By on October 2, 2015

press03-model-x-front-three-quarter-with-doors-open

The world is abuzz this week with news of the all-new Tesla Model X, which is a minivan that looks like it may at any moment take flight and get tangled up in some power lines.

Yes, ladies and gentlemen, that’s right: Tesla has brought the first gullwing minivan to market, and people are excited. And not just slightly excited. Elon Musk is giving press conferences to delighted admirers. Tesla fans are running up and down the streets in Palo Alto screaming “THE TESLA IS COMING! THE TESLA IS COMING!” And Pacific Gas & Electric engineers are currently on the job trying to figure out how to get the first Model X down from some high-voltage wires near Tarzana.

Essentially, it is Tesla pandemonium.

But there are a few, shall we say, problems with the Model X. One of them is that these doors — which undoubtedly are at the heart of massive delays that have pushed back Model X production considerably — are so unconventional that they may end up turning people off.

Yes, they make it easier to get out of the car in tight spaces. But they open so high that I wouldn’t be able to fully release them in my tight garage. They also ensure you won’t be able to mount roof racks on your Model X: instead, you’ll have to use an enormous carrier that sticks out well past the rear bumper. And then there are the potential reliability concerns that come from buying a new piece of technology from a relatively new company.

Those aren’t the only issues. Maybe the biggest problem with the Model X is its price tag, which starts at a rather steep $130,000. You may have thought the Model S was a car solely confined to the wealthy, but the Model X brings things to a whole new level: there isn’t even some “entry level” $70,000 model to make it seem like it’s available to normal folk who want to own a cool new electric minivan.

Tesla’s problems go beyond the Model X. Remember when the Model S came out, and it was the coolest thing on earth, and you stopped to watch it go by whenever you saw one on the street? Well, that was several years ago, and it isn’t quite as cool anymore. These days, you probably don’t give the Model S a second look — and why would you? They’ve become totally ubiquitous, just like the Mercedes S-Class or BMW 7 Series.

Unlike the S-Class or 7 Series, though, the Model S probably won’t be getting a redesign anytime soon. While it should be slated for one next year, Tesla has certainly devoted all of its engineering effort to the Model X — proven by the fact that no Model S development mules have been spotted and Tesla hasn’t said a word about a Model S replacement.

Now, I don’t want to make it seem like I think things are all doom and gloom for Tesla. On the contrary, this automaker has done what nobody could fathom merely 20 years ago: create a totally new car company, with a totally new product, and get people to buy it. It’s amazing — and it has one of the most excited, energized fan bases around.

And the cars are excellent. The Model S is fun to drive and full of technology that makes even today’s most cutting-edge cars seem like they aren’t quite there yet. Let’s be honest: The gullwing doors, while potentially cumbersome, are pretty damn cool.

But I’m wondering if Tesla is “safe” just yet.

With only one new product and one (aging) product that may not find a replacement soon, Tesla doesn’t have much to hang its hat on. Combine this with the fact that Tesla has yet to turn a profit — and likely won’t until 2020, according to Elon himself — and you have to wonder whether Tesla really will survive.

Some people may call me crazy, considering that Tesla has already sold so many cars and created such a fiercely loyal owner and fan base. But what if there’s some widespread problem with the gullwing minivan? A GM ignition defect, or a Takata airbag recall, or a VW emissions scandal, perhaps? What if people don’t buy it in the numbers they’re hoping for? What if the idea of a $130,000 family SUV just doesn’t sit well with consumers, no matter how cool the doors are?

Could Tesla still fail, even this far into the game?

Or with its reputation so strong and brand loyalty so cemented, have they finally reached a safe harbor where we can now accept them as the fourth American car company?

Get the latest TTAC e-Newsletter!

161 Comments on “QOTD: Could Tesla Still Go Under?...”


  • avatar
    VoGo

    Fourth American car company? I count Ford and GM, but what’s the third?

    The market says Tesla is worth $31B. For reference, GM is $48B and Ford $55B.

    • 0 avatar
      28-Cars-Later

      House of cards.

    • 0 avatar
      krhodes1

      Market cap for any “tech” company is 90% bullsh!t on a good day. Amazon is worth 240B right now. They have never made any money either.

      • 0 avatar

        You are kidding right? How Amazon survived for so long and terminated lot of brick and mortar and online retailer? How Jeff Bezos founded “Blue Origin” and solely finds it? We are talking here about rockets, rocket engines and spaceship. Blue origin is going to supply engines to ULA (other option is to get engines from Russian companies). Essentially Blue Origin is competing with Russian companies which are advanced in rocket engine design that their American counterparts. Boeing, LM cannot compete with Russians but Blue Origin (and SpaceX) can. And both are from Silicon Valley which had no prior experience in making rockets and spaceships.

        Amazon invests lot of money into expansion and new technologies. And besides from http://fortune.com/2015/07/24/jeff-bezos-net-worth-amazon/ :

        “Amazon had a great second quarter.

