Elon Musk: Next Six Months Crucial to Tesla's future

http://www.technologyreview.com/view/428882/elon-musk-next-six-months-crucial-to-teslas/?ref=rss

by ca98am79 • 14 years ago

89 80 14 years ago

pwny2• 14 years ago

Elon Musk, I forbid you to let Tesla fail before I can afford to buy a model S.

atae2• 14 years ago

If he knows it's going to fail, he should consider putting a death ray on a militarized Model S with bullet proof windows. Maybe with optional retractable VTOL (Tesla's last patent) side lifters. He could probably sell it to the US government and save Tesla.

MartinCron3• 14 years ago

I'm sure that Bruce Wayne would buy one, maybe two.

davidp• 14 years ago

I think he may have just tanked his chances. People buying cars in that price range 1) expect to have mechanical service available for the foreseeable future, and 2) don't like to be associated with losers. You don't want to drop $90k on a cool new car and then six months later have your friends roll their eyes or pity you when you roll up at the party.

nagrom• 14 years ago

It seems like an odd interview to give; almost more like a rallying call to staff than a marketing pitch to the public. But whenever I've seen an interview with Elon Musk, he's always been extremely honest. Maybe he's not thinking this through as a marketing pitch and just being honest about the challenges ahead?

pwny2• 14 years ago

It reads to me like he's conscious of the challenge his company will face rather than admitting defeat. This is a good thing.

I also expect the man whose other company sends stuff into space to be able to lead this one to overcoming those challenges.

corin_2• 14 years ago

Point one is valid, but point two: surely if the company dies then the exclusivity feel of your car goes way up, and it becomes more cool not less.

ednc• 14 years ago

Agreed. I'd still love to have a Delorean.

bengl3rt• 14 years ago

Until you need a replacement part, and they're out of production...

For a discontinued car (or, a car made by a defunct company) to still be drivable, there needs to be a sufficiently large community of enthusiasts around it that have figured out how to fabricate the parts that are no longer available.

Now, this has certainly happened. Lots of cars from the 1920s and on are still on the road, and a cottage industry has sprung up around keeping them running. However, the defining feature of these cars is that a substantial amount were sold.

Getting parts made in the future for a very unusual and technologically advanced car like a Tesla if the company is no longer around is going to be very expensive indeed. It will cross from being a daily driver to being a project car, and the owner will need to be very dedicated to the project.

manaskarekar• 14 years ago

Are you familiar with the Tesla strategy mentioned by him in a some interview?

Their goals are:

- High price low volume car.

- Medium price medium volume car.

- Low price high volume car.

They seem to be on their way.

Also the article claims he said 'It's going to be tough.' He has always been pretty straightforward with that. Check out any of his interviews.

Check out his interview after Falcon 1 failed http://www.wired.com/science/space/news/2008/08/musk_qa

An excerpt from that:

"Wired.com: At the end of the day you're still zero for three; you have so far failed to put a rocket into orbit.

Musk: We haven't gotten into orbit, true, but we've made considerable progress. If it's an all-or-nothing proposition then we've failed. But it's not all or nothing. We must get to orbit eventually, and we will. It might take us one, two or three more tries, but we will. We will make it work.

Wired.com: How do you maintain your optimism?

Musk: Do I sound optimistic?

Wired.com: Yeah, you always do.

Musk: Optimism, pessimism, fuck that; we're going to make it happen. As God is my bloody witness, I'm hell-bent on making it work."

Gring• 14 years ago

That's the spirit! :-)

Retric3• 14 years ago

Considering the next 2 launches where successful I think he had reasonable expectations at the time. As CEO your in a strange place of needing to be advertise and create a positive image without creating unrealistic expectations so people trust what you say in six months.

rdl• 14 years ago

I think this is Elon Musk defining a "problem" which he knows he can solve successfully. By defining the problem as "can we sell 20k cars/year", he'll be able to point in 6 months that "yes, we did sell 20k cars, and in only 6 months".

