By on May 2, 2008

not-for-sale.jpgI know it's a small point, but it's worth making. Of course, first you gotta party like its 1999! Automotive News [sub] follows the Tesla-friendly PR template, kicking-off their coverage by putting the Silicon start-up's failure to deliver ONE customer car into its improper context. "Close to the crawling 405 freeway and the congested corner of Santa Monica and Sepulveda boulevards, the Tesla factory store makes a potent statement for gridlocked Angelenos to buy an electric car. Of course, Tesla needs to get its two-seat roadster into serial production to give its dealership something to sell. The company has 600 sold orders and a waiting list for 400 more, but only four production cars have been built. A development glitch with the Magna two-speed transmission has forced a rapid redesign of a one-speed transmission in collaboration with Ricardo UK Ltd." Not so rapid, Mr. Bond. But that's OK. Ish. "By December, Tesla hopes to have 300 cars built. At that time, serial production of 150 cars a month should begin, said Darryl Siry, Tesla vice president of sales, marketing and service." [emphasis added]. Meanwhile, you want to hear something funny, in a "we're not entirely drunk on Tesla Kool-Aid" kind of way? "The sales staff is salaried," Mark Rechtin reports. "Not commissioned."

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20 Comments on “Tesla Birthwatch 45: LA Dealership Opens! So, Uh, Where Are the Cars?...”

  • avatar

    So, Uh, Where Are the Cars?

    They are on backorder and when that niche is filled, who knows.

  • avatar
    Steven Lang

    I’m pulling for them. If the product actually delivers (all pun intended) then they deserve kudos.

  • avatar

    I am not keen on this car. Electric car buyers are looking to make an envirnmental statement, not a performance hoonerama. Tesla is wasting the true potential of this car. It would be interesting if this (maybe) car had controllers for the acceleration and top speed so as to double the range. It is short- comings in range and not living up to claims for range that will deter people from going electric, not a lack of torque. I wish the Th!nk car could be made crashworhy and produced in numbers great enough to reduce its price. the Volt? We will never see it because GM doesn't give a toss about anything related to improving air quality. They are also tapped out. I shorted them today and walked away with a little chunk of change, almost enough to pay for the last repair on the last GM product I owned.

  • avatar

    Salaried sales staff? Good luck with moving metal err, carbon fiber…with that.

  • avatar

    The gist is I shouldn’t be interested in becoming a franchisee/dealership of Teslas?

    A friend wanted me to go halves to start a store specializing in corn stoves/furnaces 4 year ago. I talked him out of it.

    I think if I had to choose between the two right now, I’d pick the corn stoves.

  • avatar

    Its good that the salespeople are on salary. You can’t make much commission selling air.

  • avatar

    Four pre-production alpha/beta test cars hardly qualifies as “in production”.

  • avatar

    Say What?!?!
    Couldn’t you gals and guys see all that beautiful rolling art work? Why it’s all right there in the showroom for you to see. The Teslas are everywhere. I can’t imagine why you can’t see them.
    Oh, now I understand… they’re so fast… so silent… so ellusive… that you just can’t get your eyes to focus on them.
    Please leave your down payment in a brown envelope by the sales desk…
    We’ll be in touch.

  • avatar
    Sammy Hagar

    Yahoo ran a total fluff piece on the Tesla the last few days…headline “Electric Roadster does 125mph,” or something to that effect. Wonder if the writer even saw a vehicle or just went off a press release…

  • avatar

    Tesla and GM should merge. One is all dealerships and no cars, the other is all dealerships and no cars anyone wants.

    Wait, that won’t work.

  • avatar

    As many of you know by now, I’m a fan of the company and its product.

    But I don’t get it.

    The corner of Sepulveda and Santa Monica Blvd has to be one of the most expensive pieces of retail real estate in the nation. I mean, something like a billion cars an hour drives down there.

    Rent on a car showroom sized space there has to be pushing US$100,000 a month.

    So they build something that cost $2,000,000 in construction costs and are paying at least $1,200,000 a year in rent.

