BusinessWeek: Can Tesla Become a Real Automaker?

[cwerdna]

Can Tesla Become a Real Automaker? - BusinessWeek

[ceric]

In comparison, I think Fisker has a better chance to survive based on his business model and long term experiences in auto industry. It is like in a Marathon, the guy who is ahead early usually does not win at the end. Just my HO, of course.

[efusco]

Some interesting quotes.

"The business model is wrong," says James N. Hall, principal of 2953 Analytics, a Detroit-area auto consultancy. "The prices of their cars are too low for the kind of technology they want to sell. You have to sell a lot of them. As production goes up, they will realize how undercapitalized they are."

and
Tesla's final loan repayment to taxpayers would be made in 2022, CEO Elon Musk said in a conference call with journalists. Musk says the company has lowered the cost of its $101,500 roadster to $80,000 per car, not including overhead. He says Tesla should start making money in July.
The margins will be scant—even when the Model S comes out or if Tesla manages to realize Musk's dream of selling an affordable third-generation electric car that will sell more than 100,000 units annually. "The goal is to make margins relatively lean to make the price of the cars as affordable as possible," Musk said.

I had not heard about the lowered cost...that's a new tidbit.

[hill]

Originally Posted by ceric

In comparison, I think Fisker has a better chance to survive based on his business model and long term experiences in auto industry. It is like in a Marathon, the guy who is ahead early usually does not win at the end. Just my HO, of course.

I'd wait 'till their up & running ... IF they get up & running, before I'd claim their plan is better. On a side note, I read Tesla sport car buyers have a special 1st in line status, for the sedan (along with another 1,000 or so investers who also have priority). So the sedan wait may take longer for the average shmoe.

[JimN]

GM & Chrysler are excellent role models--of how not to do things. I wonder what Hall has to say about the business models of GM & Chrysler.

[daniel]

Originally Posted by hill

... I read Tesla sport car buyers have a special 1st in line status, for the sedan ...

1st gen Prius owners were given the chance to be first to get the 2004, and at least some 2nd gen owners were given the opportunity to be first to buy the 2010.

While Roadster owners have first crack at the Model S, it is unlikely that a very large number of them will accept that offer, because the cars appeal to very different buyers: The Roadster is aimed at the extreme speed addict, while the S is aimed at the upscale family interested in electric. Some will take the offer, but I doubt it will delay delivery very much for folks like Evan. OTOH, if you didn't get your name on the list early, you could have a long wait as that list grows.

The Model S will probably be a much nicer car than my Porsche, and cheaper, but I'm driving now, while Evan and others on the Model S list have several years to wait.

[efusco]

Originally Posted by daniel

1st gen Prius owners were given the chance to be first to get the 2004, and at least some 2nd gen owners were given the opportunity to be first to buy the 2010.

While Roadster owners have first crack at the Model S, it is unlikely that a very large number of them will accept that offer, because the cars appeal to very different buyers: The Roadster is aimed at the extreme speed addict, while the S is aimed at the upscale family interested in electric. Some will take the offer, but I doubt it will delay delivery very much for folks like Evan. OTOH, if you didn't get your name on the list early, you could have a long wait as that list grows.

The Model S will probably be a much nicer car than my Porsche, and cheaper, but I'm driving now, while Evan and others on the Model S list have several years to wait.

There are basically 3 levels of priority--
S-The signature Series cars--they should be fully loaded plus some extra features. These required a $40,000 deposit. There seem to be around 120-130 people that went this route.

R-Roadster owners and Roadster owner friends and family. A member here at PC that is a Tesla Roadster buyer (should take delivery soon) was kind enough to let me use one of his F/F spots so I am #77 on this list, there seem to be around 180 or so people in this group. $5000 deposit

P-(no idea why they used a P for this designation)-The standard wait list. $5000 deposit.

While the S list could expand some and thus push the rest of us back a little, I don't think there are a lot of people willing to put down $40k. The R list is locked, they're still taking deposits for the P list, your name will be added to the end, currently at about 1000 I think.

[daniel]

Originally Posted by efusco

P-(no idea why they used a P for this designation)

People?
Peoria?

[JimN]

Originally Posted by daniel

People?
Peoria?

P is for Production. The number I have.

[ljbad4life]

Articles like this really rub me the wrong way. I always take what businessweek says with a large grain of salt. First the chasing after large profit margins is what got GM and Chrysler into the problems they are in now. Building SUVs (which are high margin) and forgetting about smaller cars (lower margins). It is clear that gasoline/diesel usage is not the way the market is trending in the long term. Tesla is focused on the long term to establish themselves as a front runner in the EV market. Tesla is a real car company producing cars albiet at low volume, but so does Ashton Martin.

I have way more faith in Tesla's business model and up coming model s (7 seater with 0-60 time of ~5 sec) vers the GM volt (4 seater thats trying to be sporty) for very similiar pricing. Tesla already has experience with ev. GM doesn't has experience with the series hybrid that is in the volt. there are bound to be bugs/kinks. At this point Tesla should have worked most of them out.