Tesla Motors CEO: Model S is cheaper than it looks
After wowing the auto press with the sleek design of Tesla Motors' all-electric Model S, company CEO Elon Musk is now making an economic argument to consumers--and, perhaps, the U.S. government--for buying the luxury sedan.
Tesla Motors CEO Elon Musk
(Credit: Corinne Schulze/CNET)After months of anticipation, Tesla on Thursday took the covers off the Model S, an electric sedan priced at $56,400 but that qualifies for a $7,500 federal tax credit.
In a newsletter to customers on Friday, Musk, who is also product architect at Tesla, touted the many benefits of electric vehicles over gasoline cars, including price.
"The ownership cost of Model S, if you were to lease and then account for the much lower cost of electricity versus gasoline at a likely future cost of $4 per gallon, is similar to a gasoline car with a sticker price of about $35,000," he wrote.
Because they have fewer moving parts and don't require oil changes, electric vehicles should also have lower maintenance costs. "Model S costs roughly $5 to drive 230 miles--a bargain, even if gasoline were $1 per gallon," Musk wrote.
He also indicated that Tesla believes that it is close to receiving $350 million in loans from the U.S. Department of Energy to build a plant in California that would manufacture the Model S. Production is slated to begin in late 2011, with deliveries starting in 2012, according the Web site launched to take orders for the car.
The Department of Energy has revamped its process for approving loans to approve them quicker. Even with a streamlined process, though, some observers worry that it will be very challenging for the Energy Department to dispense loans as quickly as many loan applicants hope.
The Model S show car was made at the Tesla Design Studio in Hawthorne, California at the rocket factory of SpaceX, where Musk is CEO. The powertrain was made in San Carlos, California, where Tesla is based.
Cost is often cited as one of the biggest barriers to electric vehicles, particularly the batteries.
Musk said the Model S will have three battery options providing a range of either 160, 230, or 300 miles per charge, but it did not disclose the prices. He said the "floor-mounted" battery pack is designed so that it can be changed in battery-swapping stations.
"Tesla is relentlessly driving down the cost of electric-vehicle technology, and this is just the first of many mainstream cars we're developing," Musk wrote.
Martin LaMonica is a senior writer for CNET's Green Tech blog. He started at CNET News in 2002, covering IT and Web development. Before that, he was executive editor at IT publication InfoWorld. E-mail Martin. 
"The four-door will seat seven and start at a base price of $57,400 ($49,900 after a $7,500 federal tax credit)."
I may be wrong, but that car does not look like it would hold seven. Not unless you stick one passenger in each of the two trunks.
http://farm4.static.flickr.com/3649/3387792369_5796b82502_b.jpg
You're not saving money on maintenance- you're only changing the types of parts involved.
And don't even think about the cost if you ever get your car flooded.
For what we're spending to prop up the traditional car manufacturers, we could provide substantial subsidies to electric vehicles. And you have to think Detroit would offer a much more affordable locale to build a new assembly plant.
But what happens if it sits @ $2 like it is now for a while?
For a gas sedan getting a combined 23mpg (for sake of argument), that 230 mile range equates to 10 gallons, or $20 per 230 miles. So the gas car cost $15 more per 230 miles.
The difference in price between the Tesla and the gas counterpart (again using the $35k price) is $15k...that works out to 1000 230 mile cycles. 230,000 miles...yeah, I'd say that it will take a little while to recover that initial buy-in cost. Even if gas does immediately spike up to $4/gal, that's still 115,000 miles. How long do average people usually hang on to their cars again? I'm guessing that it's probably LESS than the time that it takes to accumulate 100k on the odo.
Considering the economic signs of the times, for Tesla's sake perish the thought that a buyer actually looks at a gas car that costs around $20-25k instead...
1) Gasoline IS NOT $4.00 a gallon! (although his buddy and fellow scammer Obumnmer might accomplish that!)
2) This MORON makes no contribution to the cost of ELECTRICITY to charge it! IT ISN'T GOING TO BE FREE!!
Do all your **** Journalists conspire to fail to mention that ELECTRICITY per mile is actually 10 TIMES MORE EXPENSIVE than gasoline!!?? Calculate the mAh (amperage stored in the battery) cost during charging for 4 to 8 hours!!?? Do you moron "journalist" (that a joke, more like propagandists) think that the Electricity will be free???
IDIOTS!
according to their website, a full charge holds around 53kWh of electricity, and at ~5 cents per kWh, that comes to a little more than 2.50 for 221 miles of driving. not sure where you are getting your electricity.
