I have been following a startup auto company called Tesla Motors for almost a year now. Most of you who come here likely know this already, because there was a period of a couple months where I would talk about this company to anyone who would listen. Anyway, I made a mental note to put something on my blog about Tesla when I had a minute. I have a minute.
How can you start up a competitive car company in the U.S. market? Many would say you can’t, but I think Tesla Motors has found just the right mix to pull it off. How they are doing it:
New Blood - Tesla was founded by Silicon Valley veterans Marc Tarpenning and Martin Eberhard. Sure many people are innovative, so what’s different here? No industry ties. Big auto and big oil have a great relationship. The automakers produce inefficient, oil-bound cars, and the oil industry keeps pumping out the black gold. These guys don’t have that 100 year friendship lurking over them. They can be truly innovative.
Style - They started out by manufacturing a roadster. I can’t think of a better way to get your picture in the paper and into the office watercooler conversations. The car is slick. Unlike many of it’s electric predecessors, It doesn’t stick out like a sore thumb.
Technology - The Tesla roadster runs on an electric motor. This may turn off a lot of people, but for the new generation of car buyers, a car that is both at the forefront of technology and takes up a smaller environmental footprint brings it to the top of their list. And by the way, it goes 0-60 in about 4 seconds, fast enough to toast almost every gasoline engine auto. 130 mph top speed and 250 miles to the charge too.
Electricity - Tesla is making the ultimate “flex fuel” vehicle. It seems like everyday there is a new “fuel of the future” (biomass, ethanol, hydrogen, etc.). Look at the clamor that is created when someone mentions “peak oil”. Let’s face it; We are dependent on cheap, reliable energy. Why not electricity? The means to create and deploy it already exists. The infrastructure is already there. Take the billions of dollars it would cost to develop, produce, and and promulgate a new fuel like hydrogen and put it into the electrical grid. The best part? Electricity can be created from any fuel, and quite efficiently (comparatively) as well. Let’s say hydrogen becomes the best option in the future. Why replace the millions of cars on the road, when we can produce new generators at the power stations? Solar and wind energy can be used as well. I don’t know what energy sources we will be using in 50 years. Maybe fission reactors will become a reality. What I do know is that they will generate electricity. And if you can keep the rust off your Tesla roadster, you will still be driving it.
Batteries - There was a quote from one of the founders that really stuck with me. I don’t remember the exact wording but it went something like this: “Let Sony and Dell make better batteries. Then we’ll put them in our cars.” Battery life has been one of the biggest downfalls with the electric car. Electric cars are have a minuscule market (for now). This means R&D funding is minimal. Small electronics, cell phones and portable computers however have a huge market. These guys would kill for a better battery. Lots of R&D money. Tesla can capture that benefit without the investment, and their timing couldn’t be more perfect.
Downsides - They are always there. Usually at the bottom of the article. Luckily, these downsides are pretty manageable. The Tesla roadster charges in “as little as 3.5 hours.” With the 250 mile range, plugging it in at night will work just fine almost always. However, If you wanted to take a cross country drive, it would be handy to get a full charge while you stopped for a meal. Technological innovation should take care of this. That portable electronic market is no doubt funding this technology as well. The car costs $100,000. As much as I want one, I won’t be buying one anytime soon. The good news is that it would cost almost that much to make a Toyota Camry if they were only building 100 units a year. With mass production comes affordability. Tesla just needs to get through to that stage, and the cost woes will disappear.
In Conclusion - I sure hope they do. They seem to have all their ducks in a row as far as I can tell. They are selling out their limited numbers like hotcakes, and have a more affordable sedan that should be launching next year. If these guys go public, buy some stock. Not only will you help bring the price point down, you just might make enough money to buy a Tesla Roadster. After all, two of their main investors are Larry Page and Sergey Brin, and I hear they know a thing or two about making good decisions.
Hey Tesla motors, when you are ready to open the doors at the Chicago sales office and need an enthusiastic salesman, or if you just want to take me for a ride in the roadster let me know. A guy can hope can’t he?
