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Tesla Motors was among the first automakers to apply for a low-interest loan under the Department of Energy’s Advanced Technology Vehicle Manufacturing Program. The program, created as part of the Energy Independence and Security Act of 2007 and appropriated in the fall of 2008, is unrelated to the current stimulus or “bailout” package of some American automakers. The goal of the bipartisan ATVM is to accelerate the production of fuel-efficient vehicles for mainstream Americans and reduce the nation’s dependence on oil.

As part of the loan application process, federal government scientists, engineers and analysts undertook a thorough evaluation of Tesla Motors, including an open-book inspection into our finances and intellectual property. Last June, the DOE announced that Tesla was among the first three automakers to win approval for the loans — along with Ford and Nissan. No money has yet been disbursed to Tesla. When it is, monthly audits will ensure that the money is spent in Model S and powertrain engineering and production costs.

Tesla will use the loans to support two specific projects:

• the US-based production, engineering, and assembly of the Model S, an all-electric family sedan. The Model S assembly plant will employ about one thousand workers in Southern California.
• a powertrain manufacturing facility in Northern California, which will build advanced EV powertrain components for other automakers. We hope that technology will enable other manufacturers to get affordable EVs on the market much faster than developing the technology themselves. The facility will employ about 650 workers. We already sell EV components to Daimler, which will soon begin marketing an electric version of its popular and affordable Smart car.

We’re already engineering the Model S, a seven-passenger family sedan that will have a base price of $49,900 after a federal tax credit that will cost the equivalent of a car that retails for $35,000, given the relatively expensive cost of gasoline vs. electricity. The Model S can be plugged into conventional outlets or be fully quick-charged from a higher powered system in as little as 45 minutes. The company unveiled a working prototype in March 2009. The Model S platform will also be used for derivatives including a minivan, cross-over utility vehicle and a utility van for fleets and other industrial or civic uses.

Thanks to the Roadster, Tesla is the only automaker producing and selling highway-capable electric vehicles in North America and Europe, and we’re proud of its success. Tesla has already delivered more than 700 all-electric Roadsters to customers in the United States and Europe. Twice as energy efficient as a Prius and six times as energy efficient as gasoline competitors, the Roadster is an American car that gets 244 miles per charge, according to the EPA. Tesla has never applied for or received any federal loans for the Roadster, but we’ve already delivered more than 700 to customers in the United States and Europe. It is the first production automobile to use lithium-ion battery cells and the first production EV to travel more than 200 miles per charge. The Roadster set a new EV distance record in April 2009 when it completed the 241-mile Rallye Monte Carlo d’Energies Alternatives with 36 miles left on the charge. It is an important proof of concept for Tesla. We are already using some of the same powertrain technology in the Model S and in even more affordable vehicles planned for launch in the coming years.

For a few hours now, I have been sitting in a darkened photography studio, staring at a beautifully lit Model S. I am beginning to realize why it sucks to be a perfectionist.

Even after hours and hours poring over and deliberating every millimeter of surface and detail leading to this prototype glowing in front of me, I realize the job is far from done. But the good news for a designer who is never satisfied is that, even after accomplishing so much in such a short time, it’s not quite time to lift the brush.

The world is now very familiar with the Model S show car, which we launched on March 26. But the development process continues as we hone the Model S into a world-class production car – and the best EV on the market.

I left Mazda last summer to work at Tesla, attracted to an idea that initially struck me as impossibly ambitious — and, equally, downright genius. The goal: A mid-sized sedan that seats 7 people and their luggage in a package that is both functional and good looking – actually, better looking than anything on the market. Some SUVs can’t even do that. Especially the good looking part.

With such lofty expectations, we needed to start with a clean sheet — and that’s what we did. In a small, white tent carved out of a corner in the back of a rocket factory in Hawthorne, California – where SpaceX employees seem to accomplish the impossibly ambitious on a daily basis — we got to work. We immediately began building the design team, which eventually grew to 11 people. We worked grueling hours, fueled by countless take-out dinners, lunches and breakfasts, not to mention ample caffeine and snacks in the SpaceX cafeteria.