        Amazon had an excellent second quarter and CEO Jeff Bezos is reaping the benefits. In fact, reports state that his net worth has skyrocketed by as much as $7 billion over the last day thanks to shares of the e-commerce giant soaring.

        Bloomberg reported earlier Friday that Bezos’ wealth now exceeds $50 billion because of the news the Amazon earned $92 million in profit during the last quarter.”

        Tesla is developing new disruptive technologies which will cause a lot of trouble for traditional UAW organized companies. Never discount what happens in Silicon Valley too early – you may regret it.

        • 0 avatar
          indi500fan

          As a fairly long time (7yr) Prime customer at Amazon, I’ve noticed in 2015 that you can find a lot of things cheaper (sometimes substantially cheaper) elsewhere. I believe they think they have reached critical mass and are cranking up the prices. Will be interesting to see how this plays out.

  • avatar
    RangerM

    Any company can spend its way into bankruptcy. But, I suppose so long as Uncle Sugar keeps writing checks to people who can afford them, the products will continue to sell at a high 5-figure cost of entry.

    • 0 avatar
      carguy

      +1: Without the government dollars, Tesla would not exist.

    • 0 avatar
      Pch101

      The cars are expensive because they have to be. Low volume and low prices don’t go together.

      One of the drivers here is high battery prices. I presume that Musk is betting that the price of power storage is going to fall to the point that the cars can become profitable.

      • 0 avatar
        hgrunt

        The CTO of Tesla has essentially confirmed, in an interview, their strategy is to push the cost of energy storage as low as possible…at least until a newer better technology comes along, but that isn’t likely to happen for a while. It’s not necessarily just for the cars, but also for the Powerwall, which benefits Solar City as well. They’re probably a healthy 10 years ahead of the competition in the electric game at this point.

        • 0 avatar
          pragmatic

          Powerwall is a part of the Tesla smoke and mirrors show. Non-lithium technologies provide cheaper storage when weight is not an issue, especially if rate of discharge is lower. Both of which are true for ho,e power applications.

          • 0 avatar
            wmba

            Couldn’t agree more. The new Volt’s cells are next generation compared to Tesla’s 18650. A 3.3 kWh battery slung on the garage wall might be good for a 4 or 5 hour power outage. People haven’t got the foggiest notion of what’s going on and believe in Musk’s BS.

            The Germans are well into EV R&D and will eat Tesla for breakfast in about 3 years. Doesn’t usually pay to be “first”, because others now know what’s practical and figure out better ways to do it.

  • avatar
    heavy handle

    Could Tesla fail? What a dumb question, of course they could.

    GM could fail, VW could fail, Toyota could fail. What’s your point? Should we let fear keep us from living our lives?

    • 0 avatar
      TrailerTrash

      The car version of Mont Blanc pens…. All show around the clubs.

      And the real question is do they EXPECT to fail? Or, to be more exact, does Musk expect the whole thing to fail and really knows this is a short game for him?
      I think he knows full well this is just to get his cash and to sell soon. Nobody really thinks this is a long range car company…it has to be the battery industry play at work here.
      Get the cash, get the investment, then sell the entire package and live the rest of your life saying the company would have survived IF you had stayed with it.

      This X? Hell, you cannot even open the doors if you have any slight snow on the roof…it will fall into your 123K interior onto your expensive brats sitting in the back seat.

      Over 5300 pounds of rich folks jewelry…

      • 0 avatar
        LuciferV8

        “Over 5300 pounds of rich folks jewelry…”

        Yes, indeed. But they will shell out for it. $150 is a small price to pay for that oh-so-important signalling.

  • avatar
    bunkie

    Tesla has another product, one that, compared to the Models S or X, is much less expensive and has a very large potential market: the home power systems.

    It’s a bit early to tell, but that one could invent an entire new market.

    • 0 avatar
      Quentin

      Their home power solution will have to go a lot further than it currently appears to go. They really need to expand on that to close the loop if they want to make the battery wall a “must have”.

      • 0 avatar
        bunkie

        I disagree. It’s stackable and when installed in locales that offer off-peak rates, the economics are pretty good compared to permanent backup generators.

        As I said, it’s early, but the idea is solid.

        My point was to point out that Tesla is more than a car company. Products like the home battery open up new markets that could, theoretically, create huge cash flows.

        • 0 avatar
          Quentin

          I don’t think that many people see it as a buffer between peak hours (long payback time for a large portion of the country) or a backup generator (unable to refuel after depleted). Tinkerers and spreadsheet gurus likely love the idea of the wall as it, but not the people you need in order to get mass acceptance.

          That is why I think that Tesla needs to help close the loop for cheap energy for the wall to really get mass adoption. Right now they are leaning on the customer to do all of the leg work. By supporting solar, wind power, whatever and making it a complete system, it would be simpler to understand what you have to do to make it work in your situation and the economics become more clear. It exactly needs to be more like an appliance and less like a part of an appliance, to use your words.