    All for a product that sells itself and that I’m sure 99% of its potential purchasers have heard of by now.


    I mean, it seems like just throwing money down a sinkhole.

    Maybe Elon Musk owns the building?

    Seriously, I’d really love to understand why they are doing this. It just seems like the most ridiculous idea I’ve ever heard. It’s more like a museum than a car dealership, no?

    On the bright side, I’d certainly have no problem wasting the salespeople’s time asking questions and drooling over the car just because, well, even if I were a genuine prospect he’d have no more ability to sell the car than to me – and he certainly wouldn’t lose out on a commission!

    The more I think of it, the more I think this is like a Sony Style store, to make people excited about Teslas as opposed to actually selling one. But why this company needs propaganda as opposed to salable cars is a very interesting question indeed.


  • avatar

    David Dennis: So they build something that cost $2,000,000 in construction costs and are paying at least $1,200,000 a year in rent. All for a product that sells itself and that I’m sure 99% of its potential purchasers have heard of by now. Why? NEVER underestimate the human capacity for hubris… When I moved to the UK, as a former CNNer, I thought I might scare-up some work as an auto reporter for the satellite TV start-up BSB. They had this brand new glass building just over the bridge from Sloan Square (the Yuppie locus for “Sloan Rangers”). BSB’s lobby was a particularly good exemplar of the “we have so much money we can be tastefully restrained yet WAY cooler than you are” corporate design. We’re talking underlighting, spot-lighting, minimalist furniture, a Hockney on the wall and just-so smoked glass in front of lots of cool looking satellite gear and dozens of monitors. The receptionist behind the desk was… something. Having picked electronic cotton for Massa Turner in the basement of his mansion on Techwood Drive, joining the company a few months before CNN flicked the switch, I appreciated the value of low overheads. Sky– BSBs competitor in the UK– was based on Ted's template, 24 hour news channel and all. So the instant I walked in that door, I knew BSB would be out of business in a year. They merged with Sky in a matter of months. Now, Tesla sells cars at $100k. Let’s say they MADE $100k per example. And sold 1000 of them. That would be gross income of $100m. Anyone here think that Tesla Motors has spent LESS than that so far? My bet is that they’re already selling pie-in-the-sky WhiteStaridtude to investors to sustain their cash burn. Meanwhile, there is no excuse whatsoever for spending ANY money on a dealership. Tesla has already sold all the production they haven't made. Even if someone GAVE them the building, the expenses of running a dealership are not inconsiderable. Care to comment Siry?

  • avatar

    Another useful way of putting it is that if they have somehow managed to sell and ship four cars (even this is questionable, but humor me), the cost of the dealership is more than the entire gross revenue of the company from completed cars. For the gross to match the operating cost of that dealer, they would have to ship 20 cars. They appear to be months away from that rather modest goal.

    Perhaps the motivation is actually to attract more investors by creating something to show off the cars in. I would think a factory tour would work just as well, and I certainly would not put millions of my (sadly non-existant) money into a car without checking out the factory/R&D facility.

    (Yes, I know Tesla is mostly made by Lotus in England, but the question is about where the battery packs and accessories are added in California.)

    I remember when CNN was young, its big cost effective step was to buy footage from foreign reporters for their international news. I remember being glued to the screen as the British guys right on the ship told us about their invasion of the Falklands. Talk about primary source coverage! Sometimes cheaper really is better.

    Well, hopefully Siry will give us a better idea of what’s going on.


  • avatar

    With a 15 month delivery queue, the store is clearly for marketing, not sales, which is why the salespeople (marketingpeople?) are not commissioned.

    I can’t wait until a “normal” person gets one and makes it available for a “real” review. Right now seems like all the early units have gone to founders and celebrities.

  • avatar

    Ole, at this moment there has been exactly one Tesla delivered to a customer, otherwise known as the company’s financier, who now controls the company.

    The second car is being specially painted, upon which it will be sent to the founding partner who they fired, Martin Eberhard.

    The third and fourth cars are in the ether, to be delivered any week now.