"Model S costs roughly $5 to drive 230 miles--a bargain, even if gasoline were $1 per gallon,"
10 times more expencive? I think you're math is off.
You better go back to school and learn some basic electronics of electro dynamics. What the battery HOLDS in NOT what it takes to charge it! A battery doesn't work like a bucket to hold water, you just don't "pour in" the amount of water that the bucket can potentially hold!
A Battery must be hit with the maximum amount of current it can hold for several hours as the chemistry of the battery (Li-ON) converts it to STORAGE! The ratio is roughly 10:1
AND bone head, HOW do you think the electricity that's flowing into your house is being generated?? Mana from god? Free flowing from the Earth??? How about THAT polution, THAT energy consumption???
It's dopes like YOU that will be suckered into this crap and then lament later that you were tricked.
WP
MS / IEEE
Note that it's still cheaper to run even if gas is $1 per gallon, it's just that the TCO won't be the same as a $35k gasoline car.
He didn't say it was. He said:
[i]"The ownership cost of Model S, if you were to lease and then account for the much lower cost of electricity versus gasoline at a [b]likely future[/b] cost of $4 per gallon, is similar to a gasoline car with a sticker price of about $35,000," he wrote.[/i]
It hit over $4 per gallon before the prices temporarily plummeted -- but speculators will, inevitably, raise the price back up to $4+ per gallon. If they don't, then Opec will do it for them by cutting oil production.
[i]2) This MORON makes no contribution to the cost of ELECTRICITY to charge it! IT ISN'T GOING TO BE FREE!![/i]
He did make contribution to the cost of electricity. That is what is meant by "total cost of ownership." Purchase price + maintenance + refueling.
The trick, though, is making sure the electricity you purchased was generated cleanly -- nuclear, wind, or something like that. Makes no sense to burn fossil fuels to generate electricity to store in a battery to run your car when you can just burn the fossil fuel and run your car.
the 5 cents per kWh does include the electric generation in my area. I'm not even mentioning friends of mine in WA who get their electricity free due to the many hydroelectric plants. In either case the pollution caused by generating this electricity is MINIMAL in regards to the pollution caused by the drilling, searching, and mining of fossil fuels (oil), and then the added pollution of converting it to gasoline.
I really don't care how much you claim to "know" about electrodynamics (even though this is really electrochemisty that we are talking about), because you are wrong about the 10:1 ratio of electricity. Li-ION batteries' discharge rate to charge rate are the same: 80-90%. The only energy that could possibly be lost in a closed system like a battery is due to heat, which it produces whether it is being charged OR discharged. Therefore, you were right, i was wrong about the cost. The price to charge the batteries would be more like 3 dollars.
Although the cost has come down from the stratosphere ($100,000), Tesla still needs to get the price down below 30,000 for most of the public to be able to purchase, $20,000 would be even better (I could buy). I love the idea of fewer parts to these cars - this helps lower the total cost of ownership. Battery replacement cost may turn out to negate these savings though. I would like to see Teslas become as ubiquitous as Honda Accords in the end.
That way, you don't have to sit there and wait for 45 minutes for your battery to be fully charged again, and you don't have to pay for the full price of a brand new battery--because you're not getting a brand new battery. The station takes your depleted battery, charges it, and gives it to someone else who comes into the station in exchange for their depleted battery.
As far as grid charging in CA or anywhere else for that matter, the power companies should offer a differential rate depending on whether electricity is offered at night, or during peak hours. Plans like these often charge something like 3c/kWh during the night, and $0.16 during peak hours (when rolling blackouts / grid overload is a problem).
The only source of problem would be lots of people charging at work during the daytime. In that case, the power companies can do similar to what is being done with some large air conditioning units, that is, sell power at a slightly discounted rate, in exchange for the power company being able to momentarily suspend the charging if the grid gets overloaded. All that matters is that some set amount of energy be trickled into the car over the course of a workday. Intermittent loss of power [i] for the car charging[/i] could actually tolerated, rather than letting the entire grid suffer rolling blackouts.
'Tesla also promises the sedan will feature a 45-minute "fast charge" and the ability to swap battery packs quickly.'
So I would assume, since Tesla themselves are saying this, that changing the battery pack is NOT akin to changing the engine of a regular gas-fueled car.
And where's the indignation over not allowing European low sulfur diesel engines into the country? VW and Ford are going great guns with a small non-polluting that get in the 60 - 70 mpg range.