          • 0 avatar
            pragmatic

            Why wouldn’t I use a cheaper (heavier) battery than Li-ion for a stationary application?

          • 0 avatar
            Vulpine

            @pragmatic: Are you sure it would be cheaper in the long run? The expected life of the Tesla power pack is 20 years or more; lead-acid batteries have to be replaced roughly every five years. So multiply the cost of the batteries themselves by 4x and you get a price similar to, if not higher than the Tesla li-ion back.

          • 0 avatar
            pragmatic

            Depends how you expect to use it.

            As a power source when the sun goes down Lead-acid properly designed and sized will last ~20 years. There will be more maintenance than the powerwall but lower overall cost. Also Lead-acid is the current power source of choice but other chemistries that are heavier the Musk’s are available that should beat it in costs. Sodium ion; zinc-air; and various flow type batteries. I wish Musk well but his hyperbole in selling technology far exceeds its potential to deliver. Of course throwing enough money at it may allow him to reach market first but that does not mean its the best or lasting solution. This is not like a car or an i-phone, I don’t see people having loyalty to a back-up power source.

          • 0 avatar
            Vulpine

            @Pragmatic: You may have something with the ‘flow-type’ battery, I’ve not seen enough information either way to say it’s a good thing or not. However, lead-acid batteries are not only heavy but can be problematical due to requirements such as not being left to sit on concrete, temperature constraints that could affect the battery casing, allowing the acid to leak, and other factors such as ensuring those batteries don’t go dry–all of which will affect their longevity. Piecemeal their price may be lower than a lithium battery, but I don’t see them as necessarily cheaper over a 20-year period. The technology has been in use already for decades and if they were truly that efficient, nobody would be promoting other ways to store electricity over the long term.

            I don’t, yet, consider Musk’s statements as hyperbole; he has so far managed to achieve each of his goals as he moves upwards with the products, though not necessarily as quickly as he originally states. As has been said more than once, “The devil is in the details” and it’s been the details that have been slowing him down. He’s definitely shown us what is possible, it’s just a matter of fully realizing those goals in a timely manner.

        • 0 avatar
          bball40dtw

          “The economics are pretty good compared to permanent backup generators.”

          I would not replace my backup generator with a Tesla Powerwall. It would cost more to have it and the solar panels set up, and if the power went off, I would have “range anxiety’ with the Powerwall.

          I can run my A/C with my back up natural gas generator. How long can I do that with the Powerwall?

          • 0 avatar
            Vulpine

            “I can run my A/C with my back up natural gas generator. How long can I do that with the Powerwall?”

            I don’t know. How long do you expect the power to be off? Outside of a direct hit by a hurricane or tornado (or earthquake, etc) usually power outages last about 2-4 hours. I calculated that even with my central air, I would get a minimum of 12 hours out of a PowerWall and with the AC turned off, closer to 30 hours without turning another thing off in the house. MORE than enough for my needs.

          • 0 avatar
            bball40dtw

            We’ve had power outages of two days or so. Where my parents live, which is directly between Detroit and Lansing, they get multiple day power outages every year or two.

            The issue with the length of the power outage is compounded by the fact that I’d have to purchase a solar array. And then maintain it in an area that snows and is often cloudy (I’m aware you get some energy when it’s cloudy, but no where close to peak). So I’m basically looking at $15K-$20K all in for a system that is less reliable than a natural gas backup generator.

          • 0 avatar
            Vulpine

            Ok, bball, I’ll grant you conditions in some cases. I’m sure you get some decent lake-effect snows there. On the other hand, glass is a lot slipperier than asphalt shingles so the high pitch of the roof would probably shed the snow more quickly with solar panels installed which will have them operating at the best available rate once that happens.

            Additionally, while I accept that a storm-based outage can extend a day or two, that outage usually starts during the storm and skies clear pretty quickly after it ends. Granted I’m used to Nor’easters where I live, but a storm that dumps a lot of snow usually blows through pretty quickly after its peak which is when the outage is most likely to occur. As such, a solar and battery system can still be effective–if not ideal. Adding a second battery pack in your circumstance may be sufficient for the need.

            Conversely, I have read and heard too many times about gasoline and natural gas generators failing to start during an emergency, especially if it has sat idle for too many months. I know the routine is to manually start and run it every few weeks, but too many people ignore such preventative measures.

            A solar system doesn’t need manual intervention and also doesn’t give off carbon monoxide that can leak into the house if the generator gets smothered under the snow (that includes even if it’s kept in a lean-to against the house. Don’t forget; just last winter a whole family–except for the mother who was out working–were overcome by CO fumes from their emergency generator which was supposedly safe from CO leakage, but which the snow pack had blocked the exhaust.

          • 0 avatar
            bball40dtw

            If I lived in Southern AZ still, I’d have a solar array and a Tesla Powerwall (or something similar).