If that weren’t challenge enough, last fall we simultaneously developed the Roadster Sport, the first variant of Tesla’s world-class powertrain. Tesla will begin delivering the Roadster Sport to customers starting in late June.
We worked nearly up to the moment that the car was revealed to the public. That’s a total of eight months – a timeline that would seem preposterous by the standards of the traditional automotive industry.

But one of our biggest assets – aside from our (possibly unhealthy) work ethic – is the simplicity of an all-electric powertrain. Tesla’s industry-leading electric powertrain fundamentally redefined the basic architecture for a sedan, enabling the Model S to become an insanely functional car. We also had the confidence that comes from building a car around a proven powertrain that has already racked up hundreds of thousands of miles in simulated and real-world testing.

Still, one of our biggest challenges was coming up with an overarching design language for a car unlike anything else on the road. The main design theme the Model S communicates is efficiency. “Uncompromised” is the key word I use to describe Model S: environmentally friendly, extremely functional and attractive. It’s a vehicle you are proud to own regardless of what attribute is most important to you, and one where you don’t sacrifice one or more of those attributes for the sake of any other.

I set out to develop an efficient, timelessly modern yet classic and international form language, as well as a face for the Tesla brand. As a new brand in a rapidly changing world of brand-savvy consumers, establishing a secure identity is critical. Model S will be the volume base from which we will build the Tesla brand.

Tesla’s design is gender-neutral, advanced and unique — but not strange, futuristic or overly avant-garde. It’s ready-to-wear, not runway haute couture. This is a pretty good sized car, yet it’s agile and looks a bit smaller than a car with such a roomy cabin and cavernous storage capacity. It’s got a lightweight, lean impression, which visually communicates efficiency, especially considering the “range anxiety” of skeptics unfamiliar with Tesla and EVs. Read more…

Hello Tesla customers and enthusiasts,

As you have probably heard or read, there’s a lot happening at Tesla: Read more…

Tesla to be Profitable by Mid Year

Although extraordinarily difficult to close, the $40M financing round completed in December was twice the amount Tesla needed to reach profitability. Moving forward two months later, we remain on track with our cost reductions and production ramp, so it appears highly likely that Tesla will meet the goal promised to those investors of becoming profitable by mid year.

The main reason for this confidence is that Tesla is already in the fortunate position of being sold out until early November, something few automakers can claim, and will soon be sold out of all 2009 production. While we have had some cancellations due to buyers experiencing personal financial difficulties, new orders continue to flow in every week from the United States and Europe. We have now produced over 200 Roadsters for customers and there are more than 1,000 customers still awaiting delivery.

Due to our order backlog, it seems that owning a Roadster can be a good investment. Last September, as the financial and real estate markets began crashing, a Roadster was sold at the Sonoma Paradiso in California wine country for $160,000, well above the current list price of $109,000. Many Roadster owners who have taken delivery of their cars have already decided to purchase a second Roadster or Roadster Sport because they like the first one so much.

The continued strong demand is driven by the fact that the Tesla Roadster has no direct competitors in the marketplace. It is faster than almost any sports car on the market (our Roadster beat a Porsche GT3 on the Top Gear test track) and yet uses less energy and has a smaller carbon footprint than a Toyota Prius, even if you assume the worst possible case where all electricity comes from coal.

I expect sales demand to strengthen further as this awareness grows. After all, what’s the point of driving another exotic sports car when it is slower than a Tesla and damages the environment? Already, the Tesla Roadster is the car of choice among the technology, business and Hollywood A lists – this year’s Academy Awards will be a lineup of Teslas – and we have never had to give a discount to anyone.

Many customers also appreciate the fact that profit from their purchase goes towards helping Tesla develop more affordable, mass market electric cars. The same cannot be said for those who buy gas-guzzling sports cars from other automakers.

