.

The ability to connect to the Supercharger will be standard on Model S cars with the 85-kilowatt-hour battery, the highest-capacity battery marketed by Tesla, and would be optional for buyers of the sedan fitted with the 60-kilowatt-hour pack. That said, Model S sedans equipped with the 40-kilowatt-hour batteries, and the existing fleet of Tesla Roadsters, will be excluded from using the Supercharger.

Mr. Musk said Model S customers with the necessary equipment would “travel for free, forever, on pure sunlight. It’s pretty hard to beat that.” Not one to understate the company’s accomplishments, he said the Supercharger’s introduction was likely to “go down as being quite historic, at least on par with SpaceX docking with the Space Station earlier this year,” a reference to his space-freight venture. “I really think this is important.”

By JIM MOTAVALLI

Wheelies: The Dealer’s Dilemma Edition

A Tesla Motors store in Scottsdale, Ariz.Tesla Motors A Tesla Motors store in Scottsdale, Ariz.

In which we bring you motoring news from around the Web:

• Dealer associations around the United States have lodged formal protests against Tesla Motors, claiming the company has violated state laws barring manufacturers from operating dealerships. Tesla has opened stores in 10 states as well as in the District of Columbia, without the involvement of franchisees. Some dealers fear the Tesla retail model, if successful, could set a precedent that other manufacturers might follow for their electric-vehicle offerings. (Automotive News)

• Volkswagen Passenger Cars has delivered roughly 4.2 million vehicles worldwide in the first three quarters of 2012, the first time the brand has eclipsed 4 million deliveries during the first nine months of the year. Through September in the United States, sales of VW vehicles are up 37.2 percent over the similar period in 2011. Volkswagen Group has the stated goal of becoming the highest-selling automaker in the world by 2018. (Volkswagen AG)

• Honda announced on Tuesday it, along with Toyota, Hyundai and Nissan, had signed a memorandum of understanding with Norway, Sweden, Iceland and Denmark intended to ease the introduction of fuel-cell vehicles in those markets. Much of the agreement pertains to the countries’ commitment to developing hydrogen refueling infrastructure for the vehicles. The Nordic countries, along with Japan and the United States, expect to take delivery of fuel-cell electric vehicles from the four automakers by 2015. (Honda)

• Reeling from anti-Japan sentiment in China over a land dispute, Toyota’s sales in the country fell by 49 percent, and Nissan’s by 35 percent, in September from their levels last year. Meanwhile, Chinese customers gravitated toward cars from Volkswagen, Hyundai and Kia. The shunning of Japanese brands stemmed from a territorial dispute between China and Japan over islets in the East China Sea, which devolved into riots last month, causing some plants and dealerships for Japanese automakers in China to temporarily close. (The New York Times)

• The Southern California Timing Association recently certified a modified Volkswagen Jetta Hybrid as the fastest production-based car with engine displacement under 1.5 liters with forced induction. The hybrid, which was tuned to produce roughly 300 horsepower compared with the production car’s 170, averaged 186.313 miles per hour over two runs on the Bonneville Salt Flats in Utah, breaking the record set by the same car in August by nearly 19 m.p.h. (Volkswagen)

By THE NEW YORK TIMES