            Here in Michigan, natural gas is cheap. My electric bill is also really low. Since I have a gas stove, dryer, water, furnace, etc, my electric bill mostly consists of things that don’t use much power. Only the A/C changes the bill. Since I didn’t use the A/C at all last billing cycle, my electric bill was $35. I did the math and I would not be able to recoup the additional costs of the solar array or Powerwall in my lifetime.

            Also, my back up generator does not need manual intervention to turn on or off. I don’t know how the CO would get in my house, as the generator is outside and cannot vent into the house.

          • 0 avatar
            Vulpine

            “Also, my back up generator does not need manual intervention to turn on or off. I don’t know how the CO would get in my house, as the generator is outside and cannot vent into the house.”

            That’s what that family that died thought, too. I’ll grant it will be dependent on the location of the generator itself, but even if it’s outside the house, if the exhaust cannot reach open air, it will leak into the house as the path of least resistance.

            As for not needing manual intervention, I have to ask if it has an automatic start and run function on a scheduled basis outside of being triggered by a power failure. Just like a car engine, it needs to be run regularly at least long enough to get up to operating temperature or it could fail when it is most needed.

            I give you kudos for having so much of your house off the grid, as it were, I’m planning on converting my water heater over to gas (since I already have gas for my central air system and cooking.) That said, as I and my wife work from home through computers, we can’t afford a long-term power outage and despite hurricanes and blizzards both have only experienced a maximum 14-hour power failure in over 20 years. Of course, those near the coast where Sandy hit got it a lot worse, but even then with the exception of areas that were totally destroyed, electricity was back for most of them within days at most while natural gas and liquid fuels were not available for weeks. It all depends on just how remote your home is when it comes to that. Electricity is almost always the first service restored.

          • 0 avatar
            bball40dtw

            I fire up the generator once a month to make sure it works. I’ll be more wary of snow building up around it next year too. Thanks for that.

            I would get more off the grid if I could. However, there are limitations living on 1/3 of an acre, in an inner ring suburb, in a major metropolitan area. Geothermal isn’t worth it. The solar payback time quite long. If I lived farther out, I could see having both. Heck, if I lived way out, and had the money, I’d have a windmill too.

            I’d love to have solar just enough to power the A/C unit, but I don’t know what that would entail.

          • 0 avatar
            Vulpine

            Actually, bball, geothermal could be worth it, if access for a digger is possible. You get the coils about 15 feet down and your cooling for the summer would be a fraction of the cost using a water-based heat exchanger vs the pressurized system most ACs use. Your electric cost for cooling would effectively vanish by comparison. The cost of install would be a one-time expense.

            Still, I can’t argue what you’re already saving. My electric pushes close to $300 running the AC, but that’s only for about 4 to 5 months, the rest of the time near or below $100/month because of the number of computers and displays in operation. Before getting a bigger, more efficient compressor unit my electric pushed $400 even with the assistance of air-mover fans because the ducting in my house allows for stratified regions between basement and second floor, each floor a notably different temperature with the top level almost 15° warmer than the one below before the fans. Now I manage about a 3° differential and can run the main floor at 72° winter and 75° summer without complaint. Gas bill during the winter runs between $65 – $75, more than balancing the summer’s electric bill in my favor.

            That said, I’d love to put solar panels on my roof as by blocking the direct summer sun, my top level and attic wouldn’t get as hot, saving me even more on cooling. HOA won’t allow anything that affects the ‘style’ of the home to be visible from the street, however.

          • 0 avatar
            bball40dtw

            I’ll have to give geothermal a look. I also may give solar another look. The roof on the back of my house faces due south and gets baked by the sun most of the year.

    • 0 avatar
      redmondjp

      I echo the comments above – as cool as the home power idea is, there is nowhere near enough consumer demand at this time.

      Now if we had a third-world power system, where the electricity was off all night, and randomly on during the daytime, then that’s another story.

      • 0 avatar
        bball40dtw

        But they can’t afford it.

        I get the idea, but you have to want more expensive Tesla stuff in your garage or your electric rates are very high. Maybe rich people want to power their pool equipment with solar power and the Tesla Powerwall.

        For me, I would never make my money back. Power is too cheap and I don’t use enough of it. My sister was going to do an analysis of my house for the payback on solar panels, but my electric bills aren’t high enough for her to try and make me feel bad about how I am hurting the environment.

  • avatar
    Pch101

    Tesla refers to it as an SUV, not as a minivan. As it lacks a sliding door, Tesla has a point and I don’t know why you insist on calling it a minivan when it isn’t one.

    If you’re asking whether providing gull wing doors to soccer moms is a risk, then yes, I would say that it is. I’m surprised that those ended up on a production model.

    • 0 avatar
      MLS

      Well, it kind of looks like a minivan. At least more so than it resembles a traditional crossover or SUV. Frankly, the gullwing doors are the only thing the Model X has going for it, design-wise. Tesla somehow managed to produce a vehicle duller looking than the Model S–no small feat.