And owners aren’t the only ones impressed with the Roadster. Road & Track was the first auto enthusiast magazine to perform third-party, instrumented testing on the Roadster; they were “pleased to see its extravagant claims confirmed.” The Washington Post’s Warren Brown gushed, “Wheeeeeee! If this is the future of the automobile, I want it.” Dan Neil of the Los Angeles Times had perhaps the most colorful description we’ve ever seen to describe the Roadster’s scorching acceleration: “God has grabbed me by the jockstrap and fired me off his thumb, rubber band-style. Wow.” And we’ve also had a torrent of positive reviews in Europe, where deliveries begin this summer – including a Le Monde story with our favorite headline: “Le chic électrique.”

Unveiling the Model S and DOE funding!

On March 26th, at the Tesla design studio located within the SpaceX rocket factory, we will unveil a street-drivable prototype of the Model S four door sedan. Our objective with the Model S was to create one of the most functional, intuitive and beautiful vehicles on the road. Tesla Roadster customers and select VIPs invited to the event will have an opportunity to judge for themselves firsthand whether we have succeeded.

Regarding funding, I am excited to report that the Department of Energy informed Tesla last week that they may disburse funds from our $350M Model S loan application within four to five months. The Obama administration has thankfully made it a top priority to move quickly on the Advanced Technology Vehicles Manufacturing loan program, as this will both generate high quality jobs in the near term and lay the groundwork for a better environment in the future.

This will keep us on track for production to start in 2011. As a gesture of gratitude for their early support, Roadster owners will receive a $10,000 discount off the price of the Model S Signature series and automatically be first in line for the sedan.

Read more…

Nearly 150 lucky customers took ownership of their Tesla Roadsters in 2008, but 2009 could be the best year yet for new owners, thanks to a wide range of tax incentives in the United States that in some cases shave 10 percent or more off the cost of the car. Read more…

The White House granted General Motors and Chrysler a reprieve Friday when it authorized $17.4 billion in emergency loans. President Bush said the alternative – the collapse of two American icons – was “not a responsible course of action.”

It’s impossible to say whether loans from the Treasury Department’s $700 billion financial stabilization fund will revive Detroit. No one knows whether Chrysler – which paid off its 1979 bailout loan and handed a nice profit to the federal government – can return from the brink again.

But the administration and Congress clearly charted a “responsible course” in preserving the Advanced Technology Vehicle Manufacturing Program. The $25 billion ATVM provides new and established automakers and suppliers with incentives so they may build fuel-efficient vehicles and get them to customers faster. It could also become a cornerstone of job creation for future generations:  U.S. manufacturing in the 21st century is likely to be based alternative-fuel, advanced technology vehicles that reduce our carbon footprint and reliance on foreign oil.

Tesla Motors has applied for about $400 million in low-interest loans to support two future projects. One would help finance a manufacturing facility to make an all-electric, zero-emission five-passenger family sedan – the precursor to a $30,000 all-electric, zero-emission subcompact. The second loan would help finance an advanced battery and powertrain manufacturing facility to supply Tesla’s EV powertrain to other automakers, both domestic and foreign.

The Tesla Roadster gets 244 miles at a cost of roughly $4 per charge, liberating drivers from petro-state dictators, OPEC-mandated price fluctuations and Big Oil oligopoly. It’s the only highway-capable, all-electric, zero-emission production car for sale today. Given such disruptive technology, it’s easy to understand why Tesla is – no pun intended – a lightning rod for debate. Some pundits say Tesla is somehow at odds with the rest of the industry.

In fact, the opposite is true. Tesla, which is already selling powertrains for use in other automakers’ vehicles, has a deeply vested interest in a robust economy and proliferation of viable automakers. If any manufacturer in Detroit, Tokyo or Stuttgart ceases operations, Tesla could lose a potential partner.

Last week, Tesla delivered its 100th vehicle — a humble but symbolic milestone confirming Tesla as the newest member of the global auto sector. Tesla profits from a dynamic industry – and I hope the bailout provides a catalyst for positive change in Detroit. Thanks to the ATVM, I also look forward to a profusion of fuel-efficient technology — breakthroughs that will ultimately benefit corporations, consumers and the earth.