The big open question (which Tesla doesn't want to set as the benchmark for success) is selling a mass-market car (the next one). I'm confident Tesla can do a 50-100k unit/yr high end product ($40-100k) on its own, eventually, but building a $20k car and shipping hundreds of thousands is a different matter.

startupfounder• 14 years ago

This is the issue: charging times & price point.

To sell units beyond their first adopters they need to address key issues with electric cars (and I am all for EVs). What they need to do is license their technology to Ford and GM to get mass market appeal and to help build/develop EVs in the $20k range. As the article states, "It projects selling 20,000 cars next year, which is a relatively high number among luxury brands."

This is really what is going to happen: the will be acquired by a larger brand.

Retric3• 14 years ago

I live on the east coast and I am staring to see a fair number of charging stations in garages. So far it's mostly for corporate cars but I have been thinking Car sharing services could be well served by going electric. They generally own the parking space, the car is moving short distances, but while plugging them in is easy refilling the tank is something of a pain. It's probably not a huge market but selling say 5k cars per year to that market seems vary doable with the added bonus that initial costs are less important.

draggnar2• 14 years ago

Car2go, which is part of Daimler, is doing this in some cities with their Smart-car car sharing program (some cities use both electric and gas Smart cars). Tesla technology is in the Smart EV's.

at-fates-hands• 14 years ago

"It projects selling 20,000 cars next year, which is a relatively high number among luxury brands."

Actually this is quite low. BMW sells around 110K units a year in the US alone - http://online.wsj.com/mdc/public/page/2_3022-autosales.html

Although I do agree the best bet for the survival of the technology is to get bought by a larger brand.

twoodfin• 14 years ago

> Actually this is quite low. BMW sells around 110K units a year in the US alone...

I could be wrong about this, but I suspect the median selling price of a BMW in the U.S. is about $10,000 less than the cheapest Model S. Selling 20,000 cars that start at $50K would be a feat.

cynicalkane• 14 years ago

BMW has 10 different models, and their best-seller--the 3 series--has a considerably lower base price than the Model S.

racbart• 14 years ago

I wouldn't buy a car if I expected the company might be dead in six months. Who'll service my car then? This isn't a well-known and old brand with independent service centers. Did Elon Musk just told me not to buy their cars? Thanks for the tip.

pbreit• 14 years ago

A fair concern but probably unwarranted since a larger company would snap it up at some price. And then you might actually have better (more, at least) service options.

akandiah• 14 years ago

If gas prices do not rise, Telsa will be in trouble.

draggnar2• 14 years ago

Not necessarily. What Tesla is proposing is a better car. The Model S is safer, more comfortable, and more practical. The demand is clearly there, at this point it is a question of if Tesla can deliver.

nhebb2• 14 years ago

> The base price is just under $50,000 after factoring in a $7,500 tax credit. But models with a large enough battery to allow for a 300 mile range will be priced at $87,900 after the tax credit.

Great. So American taxpayers are essentially subsidizing luxury automobiles.

zefhous• 14 years ago

The subsidies are for plug-in electric vehicles in general. They apply to other cars like the Nissan Leaf and Chevrolet Volt as well.

http://en.wikipedia.org/wiki/Government_incentives_for_plug-...

zach• 14 years ago

We should subsidize things that are already affordable instead? Um...

aggronn• 14 years ago

Or rather we should subsidize things that need to be affordable. Luxury cars are explicitly not meant to be affordable, so his point stands. What both of you have missed is the actual reason for subsidy, which is the fuel efficiency.

InclinedPlane• 14 years ago

Yes. But so what?

What we're actually subsidizing is R&D on electric vehicles. The problems that Tesla is struggling with (battery longevity, battery cost, charging cycle times) are fundamental problems of all electric vehicles. If a government subsidy for their luxury vehicles helps them improve the state of the art even incrementally then it will be a huge win for the public.

MartinCron3• 14 years ago

American taxpayers are essentially subsidizing luxury homes, as well. At least this has the benefit of helping to advance alternative transportation technologies.

surrealize• 14 years ago

It's more like we're subsidizing the electrification of luxury automobiles. Thinking about it in marginal terms makes it clearer. If the tax credit weren't in place, would model S buyers be getting a VW Golf instead? Probably not; they'd be getting some gas-guzzling jaguar or something.

