Tesla Motors To Suspend Roadster Production

Wyatt Earp writes with news that a recent SEC filing from Tesla Motors revealed the company plans to stop production on its electric Roadster (and the Roadster Sport as well) in 2011. This will leave the automaker without any cars to sell until the launch of its Model S sedan (financed in part by $465 million in DoE loans) in 2012. Tesla plans to resume production of Roadster models "at least a year" after the Model S arrives. From Wired's Autopia blog: "'As a result, we anticipate that we may generate limited, if any, revenue from selling electric vehicles after 2011 until the launch of the planned model S,' the company says in the SEC filing. That may not be a problem if S production starts on plan and goes off without a hitch, but if Tesla hits any snags, things could get ugly fast — a point it concedes in the filing. 'The launch of the Model S could be delayed for a number of reasons and any such delays may be significant and would extend the period in which we would generate limited, if any, revenues from sales of our electric vehicles.'"

Comments

Re:Uh oh

[Anonymous Coward]

There isn't anything for them to prove. They aren't an alternative.

It's either price or range. Can't have both. I'm not spending $50k+ on a vehicle and I'm not driving one with less than a 300mi range.

Killing yourself with good intentions

[BadAnalogyGuy]

When Subaru came out with their 2010 Legacy model they brought out the big guns and re-engineered the body design completely. Subaru redesigns the Legacy on a five year timeline and instead of building on the tried and true Legacy platform, they designed the new Legacy around the WRX STi platform. The result is a car with a great engine, large interior, and aggressive styling.

The other result is terrible sales.

No one likes the new exterior. It resembles Honda's generic styling more than Subaru's conspicuously different styling. No one buys a Legacy because they want to drive an Accord.

You can't build a city by burning it to the ground. You need at the very least a Granary and a Marketplace so that you can grow your population while making income. This allows you to finance all the other fun stuff you want to do like developing war trolls or building sorcerer's guilds. Without the basic income stream, you're just going to get screwed when some bear rushes in and eats all your citizens because you don't have even a single halberdier around to guard the town.

This is a bad idea that will put Tesla out of business soon. I feel almost bad for all the people who prepaid.

More Publicly Financed Toys for the Wealthy

[CodeBuster]

The Tesla model S sedan will retail for $50,000+ which means that less than 20% (and that is being very generous) of Americans will be able to afford this car. Tesla is a niche and it will always be niche. The best that they (and the taxpayers) could hope for is for them to be bought by one of the major auto manufacturers. Why should the taxpayers be financing car production by boutique manufacturers for wealthy people? If the government subsidizes heavily so that average people can buy this particular car then you have to explain why the government should be in the business of picking winners and losers in the market for private automobiles. If Tesla is such a good investment then why cant they raise $450 million from the private equity market instead of from taxpayers; 99% of whom will never sit behind the wheel of a Tesla?

Re:More Publicly Financed Toys for the Wealthy

[Thing 1]

Tesla is a niche and it will always be niche.

Agree, and strongly disagree.

"Cars are a niche, people will always ride horses for transportation."

"Computers are a niche, they take up a whole room, there isn't really demand for more than six or so of them."

"Planes are a niche, they're useful in war but that's about it."

We the taxpayers should finance this company, and not bail out the "big 3" (two, really, Ford didn't need as much help), because they're proving that they can make something revolutionary that will work its way down to being affordable to everyone. The big 3 are just doing more of the same. And slower.

And besides, it's not a gift, it's a loan.

Re:More Publicly Financed Toys for the Wealthy

[avilliers]

The Tesla model S sedan will retail for $50,000+ which means that less than 20% (and that is being very generous) of Americans will be able to afford this car. Tesla is a niche and it will always be niche. The best that they (and the taxpayers) could hope for is for them to be bought by one of the major auto manufacturers. Why should the taxpayers be financing car production by boutique manufacturers for wealthy people?