I am very proud to be joining Tesla at this exciting time in the company’s growth curve. We are preparing for the delivery of our 100th customer car in the next week  or two, and 2009 promises to be a fantastic year for the company.

Having been a “car nut” all my life, I have a great passion and enthusiasm about what Tesla can bring to both the driver (enjoyable yet responsible car ownership) and the car industry (a new way of doing things, not burdened by the past).

I have a bit of a history in cars. Early in my career, I worked for Nissan, Rolls-Royce and Bentley. Over the years I’ve also owned more cars than I care to remember, including a fair few Italian classics. I’ve dabbled at car racing (badly), and I consider myself very fortunate to have the opportunity to spend a lot of time behind the wheel of a Tesla in the near future.

For the last twelve years I worked at Harley-Davidson, most recently as head of European operations. If there’s one thing I’ve learned at Harley-Davidson, it is the knowledge that great brands are only created when there is a real and lasting emotional connection between the company and its customers. That is what my team and I are here to deliver: We want to continue to understand what customers want in their Tesla, and then we plan to exceed their expectations and deliver a great ownership experience.

In the Roadster, we have a car that is way ahead of any other electric production car on the market. In our customers, we have advocates and enthusiasts who want Tesla to succeed in a challenging economic environment. That support is much appreciated. I know that innovation is never easy — but it’s also exciting and necessary.

In addition to the continued focus on Roadster deliveries in the United States, I will focus in the short term on the establishment of more U.S. service centers (particularly on the East Coast), and preparations for the first European customer deliveries in May 2009.

I very much appreciate your support and enthusiasm for Tesla, and look forward to meeting many of you in person at a Tesla event or showroom, or exchanging ideas in the blogosphere. This is a thrilling time to be joining Tesla, and I’m looking forward to the ride.

Michael van der Sande
Senior Vice President
Global Sales, Marketing and Service

When Congress passed the landmark Energy Independence and Security Act (EISA) in December 2007, the media and Capitol Hill focused heavily on the Corporate Average Fuel Efficiency (CAFE) standard. Congress increased the standard from 27.5 mpg to 35 mpg by 2020, marking the first time the CAFE average had been raised since the 1970s. Read more…

These are extraordinary times. The global financial system has gone through the worst crisis since the Great Depression, and the effects are only beginning to wind their way through every facet of the economy. It’s not an understatement to say that nearly every business will be impacted by what has unfolded in the past weeks, and this is true for Silicon Valley as well.

Read more…

The California Air Resources Board (CARB) is considering changes to the Zero Emission Vehicle Program (also commonly known as the “ZEV Mandate”). If you’ve seen Who Killed the Electric Car? you have an idea of what the ZEV Mandate is and how its implementation has been challenged and impeded by traditional auto manufacturers for more than a decade.

On March 27th, the Board met in Sacramento to consider CARB Staff recommendations for changes to the Mandate.  During the open hearing, the Board directed the staff to lower the minimum number of pure ZEV’s that the six largest automotive manufacturers are required to deliver in the period from 2012 to 2015 (known as Phase III) by 70% – from 25,000 to a mere 7,500! This is an absurdly low number given the emerging developments in the EV space, not to mention the progress we’ve demonstrated at Tesla Motors specifically.

Following the March 27th hearing, the Board directed the Staff to draft new regulatory language based on the Board’s decisions and then to open that draft language to a 15 day public comment period which opened on July 25th.Tesla Motors strongly disagrees with the Board’s decision, and with the Staff’s interpretation of that decision with regard to the Phase III minimum. We also object to other key provisions in the revised mandate as proposed by the staff. On August 11th, 2008, Ze’ev sent the letter below to outline Tesla’s position directly to CARB Chairperson Mary Nichols.

If you support Tesla’s position, you can help by calling Board Members or Staff, mailing, or e-mailing the Air Resources Board immediately. Read more…