The tax credit isn't paying for people to get nice cars, it's paying for people to get electric cars.

ttunguz• 14 years ago

The big challenge no one speaks about is the auto workers' unions which will change the cost structure to produce these cars. This cost increase is coming in the next few years.

jwooden• 14 years ago

I disagree, although it may be potentially a problem in the future. It seems like Tesla however isn't using manufacturing techniques/processes that the rest of the industry follows. Most of the assembly is done using advanced robots, the cost increase seems to be the support and the development of these robots.

The reason I appreciate tesla, is because it doesnt have all the legacy and baggage a traditional car manufacturer has, and thus they have the ability to try bold things. On top of it, they are doing it all in america.

andrewtbham• 14 years ago

Most car manufacturers have production plants in the US. I live in Alabama there are Mercedes, Honda and Hyundai plants. BMW is in South Carolina. Toyota Prius is built in Mississippi.

The land and power are cheap, the wages are reasonable and there is not a lot of union activity.

kylecordes• 14 years ago

It seems to me that the critical period for persuading people to buy them, is down the metaphorical road a bit. At the moment it appears from their web site that they are still selling "reservations". There is a nice video on their web site celebrating delivery of some cars - which I think implies they aren't just handing them over to willing buyers yet.

The hard part starts when all that is past: when they build enough cars to have them sitting at dealerships, either being bought or not.

(For that matter, if they really want revenue, why not keep churning out the Roadster? Surely there would be a few thousand more people willing and able to buy one.)

Synthetase• 14 years ago

Demand is not an issue. There were 12,200 reservations as of July. That's enough to keep busy for the rest this year and into Q2 of next year. If demand were truly an issue, we would see some sort of advertising spend. When was the last time you saw a Tesla TV commercial?

The next six months are critical because it determines whether or not Tesla can be a profitable venture. Can they make a profit with full production? If they have any unforeseen expenditures they are screwed. If there are any recalls, they are screwed. However, I am pretty confident Tesla will be able to pull through given their track record.

andyl• 14 years ago

I appreciate Musk's honesty. I've seen many critical situations where leaders fudge to make things seem more stable than they are. I'm rooting for Tesla's success.

atae2• 14 years ago

What's stopping Elon Musk from working with Shai Agassi at Better Place? Doesn't Shai have an open offer for a $3-4 billion contract for a US automaker to produce an electric car that works in their battery-swapping station network?

I realize the offer is to a major US automaker which is much different but it just seems like a brilliant billionaire like Elon Musk and an amazing entrepreneur like Shai Agassi (who has raised $900MM+) could pull it off.

mgallivan• 14 years ago

This might seem obnoxious but I'm sure Mr. Musk has a number of celebrity acquaintances. Surely their help would put him well on his way to 20,000?

wmf• 14 years ago

I suspect they're having no trouble selling cars; the only question is whether they can manufacture the cars they've already sold.

tocomment• 14 years ago

Here's a creative idea to partially solve the charging problem. Have people buy the fast chargers for their homes, and then get listed in a database where people could stop by and pay for a charge on their travels. It would be like AirBnB but for charging electric cars.

schiffern6• 14 years ago

Why would I buy a fast-charger for my home? It will never pay for itself in fees, and you don't need one at home – overnight charging meets essentially everyone's needs in that case.

Edit: just to be clear, I support people sharing their chargers. But fast charging is overkill.

sukuriant• 14 years ago

... because it allows for an 80% charge in a very short amount of time... you're extending the infrastructure of places you can charge Teslas; and if you monetize it ($15-20 for full, fast charge) then you're making money.

beefman3• 14 years ago

The proposal is about sharing your charger -- is it going to be a sleep-over? Hey, that really would be like Airbnb.

CamperBob25• 14 years ago

IMO, the whole idea of electric vehicles is a waste of time unless the government (or at least a dominant market player) steps in and standardizes battery sizes for fast replacement at existing service stations. It should take less time to recharge an EV than it does to refill a gasoline tank, not more.

