Tesla Death Watch 28: WhiteElephant's Rump Revealed

Robert Farago
by Robert Farago

Now that the economic downturn has liberated Tesla Motors’ inner Curly– we’re a victim of coimcumstance!– CEO Elon Musk has finally admitted what TTAC said all along: they’re not making a dime on the $109k Tesla Roadster. OK, the self-annointed CEO says they weren’t making a profit. In fact, Musk tells BusinessWeek that the EV maker was $40k over budget per vehicle. Which would make it a break-even proposition. Yes, “Tesla had to delay the launch by six months while it looked for a way to make the car profitably. Musk fired founding CEO Martin Eberhard and brought in as interim chief Michael Marks, an executive at electronics maker Flextronics International.” And now Musk is busy re-writing recent history. “A few weeks ago, Tesla seemed to be on the road to making that [world domination] happen. Musk had verbal commitments for $100 million in private capital, federal loan guarantees geared at jump-starting development of alternative vehicles, and thoughts of going public next year.” OK, that brings up to Musk’s favorite time period: the future!

“Our sedan will crush everything out there,” Musk says. What sedan you ask? Good question. “Musk insists Tesla’s next models will be irresistible. The Model S will go up against formidable competition—cars such as the Lexus GS 450h hybrid, the diesel Mercedes E-class, and the Chevrolet Volt. Not that those cars feature Tesla’s neck-snapping acceleration and running cost of 4 cents a mile.” That’s assuming of course, a) Tesla builds an EV, I mean hybrid sedan and b) it has neck-snapping acceleration and running costs of four cents a mile. Anyway, TTAC has one piece of advise for Tesla; the same advice we gave them at the beginning: raise the price of the Roadster. If that works out, can we test one, as Daryl Siry promised? No, I didn’t think so. Corporate culture eats strategy for lunch.

Robert Farago
Robert Farago

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  • Robert Farago Robert Farago on Oct 24, 2008

    optic: Yes. Done. Apologies to all involved for getting it wrong. Although I take NOTHING Musk says at face value.

  • Optic Optic on Oct 27, 2008

    thanks for the correction, Robert. the article is still pretty devastating for Tesla.

  • Bd2 Probably Toyota, Hyundai is killing them these days.
  • Bd2 Japan is evil, stop buying their vehicles. I hope TTAC has a holiday for PEARL HARBOR.
  • Wolfwagen If Isuzu could update this truck and keep the cost between $25K - $30K they would sell like ice pops on dollar day in a heat wave.
  • 3SpeedAutomatic I'm at that the inflection point of do I continue to putting money in a 12 yr old SUV entering a heavy maintenance cycle or start shopping.I have noticed comparable new SUVs with $2.5k knocked off the sticker price, but still with the shenanigans of $300 for nitrogen in the tires. However, I have noticed the same 2 yr old SUV which are only $4.5K less than the original sticker price. Usually the used cars price should be 35% to 40% less. This tells me there's a stronger market for used as opposed to new. Part of this is to handle the monthly note. Considering installments of 72 months, you'll never pay the beast off. Just wait till the end of the model year which is just two months away, and I think the comparable new SUV will come with larger markdowns. May not be the color you want, but there are deals to be made. 🚗🚗🚗
  • Bd2 Man, Anal sure has been busy...