    • 0 avatar
      eManual

      Gull wing doors are acceptable only in dry desert areas like Southern California, Arizona, Nevada, etc. For the rest of the country where it snows or rains, they make the interior a mess if any wind is present. Style over substance.

      • 0 avatar
        mcs

        I have conventional doors that cut into the roof a bit on all of my cars. So, I still have to clear roof of snow (a $200 fine in my state if you don’t), snow still gets inside some times, and the wind still blows in. The only time I don’t have an issue is when I do an indoor garage to indoor garage commute.

        The only issue I see as a potential is ice. Although, I’ve had those problems with conventional doors too.

        • 0 avatar
          TrailerTrash

          no really true.
          Yes, a bit of snow and wind might come in with conventional doors, but to try to make these equal is more than a stretch. It is a fable.
          Real people in real cities always have snow on their roofs. It is impossible to keep off. And these are not 130K interiors the wet stuff will fall into.
          States have laws preventing slow drivers in fast lanes…NOBODY listens.
          Ice and snow is always on the roof….
          The majority of the country has real winters and bad weather.

          Plus…I still need to see this car pass the safety testing. I know there have always been issues with roll-over and crash door opening on these types of doors.
          I am not sure how the roof will not warp over time.
          There is a rattling/noise issue with these doors.
          There are serious issues with these doors and a reason they are not on most cars…

          • 0 avatar
            mcs

            >> but to try to make these equal is more than a stretch. It is a fable.

            It’s not a fable, it’s reality. It’s happened plenty of times with my cars when I haven’t cleared the roof. On one, the top of the doorway extends over a third of the seat.

            >> It is impossible to keep off. And these are not 130K interiors the wet stuff will fall into.

            Ever heard of a car cover? They have these garage things too that seem to work well. It’s like a little house just for cars. There is this other neat invention too. They take a long stick and attach another stick with little flexible things called bristles. It’s called a snow brush. With a little bit of effort it magically removes the snow from the roof. I kid you not – the most amazing thing you’ve probably ever seen.

            Another thing that you’re missing is the fact that you can preheat a plugged in EV before you go out to it. On several occasions, I just set the thing to easy bake oven mode and it got hot enough to melt away light snow.

            As far as the snow not falling on 130k interiors – where the hell do you get that information? Plenty of 130k+ cars parked on the streets or parked in the open. Not everyone puts away their Mercedes for the winter.

          • 0 avatar
            Vulpine

            @TT: Every one of those arguments is an assumption. You don’t know for sure because you haven’t tried it in rain, snow, wind, etc.

            But, just as you say, Nobody listens. Apparently not even you or you would at least be willing to put it to the test, first.

      • 0 avatar
        Luke42

        @emanual:

        It seems like the the hatchback on my Prius would have most of the same problems. Bit it works fine here in the Midwest, where we get plenty of snow and some ice.

        My Prius doesn’t have that second hinge and, after 11 years of service, that nonexistent 2nd hinge hasn’t broken on my Prius. But, that extra complexity ds you get for $100k more than a Prius.

        The Model X is just about perfect for my needs, and I eight to be able to afford one about this time next year. But, I’d like to delete a lot of the fancy features and cut the price — the stress of having to earn that extra money isn’t ceolry wort it for the invisible choffeur or robotic seats that rearrange themselves. I want a car that my 5 year old son can take to college, and I’d rather open my own door ank keep a few dozen grand in my pocket for a rainy day, thanks.

        • 0 avatar
          eManual

          Luke42 – I also live in the Midwest. Note how much bigger the Model X opening is than a hatch. Plus, as Trailer Trash points out, your Prius isn’t a 120K car. If you open your hatch every day and “never” open the rear doors, then the Model X would be equivalent as far as ice and snow.

          I like your thinking on keeping a car for a long time. My newest car is a 2000 Impala with 186K miles, with others being a 1992, 94, and 95 for 3 total drivers. Insurance and tags cost about $200/year for each one.

          • 0 avatar
            Vulpine

            I tend to keep cars a long time too, eManual. My newest car is a ’14 Fiat 500, followed by an ’08 Jeep Wrangler Unlimited, followed by a ’97 Ford Ranger 2wd. The Jeep has the highest miles, approaching 70K since new, followed by the Ranger, approaching 22K (original miles) followed by the Fiat at just over 11K. The Ranger is a garage find where it sat mostly un-used for 11 years and had just under 20K on the clock when I picked it up.

            My previous cars were an ’02 Saturn Vue (130K+) and a ’96 Chevy Camaro (165K+). I do hang onto my cars and to tell you the honest truth, I would willingly trade almost any of my current vehicles for a Tesla X (though I’m waiting honestly for the Tesla 3).

    • 0 avatar
      krhodes1

      The European term of “People Mover” seems to be a perfect fit here. It’s not a traditional minivan, but it sure is not an SUV either. I guess CUV kinda works too, but to my mind that invokes images of butched up styling like an SUV, just on a car platform. Nothing remotely butch about this. It fits into the same no man’s land as the Kia Rondo. Not a CUV, not a Minivan, not a wagon, not really a hatch, just a thing to move people around.

