Tesla Electric Car Gets Reality Check
By Ron Cogan
It’s easy, even compelling, to be a big fan of Tesla Motors’ electric roadster. This car is stylish, fast, and makes an incredibly powerful environmental statement. In Green Car’s early report on this car, we noted its many obvious advantages: design and development in conjunction with Lotus in England, a chassis based on the Lotus Elise sports car, and advanced electric drive paired with lithium-ion batteries. Its performance numbers – 125 mph top speed and zero-to-60 mph acceleration of under four seconds – place this electric car solidly in the exotic/high-performance category. Combining the high-tech approach of Silicon Valley with the world-class automaking capabilities at Lotus just seems a solid combination.
In recent times, Tesla Motors has found first-hand how challenging it is to be an automaker. Even though it took deposits and sold out its initial planned 2008 production run, those cars have been long in coming. Recent reports indicate that transmission problems have been one unexpected challenge.
Serial production started in late April of this year. Tesla’s fourth production car was recently in Monaco in advance of making its way to its new owner in the States, who was just fine with the car being displayed at the Top Marques Monaco auto show there. And why not? Photo ops were prolific, with the likes of Bono and Prince Albert II of Monaco shown with the Tesla P4 car.
According to Tesla, the production of this car signified that deliveries are commencing. That is a milestone for any new automaker, particularly one on an expansion track like Tesla that has just opened its first dealership and also recently announced the beginning of European sales. Pointedly, deliveries are especially important for Tesla in light of its first announced delivery dates that were missed in 2007 and again earlier this year, plus an ongoing sales program that requires a $60,000 fee to reserve a 2009 model.
The company says it is on track although the early phase of production is slow, with one car going on the line per week. Tesla vice-president of Marketing Darryl Siry advises Green Car that the car’s production will ramp up slowly through the summer months but more aggressively in the fall. “We only expect to produce about 300 this calendar year,” shares Siry, “and the rest of the 300 2008 cars in the first 3 months of 2009.” He points out that this follows a schedule the company outlined several months ago. Although Siry expects there will “be some blips along the way,” he also asserts that the company plans to stick to this overall schedule.
THE ELECTRIC CAR CHALLENGE
As Tesla Motors and others strive to fill what could become a significant potential market for electric cars amid historically high gas prices, it’s interesting to note that the dynamics involved in the electric car arena remain no less fascinating today than Green Car editors witnessed in the early 1990s. Then, with California’s as-yet unmodified Zero Emission Vehicle (ZEV) mandate fully at play, both major automakers and smaller electric vehicle interests were exploring this potential market and jockeying for position.
For the auto industry, the desire to produce electric cars and gain potential market share in the years ahead was mitigated by the huge losses that were sure to be incurred if battery development didn’t come along as hoped – a dilemma that did ultimately come to pass. On the smaller specialty automakers’ part, the desire for ZEVs – essentially electric cars – created a potential market opportunity that was significantly supported by the existence of a state requirement for the production and sale of these cars. The lack of a mandate, or even a weakening of the mandate’s requirements, would pose unwelcome challenges.
The ZEV mandate has been bitterly contested and modified over the years as the State of California strived to determine if, and under what circumstances, automakers could produce electric cars to help mitigate the state’s persistent air quality challenges. The mandate has morphed over time to the chagrin of electric vehicle enthusiasts and those businesses investing in the development of electric vehicle technologies and the vehicles, but to the relief of automakers that realized they do not have availability of affordable batteries to make electric vehicles commercially viable. It will change again this year once CARB’s recent modifications to the ZEV program – which include an emphasis on plug-in hybrids and hydrogen vehicles rather than pure battery electric vehicles – are approved by the California Office of Administrative Law.
As the California Air Resources Board was preparing for the hearings that would find it approving the latest modifications and de-emphasis of battery electric cars, Tesla’s president and CEO Ze’ev Drori sent a letter to CARB chairperson Mary Nichols that outlined the company’s position. The company asserted that the Board had “been misinformed about the availability of pure ZEVs and that the [CARB] staff has erred in recommending that the Board substantially loosen for years to come, requirements that can in fact be met today.” Perhaps most telling, Drori’s statement pointed out that the CARB staff’s logic was faulty when it concluded the current state of battery technology would not see manufacturers producing battery EVs prior to 2012, and asserted that “Tesla Motors is in production of road-worthy fully certified battery powered ZEVs” that are neither “a pipe dream” or “exotic one-of-a-kind creations.”
The importance of California’s ZEV mandate in encouraging electric vehicle technology development cannot be dismissed. Many commercial interests in the 1990s, from battery companies to developers of electric motors, controllers, and even vehicles, made business decisions based on a continuing ZEV requirement that would find an initial two percent, five percent, and then ultimately 10 percent of the state’s vehicle sales purely electric. Apparently, although the percentages have changed over the years, Tesla Motors is not immune from this financial encouragement.
In writing to the Board, Drori pointed out that “the staff proposals, if enacted, will have a severe adverse impact on Tesla, the only car maker based in California, since having the ability to sell the accumulated ZEV rights mitigates in part some of the large costs incurred by the company in the development of a pure ZEV car.” Drori added that “the staff recommendation is disturbing since in essence, not only it would substantially weaken the ZEV program, but it will also bestow a financial windfall on rich foreign automakers and domestic giants while at once penalizing a California based ZEV manufacturer.”
Regardless of California’s actions, if battery technology comes around as many hope then electric cars have the potential to radically change the face of transportation. Tesla, with its depth of investment and obvious high-tech vision, could emerge a major player. That’s especially true if the company can step up to fill the mass market’s appetite for more affordable electrics with the future models it has code-named White Star and Blue Star, which it envisions will sell at more mainstream $55,000 and $30,000 price points, respectively.
That’s the future, maybe. But here’s the challenge today: In the midst of all the dissention and hype and controversy of the electric car debate, can Tesla really present its current roadster to CARB – or anyone else, for that matter – as an example that shows the viability of a mainstream electric car when it comes at a cost of $109,000? And does its use of what’s likely a $20,000+ battery pack illustrate that full-function battery electric cars can be made any easier – or affordably – today than a decade ago? You can be the judge of that.
Want to know more about electric cars? Be sure to check out these articles on GreenCar.com:
5 Electric Cars You Can Buy Now
Fast Times in a Mustang 300E Electric Musclecar
Th!nk City Electric Car in Production Again
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