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Tesla Admits Huge Losses on First Cars, Boosts "Option" Prices to Recoup

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n2doc Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-24-09 04:57 PM
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Tesla Admits Huge Losses on First Cars, Boosts "Option" Prices to Recoup
$48,000-Per-Car Imbalance Between Cost and Tesla Price Led to Management Ousters

By John O'Dell, Senior Editor

Attempting to diffuse customer dismay over a substantial down-grading of the wheels and charging apparatus supplied with cars that have been backlogged for as much as two years, Tesla Motors' Chairman Elon Musk said in an e-mail today that when the nascent electric-car maker first set its roadster's price at $92,000, it had no idea that actual production costs would run closer to $140,000.

It was that "alarming discovery," Musk said in his e-mail, that led to the almost complete change of senior management at the Northern California-based company last year.

The company had expected production costs to be about $65,000 per car,

Subsequent changes in manufacturing approaches, the car's drivetrain, heating and air conditioning system, wiring and even the supplier of body panels has helped lower costs tremendously, but each still costs Tesla "between $90,000 and $100,000" to build, Musk said.

Add overhead, including payroll, marketing and facilities costs and the auto maker still is losing a substantial sum on each vehicle it is selling, even with its price hikes last year to $98,000 and then $109,000.

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sfpcjock Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-24-09 05:20 PM
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1. That's a little disappointing
even tho the Tesla is over my price bracket for an electric car.

I've been wondering how the Aptera made in Carlsbad, CA is doing. They've been taking small refundable deposits for delivery this year, I believe.

The Chinese BYD electric will be out soon, supported by government development assisatance. It is the size of a Honda Accord and prices in the $20Ks, I heard.

China Could Charge Ahead in the U.S. Car Market

By Warren Brown

The Washington Post 1-23-09

DETROIT This is what the North American International Auto Show, which opens to the public this weekend, ought to be less glitz, less glam, substantially more substance.


But BYD and Brilliance this year are showing their stuff on the main floor, largely because hard times have forced some manufacturers Mitsubishi, Nissan, Rolls-Royce and Ferrari, for example to opt out of the Detroit show.

Its not so much that those companies were too broke to bring their cars to Detroit. Its that a tough economy is forcing them to be more selective. Rolls-Royce and Nissan, for example, are likely to be on exhibit at the upcoming shows in Geneva and New York and, because of its recession-resistant economy, in Washington.

But to BYD and Brilliance, an opportunity is an opportunity, and the two Chinese companies have taken advantage of the prime floor space given them by the absence of better-known car companies. Both are serving notice that when they enter the U.S. market in or about 2012, they will come as high-end, high-technology automobile manufacturers.

BYDs exhibit is instructive and should be taken as a warning by any automobile manufacturer or government inclined not to take the Chinese seriously in matters of advanced engineering. BYD is displaying a range of gas-electric and plug-in electric models, such as its E6 DM (six-cylinder, dual-mode) sedan, which BYD representatives said will be able to drive 156 miles on a single battery charge.

Are BYD and Brilliance bluffing? I dont think so. Their exhibits constituted a poignant reminder of something a Chinese university student told me two years ago in Shanghai: You in the West own the old automobile industry. We are going to own the new one the one powered by batteries.

Its a good thing that the North American International Auto Show has been forced to divest itself of its glitzy, wasteful silliness. Heres hoping that its functional austerity lasts. These are hard times. But, more than that, the competition for the future of the automobile industry is getting serious. We in the United States dont have time to fool around.
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metapunditedgy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-24-09 06:27 PM
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2. Sounds like a bait/switch to me.
To turn things around, Tesla recently told customers who have placed $50,000 deposits on cars - some as long ago as early 2007 for vehicles with a stated price of $92,000 - that they can still get their cars at the original price, but not with the high-speed charging cable and custom alloy wheels they thought they'd be getting.

They'd better be willing to give back the $50K for people who want to pull out.

I suppose it depends on the actual contract, of course... later in the article Tesla says they always made it clear that "prices could change." In which case, why would anybody put a down payment on such a deal?
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NNadir Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-25-09 12:15 AM
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3. Nonsense! Ground-breaking! Tremendous! Revolutionary! Ahead of its time!
I can't remember how many times I heard here that this car was just the beginning of a mass produced people's car powered by solar energy.

It's sort of like solar energy itself, which was supposed to be mass produced and accessible to the masses.
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TheWraith Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-25-09 02:27 AM
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4. Musk himself deserves a lot of the blame here.
The guy went wild on reengineering the thing during the design phase, wildly increasing the cost per unit, by tens of thousands of dollars. Carbon fiber door panels at I think $6000 per car, $3 million dollar total cost to lower the door sills on the chassis, all sorts of other things.

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