      While I have no doubt they will sell every one they make, I think it takes the pointless prize away from the BMW X6. With added bonus dumb points for the back doors. And it is even MORE expensive and “look at me” than the BMW.

  • avatar
    redliner

    Your looking at this all wrong. Tesla is a battery supplier and energy solutions company that also happens to sell cars to supplement is income. No, it has not turned a profit yet, but then, no one expected them to last this long or release such decent products 10 years ago.

    Tesla wants to be a world class, high volume supplier, and building the infrastructure to do that doesn’t happen overnight.

    • 0 avatar
      Pch101

      “Tesla is a battery supplier and energy solutions company that also happens to sell cars to supplement is income”

      As the cars lose money, no income is being supplemented.

      • 0 avatar
        hgrunt

        Immediate profitability isn’t Musk’s MO either, hence the “profitability in 2020” thing.

        Their brilliant move is using selling the Zero Emissions Vehicle credits and using that money to fund the R&D.

        More accurately, I’d say they are a battery supplier and energy solution company, that happens to make cars, partly to convert ZEV credits into making batteries and energy solutions

      • 0 avatar
        Vulpine

        Since the cars themselves do NOT lose money, income is being supplemented. Just because they’re spending more for expansion than the cars bring in does not mean the cars themselves are losing money; each one makes about 23% gross margin before expenses.

        • 0 avatar
          RideHeight

          *RH flees incoming missile*

        • 0 avatar
          Pch101

          If I had a son who I deliberately dropped on his head, I’d name him Vulpine.

          • 0 avatar
            Vulpine

            And the fox has done his job again; causing another case of headsplodey because logic overwhelms emotion.

          • 0 avatar
            Pch101

            What kind of idiot would confuse profit with gross margin? A Vulpine idiot, apparently.

          • 0 avatar
            Vulpine

            Simply put, PCH, the car makes more money than it costs to build. If that’s not profit, what is? The fact that the company is SPENDING more than it makes in order to grow does not mean the car itself is not profitable.

          • 0 avatar
            Pch101

            Explaining these things to you is a waste of time.

            Gross margin is not profit, and Tesla’s gross margins are not comparable to the rest of the auto industry. Only gullible people who can’t read a financial statement — people like you — get suckered by this.

          • 0 avatar
            Vulpine

            “Gross margin is not profit, and Tesla’s gross margins are not comparable to the rest of the auto industry.”

            Ok, tell me where their gross margins should be, and why.

            Before you do, remember all our conversations about pickup trucks? Remember how it was made rather clear that pickup truck margins are a MINIMUM of 50% for almost all models and that those pickup trucks carry the rest of their products? Clearly, those pickup trucks make enough ‘profit’ per unit to keep the company building its other cars that only make about 5% by comparison, which isn’t enough to continue the R&D on those cars. Worse, when you have a single model like the Volt practically bankrupt your company through its wasteful spending (I followed that car’s design process pretty closely) along with some of their other failures that could have been roaring successes had they only been designed differently and you can see why they needed that massive bailout.

            Now, I’ll grant that Tesla is spending more than it’s bringing in. At least a portion of that is in capital investments–construction of new manufacturing capacity, adding charging infrastructure and other physical growth factors. Another portion is going into the design of a minimum of three different vehicles simultaneously–which includes redesign and upgrades for the Model S, fine-tuning and validating the designs of the Model X as well as actively working on at least one new car (the Model ≡ ) and possibly even the Model Y, rumored to be a pickup truck. So their plans for growth must continue despite the fact that it’s costing more than if they had a fully-realized product line already.

            Your problem is that you’re associating well-considered thought for stupidity and ignorance simply because my thought processes are different from yours. I consider logic over emotion, though I don’t deny the occasional emotional response when somebody makes blatantly illogical commentary. What you’re relating as negatives for the company I see as positives, seeing a company headed towards not only building electric cars but the entire infrastructure around those electric cars–an ecosystem as it were that can make their future products better than any of their competition not only through their own merits but through those of the company supporting the product through customer service and more focused design across the board.

            Tesla will be better because it’s being built from the ground up to BE better.

  • avatar
    Speed3

    It may look like an egg (all cars do these days though), but brownie points for bringing the gullwing doors into production.

    I also wonder, in addition to the delays, the gullwing doors added to the cost. I guess Tesla figured that being electric wasn’t enough, as we know an electric Audi crossover is around the corner. But gullwings? That’s a feature that wont be making it to most other crossovers anytime soon.

    As for going bankrupt, the brand value and technology is there, worst case scenario is that Tesla goes bankrupt and another automaker acquires it.

  • avatar
    ccd1

    There is also the 800 pound gorilla in the room: Apple. We don’t know much about their car, but it will probably be innovative and a premium product. That could really cut into Tesla’s appeal and market

  • avatar

    There is a single massive difference between the Model S and just about everything else that it competes with.

