July 20, 2006 10:32 AM PDT

Electric sports car packs a punch, but will it sell?

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There are other design novelties, of course. The company designed the engine and commissioned a company that specializes in transmissions for Formula One cars. The car only has two gears: First goes up to about 65 miles an hour, and second takes off after that. (There is no reverse gear. The engine is just run backwards so that, theoretically, you could go top speed--130 miles an hour--in reverse.)

Selling direct
The car's manufacturing is a worldwide affair. Tesla's engineers, based in Palo Alto, Calif., designed the car and the engine. A site being set up in Taiwan will assemble the components and manufacture engines. The engine and drive train, along with other components, are sent to the U.K., where a carbon fiber shell--light but strong--is manufactured and the car is assembled.

The company won't sell through dealers, but direct to consumers instead, said Tesla board member Laurie Yoler.

At $90,000, the two-seat car is out of reach of most consumers. Musk, however, said the company hopes to come out with a four-seat, four-door sub-$50,000 model in about three years. After that, an even cheaper car will emerge.

"Every successive model will be cheaper and be in higher volumes," Musk said.

Tesla began around 2000 when Musk approached an electric-car company with the idea of creating an electric sports car. That company's owners weren't interested, but they introduced him to Martin Eberhard, who recently sold an e-book company and was touting a similar automotive idea.

So far, the company has produced two production models. However, it has secured commitments from around 30 people who want to buy one. Most are investor, such as Google's Larry Page and Sergey Brin, and eBay's Jeff Skoll. The list, however, also includes Ben Rosen, who funded Compaq, as well as unnamed "private parties."

What do you get for $90,000? The car can redline at 13,500rpm, reach about 130mph, and has 240 horsepower. It also has a range of 250 miles per charge, but that will increase, the company claims.

The car's curvy exterior was intended to give it a traditional sports car feel, said Smith. However, Tesla said it doesn't want the vehicle to look old-fashioned, which explains why you can see the carbon fiber weave of the exterior shell.

Stuck in Barstow? You can unplug a soda machine and charge up in an ordinary electric socket--although it could take from five hours to a day, said an engineer at the company. To ameliorate that problem, the company will install chargers at the homes of owners. These chargers can cut the charging time down to about three hours. Tesla is also working with hotels and gas stations in California to set up high-energy fueling stations.

But will it sell? Tesla is hot on the idea, and so were many attendees, but the car's current 250-mile maximum distance kills the idea of extended road trips. Still, the company believes it has time and gas prices on its side.

"The Tesla Roadster costs a penny per mile to drive," said Tesla CEO Martin Eberhard. "The electric sports car will fundamentally change the way we drive."

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