Strikes me that all this hullabaloo over electric cars is a load of bull hockey.
http://www.teslamotors.com/blog4/?p=66
I agree with you on the diesel restrictions....don't seem to make much sense.
Can't agree with you on the "bull hockey"....it is not that the current electric cars are the future, but I think they are an important step toward the future. Gasoline combustion cars have a limited lifetime given our limited resources, quickly running out. The transportation paradigm has to change somehow and a functional, efficient all-electric car, and more importantly the technology that goes into making it, is a vital step toward that change.
I live in Italy. When I go to grocery, electronics or hardware stores there is a plastic box for disposing of used batteries. There are bell shaped containers in parking lots for disposing of glass (green), plastic (yellow) and black for larger batteries. You can dispose of your glass, plastic, cardboard and batteries at a recycling station and each time you go the stuff you turn in is weighed and you are given credit for it. Trash bills are paid yearly and the credit for your recycling in deducted.
Gas and diesel is about 1.10 Euro per liter. At 3.8 liters per gallon, it's 4.18 Euro per gallon. With the exchange rate at about $1.30+ per Euro, it comes to about $5.50 per gallon.
Many of the most efficient European diesels will not run on American diesel, it's way too dirty. I have a diesel Alfa Romeo that gets about 35 MPG and doesn't smell like a diesel. The exhaust is filtered for environmental reasons. America has less than 5% of the world's population and uses over 25% of the natural resources. Do you think you, as an American have a God given right to squander resources and think that anyone who wants to improve is a fool? Do you really sure God is an American?
And, that US diesel is too "dirty" to run in a crack, sophisticated and much more advanced European engine is probably true. But I think that the refining industry can produce low sulphur diesel if the incentive were there - note that Mexico is to begin production of the new VW model....and I seriously doubt that Mexican diesel is all that "clean".
As for not being committed to environmental issues perhaps you should live in the US for awhile - or come back home since you sound like one of those chichi expatriates that have a self loathing for his own country. Dropping a AAA battery into a little plastic box is not quite the same as trying to shove a meter square battery into that little recycle box.
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For Tenshoes - I admittedly drifted into excessive hyperbole with the hulabaloo comment. Electric is no doubt one part of the energy/environmental calculus. It's just that my sensing is that we're rushing into something that we know little about and need to move with all due caution and prudence. It's a bit like the dream that solar and wind are the answer to all our problems.....another laughable scheme - IMHO. And I'm sitting as I write this in a newly outfitted solar powered villa in Colorado. Cold showers!
Batteries are not cheap, IMO this is the reason why plug-in hybrid approach (such as the GM Volt) is the best way to go -- install just enough batteries to cover daily commuting (say 50 mile), and let the gasoline handle long trips. That's ~90% of the advantage of the electric, for a fraction of the cost for the battery
And I think the Lexus, Cadallac and BMW owners are the people this car is aimed at... well, maybe not the Cadallac people, they can't even set the clocks on their VCR's....
Pure electrics have number of problems, but perhaps technology will come through. Until it is proven, the Volt concept from GM is far superior.
We are talking about bringing in a vehicle which will conform to the FMVSS (safety standards) as well as having decent performance and range in all extremes of temperature.
So far we have no batteries that are demonstrated to have the qualities needed for extended operation over many years, much less charge in short periods.
Keep in mind the story of Eclipse Aviation which was not an airplane company and consumed around a billion dollars to develop a new small jet and went bankrupt. The residual value in Chapter 7 is in the low 20 mil range. That is the logical fate of Tesla and its ilk.
It is a lot harder to build a mass producible car than it looks. You may have distain for the current car companies, but it is unlikely that Tesla can produce a car at the proposed price point and investment level.
Of course if you actually WANT heat that means you will have to actually waste some battery power/driving range. Using stuff like heated seats (to heat the person directly rather than the whole space) would probalby not hurt too much, but in a very cold northern climate that will not be enough. I really would like to know how this will work out...
Also, this is again one of teh reason why I think that plug-in hybrid is a more viable approach. When heat is necessary, the engine could be switched on to both generate heat, and keep the batteries topped off (with most of teh motive power still coming from the batteries).
- by biffhenerson March 27, 2009 12:15 PM PDT
- Batteries? Been there, done that. Yawn. Lets move on to the hydrogen car.
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- by brief March 27, 2009 4:05 PM PDT
- I'd love to see an affordable hydrogen/fuel-cell car become available in the next few years. I'd certainly line up to buy one.
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