Since meeting the guys at Tesla Motors in August 2006, we've kept close tabs on what the San Carlos-based electric car company is up to. Tesla quickly became the green car 'poster child', proving it was possible to build a car brand from scratch, and whip the public into a froth about the notion of a cool, clean, fast car.
Yet recent news hasn't been too good. Having decided not to build their next car - the 'Model S' - in New Mexico, Tesla planned to move the site of a new factory to San Jose, California. Yet last week came the news that this wasn't happening either - Tesla basically can't raise the money. This after the difficult birth of said Model S - originally to be penned by ex Aston Martin styling boss, Henrik Fisker. However, he left, established his own EV start-up and was promptly threatened with legal action by Tesla, who accused him of deliberately producing sub-standard work. Chairman Elon Musk put himself in charge of the model's styling, which he claimed needed to be reworked form scratch, before luring Mazda designer Franz Von Holzhausen to head up a new design studio.
More recently, Musk has installed himself as the CEO of the company, and claims that the Model S's arrival will be further delayed unless Tesla gets access to Federal loans. And last week came the hammer blow news, that rather than the $109,000 dollars Tesla charges for its existing Roadster model, an audit apparently revealed that it's actually costing the company more like $140,000 to get a car on customers' drives.
Musk's response was to raise prices, and strip out some of the extras that originally came standard with the car - customers were supposed to get a home-recharging kit installed for free - but now, even those who have a pre-existing deposit down on the car, will be made to pay extra for stuff like this. With this coming after the company laid off staff, and the car suffered an embarrassing and very public couple of 'hiccups' while being reviewed on Top Gear, people have begun to make serious accusations...
Silicon Valley blog "Valleywag" ripped into Musk, questioning whether his running of Tesla, would turn the company into a modern day 'Tucker'. Preston Tucker, who is often mentioned in the same breath as John Delorean - designed and developed an advanced new car in the 1940s. But he got himself into financial troubles, becoming so 'inventive' with money, that he was eventually accused of fraud (he was later acquitted) - the company ultimately failing.
Clearly, what happens next at Tesla is far from certain. So yesterday, Mark and myself got together to discuss what was going on, what it all means - and what we thought could happen next. Let us know your opinion once you've checked out the video below:
We hope Tesla makes it. A car company that made shockwaves throughout the industry, captured the public's imagination in a way that established car companies rarely do, and essentially trail blazed a route for EVs that many others now appear to be driving up, deserves success. And ultimately, three years after the world first heard of Tesla, we still can't think of a car we'd rather drop into, mash the throttle to the floor and charge off in (pun intended) than a Tesla Roadster.
Image: Jurvetson on flickr under creative commons license
Posted by Joseph Simpson on 5th February 2009
It's Pete and Dud!
Ahem. I agree that Tesla will probably have to go down the route described. I think to compete with not just the likes of other small EV manufacturers but also the mainstream guys will be tough in this environment.
In the same way that Tesla made the likes of the G-Wiz and NICE an irrelevance, the advances made by GM, Ford, Toyota, Honda and some Chinese manufacturers will make a $100K EV extremely niche. The Lotus comparison is a good one - there's still a place, but I think Tesla have run out steam.
Posted by: Robin Brown | February 06, 2009 at 11:04 AM