    THE PRICE TAG.

    Talk about LUXURY under $50,000 – which is about the breaking point of main street.

    The HYUNDAI GENESIS offers far more luxury and interior space than the 300, Charger, Impala, Model S and a dozen other cars because it’s built BIG and without a compromising engine. V6 and AWD come in at less than $40,000 before tax.

    There are a whole SLEW of CUV’s offering more than the Model X at less than half the price. The GLE-AMG, X6M, Jeep HELLCAT, Porsche Cayenne and a bunch of others make the list.

    Everyone wants this because of the viral advertising and the exciting videos of Ludicrous mode – which I agree, simply can’t be beaten – even at the $140,000 price point.

    Everyone who I know who “talks” about buying a Model S is currently in a Prius or Volt (including the salesman who I drove the P85D with) and has NO HOPE of affording a $70,000 car.

    Originally, I was sold on the 45KWh model because it was less than $60,000 – which is where the base Model S needs to be. But they quickly cancelled it and sent the price into the high $70k’s with just Nav and Moonroof.

    The P85/P85D/ P90D are all S-class territory and you’d be an absolute FOOL to buy a Model S over a W222 – unless you happened to live somewhere gasoline was horribly overpriced – or difficult to attain.

    When Hurricane Sandy hit NYC – I could have used a Model S. I didn’t lose electricity, but the gas shortages made driving untenable.

    THE MODEL S and MODEL X are so expensive that they might as well be a high-end German car.

    I am impressed with what Tesla is turning out. BIG spacious Family cars that have 300 miles range and do 0-60 faster than Lamborghini Reventons without using gasoline.

    That’s pretty damned impressive.

    -But the costs are too high.
    -The charge times require plenty of forethought and
    -You sacrifice the practicality of being able to fuel anywhere at anytime.

    I keep saying the same thing.

    EV will not flourish until the government stops subsidizing the cars themselves – and instead, gives tax breaks to the businesses such as malls, offices, movie theaters, etc – anywhere people normally get out of their cars and leave them for long periods of time (1 Hour or more). They can install 240v superchargers and give people more charge options.

    Every charger could have a GPS tag so that Google maps, apple maps, Tesla maps, etc would be able to point people in the right direction when they need a charge.

    More chargers = less wait time and more options.

    Economics 101: if you subsidize something, you get more of it.

    This would effectively INCREASE mileage without much compromise.

    When I test the P90D and Model X and make my own videos I will repeat that FACT and spread my message to the heights of the Presidency itself.

    President Trump will HIRE me for Energy secretary or head of the NHTSB and then the REAL RECOVERY will begin.

    • 0 avatar
      VoGo

      “I keep saying the same thing.”

      At last we agree on something.

    • 0 avatar
      mcs

      “Every charger could have a GPS tag so that Google maps, apple maps, Tesla maps, etc would be able to point people in the right direction when they need a charge.”

      We’ve got that. Even reliability ratings and notes. If I’m cruising along and think I might want to boost up my charge a bit, I can go into the nav system and search for nearest charging stations. We have so many in my region I actually have to apply filters. Once you decide on a station, you add it as a waypoint. Only did that twice in 20k mile though.

      >> The P85/P85D/ P90D are all S-class territory and you’d be an absolute FOOL to buy a Model S over a W222 – unless you happened to live somewhere gasoline was horribly overpriced – or difficult to attain.

      For some of us it’s a powertrain choice. Just like you prefer V-8s, some of us just like the driving experience. I suspect that’s really what’s behind about 90+% of EV sales.

      • 0 avatar

        Forget the V8. S-class isn’t about going fast.

        S-class is about driving around in a lavish hotel room/nightclub where men who are 6’7 can stretch out.

        We have leased W222’s. I would be satisfied in a W222 with a V6. It’s all about the comfort.

        The Genesis is the closest you can get to an S-class without paying over $40,000.

        • 0 avatar
          KixStart

          And yet, in spite of the massive price difference, the Tesla sells NEARLY as well as the Hyundai.

          Maybe there are other factors at work? The Genesis is just another Benz-wannabe. The Tesla is completely different. Perhaps people are willing to pay for that. Maybe smart business is developing new things people are willing to pay big money to get?

    • 0 avatar
      Master Baiter

      Thanks, Captain Obvious.

    • 0 avatar

      I thought YOU were Donald Trump.

      Anyway, interesting point about chargers in malls v. subsidies for buying the EVs.

    • 0 avatar
      VenomV12

      I was at Best Buy yesterday and this guy had a brand new gorgeous black Jeep SRT with black wheels. There is no goddamn way I would buy the stupid Model X over that vehicle, especially for double the money. I am truly baffled how Tesla finds people stupid enough to buy their cars for the kind of money they charge.

    • 0 avatar
      alexrcp

      I was with you until the last sentence.