    However, the Roadster has now been reviewed by major automotive organizations and Jay Leno. From seeing the big grin on Jay Leno’s face in his video, I think it’s safe to say that Tesla nailed it in terms of performance and drivability.

    The interesting question is going to be long-term drivability. Lotus is known for making well-engineered cars with supple handling and great flair, but it’s not known for making cars that stay together. Furthermore, battery life seems to be a huge question mark. Some of the car’s magazine reviewers saw that with the highly spirited driving encouraged by the car, it didn’t seem to have anywhere near the claimed mileage per charge. I think some were getting only about 100 miles before having to plug in.

    I love the goals of this company, but I really miss Martin Eberhard. I felt that he was a Jim Jannard(*) type who was willing to tell us when he messed up, why and how he’s planning to do better. I get the very uncomfortable feeling that Elon Musk is more inclined to sweep things under the rug.

    But the goals still excite me, so you still see me here as a loyal Birth Watch reader.


    (*) Billionaire Jim Jannard created the revolutionary RED One Digital Cinema camera, proposed to be higher quality than $100,000 cameras at 20% of the price. Took people’s 10% deposits (around $1,750), saying “Hey, I don’t need the money but I need to know if someone other than me wants this camera”. 3,000 deposits later the camera arrives, about a year late, but exceeding everyone’s already lofty expectations and causing major bleeding at his competitors. Jim’s company has a lot of difficulty meeting demand and some cameras arrive months late. But they always arrive, and customers love them. Jim is notable for being forthright about delays, with a self-depreciating charm: “We’d be really dangerous if we actually knew what we were doing.”

  • avatar

    I’d love to see the books. I’m sure it’s not GM sized debt… but still.

  • avatar

    Santa Monica/Sepulveda Blvds: Brandberg Motors Kaiser-Frazer / Hellyer Buick / Lausen Buick / Dealership gone, replaced by high rise.

    One block north: Paul A. Ziegler DeSoto-Plymouth / Building remains used as office building.

    It may be expensive today, but from the 1930’s/80’s it sure wasn’t. The corner of: had two gas stations, a car dealership, a garage/used car lot/junkyard, a lumber yard, rancid old frame buildings, cheap bars, the RR tracks ran N-S-E-W.

    Time will tell if Tesla lasts any longer than what was there before.

  • avatar

    Since speculation is cheap, I’ll jump in too…

    Maybe Tesla is building a business to sell like the internet companies. Build a big business with investor’s money, never turn a profit but have a working design, and then sell out to a big buyer who wants a turn-key business.

    I REALLY hope that they are in it for the long haul though b/c I want them to prove the viability of electric cars. 200+ miles is plenty for me to go see grandma who is 100 miles and two TN mountains away).

    Hopefully this will lead to the WhiteStar which I hope is not really a WhiteElephant.

    It’s cars like the Volt (in four passenger form) and the Volt that will carry alot of us into the future. Electrics for short distances (

  • avatar

    So the Tesla has fancy new digs. Apple has lots of fancy Class A Retail showcase/stores, and many of them have been there for years. But then, they manage to move plenty of product.

    Doesn’t Tesla already spend enough on marketing hype? And don’t they get enough (generally fawning) publicity for free?

    Tom and Ray Magliozzi were allowed to drive a Tesla (on a public road, no less, and with no company minder in the car either) for a recent episode of Nova on PBS. I’ve read (here) that there was only one working Tesla, but the one the drove was a different color from the one I’ve seen in stock PR footage.

    Tesla must have repainted it before the Tappet Brothers took it for a spin.

  • avatar

    CJDumm, the Teslas there were prototypes (both the red one you see Martin driving and the black one Click and Clack get to drive.

    I would have liked to have heard more reaction from Click and Clack after the test drive, and sadly thanks to the short range, they couldn’t have made it to Mexico.

    Incidentally, Production 1 (P1), now driven by Elon Musk, is black just like the one Click and Clack d rive, but the video admits all the cars shown in it were prototypes, and the presence of now-fired Martin Eberhard dates the video from long before P1 was even made.


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