Anyone who has ever exchanged a propane cylinder for their backyard barbecue should understand why this is the only conceivable way to make electric vehicles work. I can't begin to imagine why I'm the only person who actually thinks that way.

therealarmen• 14 years ago

That's exactly what we're doing at http://www.plugshare.com. Check it out. The blue icons are residential charging stations and the green icons are public charging stations. Over 2,000 people have signed up to share their home electricity with EV drivers in need of a charge.

ljd• 14 years ago

I like your site but I would love to also use your site as a reference point for setting up my own station. I imagine you can monetize this lead generation process in some way as well.

elchief2• 14 years ago

I work with a car dealer and he said that one cannot import a Tesla to Canada. Anyone know why? Thx

colmvp• 14 years ago

Are you sure about that? Seems like it is becoming possible.

http://www.teslamotors.com/forum/forums/canadian-pricing-out...

Also: lol at the price. I get why it's that expensive (tariff, taxes) but wow, I can't see them moving many.

elchief2• 14 years ago

Maybe he meant "at a reasonable price"

allertonm• 14 years ago

Do you mean import used? They are on sale here: http://www.teslamotors.com/en_CA/canada/

BigTuna• 14 years ago

Ctrl-F "Friedman Unit"

0 results.

HN, I am disappoint.

bubbleRefuge• 14 years ago

Heard on NPR that batteries on EV's can only be charged around 500 times. This came from that Berkley professor that was a global warming skeptic until the recent conclusion of a research study -that he participated in- indicating that most of global warming was caused by fuel burning. Of-coarse the study was funded by the Koch brothers and proposed that the world move to natural gas. It wouldn't surprise me if the Koch brothers have large investments in natural gas. Does anyone know if the battery charge comment has any validity?

schiffern6• 14 years ago

All lithium batteries are not created equal. LiCoO2 batteries indeed have charge-cycle lives in the hundreds, but LiFePO4 batteries (as seen in the Volt, Leaf, etc) can reach 10,000 cycles or more.

All this depends on charge/discharge rate, temperature, etc. The Roadster's complicated battery system is required because they used LiCoO2 batteries. :\

Retric3• 14 years ago

The electric cost of a charge is ~2$, and you get ~250 miles a charge x 500 = 125,000 miles for 1,000$. Assuming 3.5$/G gas + 30MPG + 125,000 miles costs 14,500$. That leaves ~13,500$ to pay for the next battery pack and the overhead charging.

PS: The real issue is it's not a smooth transition, but if you assume the 2nd battery pack is not worth it you get 250,000 miles including 1 replacement pack.

beefman3• 14 years ago

The battery pack costs more than that, alas. The price may come down as the scale of recycling (and hence, the amount recyclers can pay for used batteries) goes up. The price per Wh for Li-ion has also been falling at a fairly steady rate. And of course, gas prices may go up.

We should also consider the depreciation of components in a conventional car that the electric drivetrain replaces. They should depreciate faster because they are less efficient and must deal with the additional heat they dissipate. They require an intake and exhaust system, complicated transmission, pumps, valves, lubricants...

beefman3• 14 years ago

Yes, that's approximately correct. The shortest-range S gets 160mi per charge. 500 * 160 = 80,000 miles, which isn't bad for the first scheduled maintenance. In fact, Tesla guarantees their batteries to 100,000 miles. If the battery costs $20K to replace, well, a gas engine + transmission + exhaust system in a $60,000 car depreciates as much in that time, too.

anamax3• 14 years ago

> If the battery costs $20K to replace, well, a gas engine + transmission + exhaust system in a $60,000 car depreciates as much in that time, too.

A Tesla with a failed battery is $20k away from being a useful vehicle. A depreciated Jaguar is a driveable vehicle.

And, even with a new battery, a 3-5 year-old Tesla isn't worth as much as a new Tesla (even if we ignore the likely advances in 3-5 years).

lazyjones• 14 years ago

They should launch in Europe earlier, we spend a lot more money on cars here, have shorter daily routes (guessing!) and care a little more about fuel costs (more expensive here).

Elon Musk: Next Six Months Crucial to Tesla's future

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