Tesla CEO Elon Musk plans to reveal the Model S sedan later this month
Our apologies to Mark Twain, but if a note the California EV manufacturer has sent to customers is any indication, Tesla Motors is looking to charge up during the automotive downturn. The start-up, founded by Internet gazillionaire Elon Musk, promises to be “profitable by mid-year,” according to the e-mail.
That’s despite a brief pullback on development of its second product line, the Model S, the closure of an R&D center, in suburban Detroit, and the decision to call off development of an assembly plant, near San Jose, California.
On March 26th, Tesla intends to pull the wraps off the Model S, a four-door sedan expected to go to market in 2011, for somewhere in the $60,000 price range. The preview will be held at the SpaceX rocket factory, in the L.A. suburb of Hawthorne. The project has gotten the full green light now that the Department of Energy has signaled plans to approve a $350 million loan, by mid-year, using funds specially designated to promote development of high-mileage powertrain technology, the Advanced Technology Vehicles Manufacturing loan program.
Where Tesla will build the sedan remains unclear. Last year, with much fanfare, the company announced plans for a San Jose assembly plant. Since then, Tesla officials have said they will switch to a “brownfield” site, most likely in California.
The ramp-up of production for the original Tesla Roadster is proceeding, albeit slowly. With a claimed order bank for more than 1,000 vehicles, the company acknowledges it has so far produced only about 200 Roadsters, and delivered even less.
Expanding its service network will be critical, Tesla officials admit, and in the letter to owners, they noted adding facilities in both Chicago and London, England, the latter the center of a planned push into Europe.
The most common questions facing Tesla concern the Roadster’s battery pack, which consists of more than 6,800 individual cells – how long will the batteries last, and what will it take to replace them? The maker is reassuring customers that “a Tesla battery pack should last approximately seven years or over 100,000 miles under normal use.”
Meanwhile, Tesla has set up a replacement battery swap program. Customers will be offered the opportunity to pay $12,000, €10,000 or £9,000 up front for a replacement pack in seven years.
Tesla owners can also double their standard warranty, to 6 years or 72,000 miles, for an additional $5,000. That might seem steep, but for those already committed to paying $109,000 for a Roadster, it may hardly be felt.
Tesla, meanwhile, noted, in the e-mail, that there’s already a bit of a market for used Teslas, one going for $160,000 to a buyer in the California wine country. Whether that premium will hold once there are more on the road remains to be seen. Typically, hot new products, such as the original Dodge Viper, command a serious premium in their early days, but that falls off over time.