Tesla Roadster: 1,650 Down, 750 To Go
In one of its latest SEC filings (a prospectus for an offering to fund development of the “Model X” CUV), the EV firm Tesla notes
We currently intend to end the production run of the Tesla Roadster in December 2011, but we will continue to sell the remaining inventory of Tesla Roadsters in the first half of 2012.
The Detroit News notes that, if Tesla keeps its “mid-2012” launch date for its Model S sedan (which was initially supposed to go on sale this year), it will have to endure a six month gap with no new production… and if more delays come, that “dead zone” could extend longer. And though Tesla plans on replacing the money-losing Roadster sometime during or after 2013, that won’t necessarily be easy…
The DetN explains
For the Roadster, Tesla has obtained gliders from Lotus of Britain, which uses the same body for its Elise sports car. But Lotus is retooling for a new Elise, and Tesla’s contract for 2,400 gliders expires at the end of this year. Expanded over a year ago from an earlier deal for 1,700 gliders that would have expired in March, the agreement lets Tesla keep Roadsters in showrooms longer. But the end of the supply of Roadster gliders “sheds light on how Lotus views the relationship,” said Kevin See of Lux Research. If Lotus saw the Roadster and Tesla as an important revenue source, he said, “it would find a way to keep those gliders coming.”
Tesla’s take on the situation (from its last S-1 filing):
We expect 2011 sales of the Tesla Roadster to grow over 2010. We have a supply agreement with Lotus to purchase 2,400 Tesla Roadster vehicles or gliders, and through March 31, 2011, we have delivered approximately 1,650 vehicles to customers. Our present plans do not call for the purchase of materially more than 2,400 gliders from Lotus. We currently intend to manufacture the majority of our gliders with Lotus for our current generation Tesla Roadster until December 2011, and we intend to use these gliders in the manufacturing of the Tesla Roadster to both fulfill orders placed in 2011 as well as new orders placed in 2012 until our supply of gliders is exhausted. Accordingly, we intend to offer a limited number of Tesla Roadsters for sale in 2012. We currently anticipate that sales of the Tesla Roadster in North America will end by the end of 2011 or shortly thereafter.
As we have a limited number of the Tesla Roadster left for sale, we anticipate our automotive sales may decline, potentially significantly, just prior to the launch of our Model S. The launch of our Model S could be delayed for a number of reasons and any such delays may be significant and would extend the period in which we would generate limited revenues from sales of our electric vehicles.
To the extent we wish to sell additional Tesla Roadsters with the Lotus gliders beyond the number of vehicles we have contracted for, we will need to negotiate a new or amended supply agreement with Lotus but may be unable to do so on terms and conditions favorable to us, if at all.
Particularly noteworthy is Tesla’s decision to end US sales of the Roadster this year, and sell the remainder in overseas markets. According to Tesla’s CFO (quoted in the DetN), the firm sold more Roadsters abroad in the first quarter than in the US market, an inversion of the previous dynamic. And we’re already hearing reports that some of Tesla’s US markets, specifically Boulder CO, may be “tapped out” (gee, I wonder why…). In short, the $100k electric sportscar market in the US may not be that much bigger than 1,500-1,600 units. Meanwhile, the fact that Tesla has been selling in Europe since 2009 indicates that Europe could be as tapped out as the US, and that the new international Roadster sales are coming from new markets like Japan and Australia. But then, since the company stubbornly refuses to release any sales data (because Tesla is a real car company… it’s just different), we’ll probably never know.
Meanwhile, Tesla is desperately validating its forthcoming Model S sedan… which has already received a styling refresh. Fans of the firm had better hope that demand for the larger, cheaper electric sedan is quite a bit stronger and more sustainable. Pricing has been tipped at about $60k for a 160-mile range version, $70k for a 230 mile version and $70k+ for a 300 mile version… and while lower prices are nice, shorter ranges might actually limit sales more. Into the unknown!
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I'm glad Ed mentioned that Tesla abandoned its showroom in Boulder - it tells you a lot about where the fortunes of this company are headed. For anyone familiar with Denver, Boulder is on the northern edge of the metro area, and demographically, it's very affluent and VERY liberal politically. People up there are VERY eco-conscious and are also extremely athletic, which is a plus, since getting in and out of a Tesla is something best left to Harry Houdini or someone with less than 5% bodyfat. If I were selling expensive eco-mobiles in the Denver area, that'd be my first choice for a location. They moved the showroom to Park Meadows Mall (near where I live), which is probably 50 miles away, on the south side of the metro area, and while it's an affluent area as well, it's 180 degrees different from Boulder - it's right wing Valhalla down here. And, to be kind, let's just say that the athletic obsession of folks down here is somewhat less ardent than it is up in Boulder. There's a reason why the family car of choice down here is a duded-up four door mega-pickup or sumo-sized SUV. I'll leave it at that. So, that brings me to visiting the Tesla store in the mall. The good news: it's right across from the Apple store, so you get lots of tech-gawkers. The bad news: wheeling one out the front door for a test drive might endanger the lives of your fellow shoppers. They actually had a couple parked outside the mall (unattended and open, with the tops off, which may not be the best idea for $100,000 sports cars) as demonstrators. The store itself is teched out and eco-chic, festooned with plenty of touch-screen monitors for prospective buyers to configure and even buy their Teslas with. Yes, buying a $100,000 car is now self service, apparently. There were all manner of friendly-looking, model-quality male and female employees in unisex garb handing out a small brochure on the four door model. The young lady who greeted me was quite attractive, but when I asked her about the technical aspects of the car, she launched into an amazing imitation of a cast member on "The Hills" ("well, like, you know, it's like this car is just so, like, cool and like, really fast, and I'm, like, so happy it's good for the environment, you know?"). When that interaction lost its amusement, I began watching the mall-goers checking out the cars. Remember how I said that an obsession with athletics was not "the thing" in this part of town? You haven't lived until you watch some heavy-set dude in a Troy Tulowitzki jersey try to get in and out of a Tesla. (Full disclosure: I AM one of those heavy-set guys, but I'm way too vain to even debase myself like that) After a couple of folks of this general girth tried their hand, I noticed that the eco-chic sales staff was all watching with barely concealed horror and amusement on their faces ("Like, oh my God, that guy is going to like need a crane to climb out."). How does all this bode for Tesla's continued success in my neck of the woods? I'd say it has about as much chance as the Gore, Kerry and Obama lawn signs that mysteriously disappeared from my front lawn. Why they'd try selling this ridiculously expensive eco-mobile in the heart of "Drill Baby Drill" territory is absolutely beyond me. Which leads to a question: why this mall? I mean, if you want to reach highly affluent people in Denver that have an eco-bent, why not try downtown Denver? If you have to be in a mall, why not Cherry Creek, which has demographics far more favorable for actually selling these cars? The reason is that the rental in either place would have been much higher. Basically, Tesla probably took this space because it was available and cheap. What does that tell you about a company that's trying to sell six-figure eco-sports cars? It tells me they're desperate.