It's new technology; even if this model never takes off the expertise can spill over. It's not like giving money to Ford to keep more Mustangs on the street. It's a potential benefit even if the parent business fails.

It's a pretty good way encourage technology development. A lot of private people think they may be able to make it profitable eventually, they've put in their money, so the government leverages work that may prove valuable beyond the short-term by giving loans. No new government buildings needed, no new bureaucracy you can't kill.

I don't know enough about Tesla or the industry to say if this particular one is the best use of money, but it's not unique or anything. Corporations often get subsidies for new tech; basic research just doesn't get done at measurable levels these days in private industry. Bell Labs isn't what it used to be.

If the government subsidizes heavily so that average people can buy this particular car then you have to explain why the government should be in the business of picking winners and losers in the market for private automobiles.

The "picking winners and losers" thing has really become a meme. Government policies necessarily determine winners and losers all the time, of course, with zoning laws, housing subsidies, mileage standards, public roads, wars for oil, leasing out of federal land, tarriffs, and so on.

If we (ie, the people through the government) chose to spend massive subsidies on electric cars, it would be because we thought the benefits (noise, local pollution, energy flexibility, global warming) outweighed the costs. We'd be saying that cars that spew out those pollutants are "losers," and it's worth paying for them to get off the roads. That is fundamentally a government business--making decisions about the common areas in communities.

If Tesla is such a good investment then why cant they raise $450 million from the private equity market instead of from taxpayers; 99% of whom will never sit behind the wheel of a Tesla?

Because, obviously, a good investment for the government is not the same as a good investment for a private investor. We don't expect corporations to identify candidates in kindergarten and pay for their schooling through 12th grade and college. They'd never get their money back, at least not in a free labor system, but society as a whole benefits.

Your points are really all cookie-cutter stuff, by which I mean they apply to any government intervention, not just Tesla, not just for putatively rich people. But even in freshman college micro-economic models, concepts like externalities might justify state intervention, and in the real world, actual or de facto subsidies for other industries require it. Given this specific intervention is a loan, not some recurring grant and not regulation, which will let the company live or die in the market (as evidenced by the actual story), do you have any actual reason to oppose *this one*, and not just all?

Re:I can't wait

[Dunbal]

until 2012 to see the S car go.

      Or you could enjoy one tonight at your local French restaurant?

Re:I don't get it.

[clang_jangle]

Correct.

Re:Quixotic business plan

[TheRaven64]

Energy density of lithium batteries: 1 megajoule/kg

Energy density of gasoline: 45 megajoules/kg

That's a slightly misleading statistic, because it doesn't include the mass of the engine or drive train in the calculation. Electric cars are much simpler mechanically. You need to compare the mass of fuel, a fuel tank, engine, gearing, and drive train to the mass of batteries plus electric motors and then see how much power you've got for both. The electric car comes out a lot closer when you do this.

Then you need to factor in the fact that you can charge an electric car at home. How many trips does a tank of petrol give you? A week's worth of typical driving? Then if your electric car has only half of the range but can be charged overnight then it's competitive.

Finally you need to compare the cost of the energy and the efficiency of generation. Energy conversion from chemical potential energy a battery to kinetic energy via an electric motor is a lot more efficient than converting hydrocarbon fuel into kinetic energy via an internal combustion engine. Electricity can come from burning hydrocarbons, but it can also come from things like solar, nuclear, wind, hydroelectric and tidal power. Technology keeps making these forms of power cheaper, but scarcity keeps making hydrocarbons more expensive. When 1MJ of petrol costs twice as much as 1MJ of electricity, it makes a difference. Petrol sold in the USA is about 36.6 kWh/US gal, so at $3/gallon that's 0.08 cents per kWh. That's pretty close to the cost of electricity. Once you factor in the relative conversion efficiencies, you pay a bit less per unit of kinetic energy from an electric motor than you do from an internal combustion engine at $3 per US gallon of petrol. When petrol hits $5 per US gallon (which is cheaper than it is in the UK) then it's a lot more expensive than electricity.