    • 0 avatar
      hgrunt

      You know, when the automobile was invented, people like you said “Horses are better because you can feed them and not have to think about where to get gasoline. You’d have to put a gas station at every corner!”

    • 0 avatar
      krhodes1

      Ultimately, either Telsa makes a lot of sense over an S-class if you commute somewhere that one will give you access to HOV lanes and preferred parking (or other Gov. handouts ala Norway). Or if you simply want the geeky “green cred” with your equally geeky peers.

    • 0 avatar
      shaker

      “EV will not flourish until the government stops subsidizing the cars themselves – and instead, gives tax breaks to the businesses such as malls, offices, movie theaters, etc – anywhere people normally get out of their cars and leave them for long periods of time (1 Hour or more). They can install 240v superchargers and give people more charge options.

      Every charger could have a GPS tag so that Google maps, apple maps, Tesla maps, etc would be able to point people in the right direction when they need a charge.

      More chargers = less wait time and more options. ”

      No, no NO.

      Public chargers should exist for EMERGENCY CHARGING ONLY, and should be “subsidized” by premium pricing that would cover their cost – pricing that would be willingly paid by a user who runs their battery low due to circumstances.

      The EV’s SHOULD be subsidized (so that the manufacturers can roll that money into longer range battery development) and HOME CHARGING STATIONS should be subsidized as well, BOTH so that the cars used for commuting will have sufficient charge for the trip home.

      Public chargers make no sense, as the supply will never match demand, whereas home chargers are a very close match.

      “Cheap” public charging will actually encourage competition between EV drivers, and along with sometimes being “ICE’d” would lead to unnecessary conflict and confrontation. And I imagine that the anti-EV crowd would welcome such confrontations, and point to them as a reason that EV’s are “bad”.

      We have to be smart about adopting EV’s, and their integration into the practical realm of commuting.

      • 0 avatar
        heavy handle

        I agree. For some reason, there’s a certain brand of conservative who thinks any problem can be solved with a new tax and/or tax incentive (except for those problems that are solved by sending-out the 82nd Airborne, of course).

        You know who should subsidize chargers? Utilities and car manufacturers. They are the ones with the most to gain.

        Medium-to-long term, charging is a non-issue. Everyone has electricity at home, and no one runs their car 24/7. The only thing that makes charging an issue is the fact that many “first try” electric cars have lousy range.

        • 0 avatar
          highdesertcat

          I’m no conservative, seeing the merits of both sides of a political debate.

          But I think the market place should decide what lives and what dies, without subsidies of any kind.

          Clearly EVs and their ilk work for some, but not for all.

  • avatar
    RideHeight

    This car is silly.

    May we please have more VW articles?

  • avatar
    stingray65

    Gullwing doors are stupid on a utility oriented vehicle. They were justified on the MB 300SL only because of spaceframe clearance problems, and even that sports car was quickly designed to get rid of them because most potential buyers didn’t like them. I cannot imagine this new model being popular beyond the “be the first on the block to own one” types who will likely be trading in the model S to get one. I have always thought that Musk is trying for another PayPal payday with Tesla in having someone pay him big money for the company, but given its lack of profits I just don’t see it happening. Unless oil prices rise dramatically and/or the global economy significantly picks up steam, I don’t see how Tesla can ever generate enough income from selling very high priced niche cars to finance next generation products and survive.

  • avatar
    dwford

    The thing that Tesla figured out that the other automakers haven’t is that electric cars need to be desirable, and need to start out as premium products that early adopters will love. Ever other automaker has focused on making cheap looking enconocar electric cars that no one wants. Honestly, who WANTS a Nissan Leaf? Who WANTED a Coda, or Focus Electric, etc? They are giving those cars away, losing their shirts in the process. Tesla made an excellent product, and charged a premium for it, and it is working. Now, when the Model 3 comes out, people who were priced out of the Model S and X will come screaming into Tesla showrooms for the $35k car.

    • 0 avatar
      Pch101

      Other automakers have avoided making EVs like that because they are guaranteed to lose money.

    • 0 avatar
      jkross22

      Seems like other car makers are looking at EV’s as a way to stay in the huge, lucrative California market to meet emissions standards, not to lead with profits.

      “Tesla made an excellent product, and charged a premium for it, and it is working.”

      Well, they’re selling the product at a loss. I wouldn’t necessarily call that ‘working’.

    • 0 avatar
      JD23

      Do you really believe that the Model 3 will be sold for close to $35k? A few years ago, Musk claimed that the Model X would be in the $50k range and look at how that turned out.

  • avatar
    El duce

    Off topic but what happens in a roll over accident? How do the rear doors open?

    • 0 avatar
      jmo

      I assume with explosive bolts like the SLR?

    • 0 avatar
      CJinSD

      That’s not a problem, because Teslas disintegrate in major accidents.

      http://www.theverge.com/2014/7/10/5888463/car-thief-becomes-first-tesla-model-s-fatality

      http://www.dailynews.com/general-news/20150623/man-who-died-in-fiery-malibu-canyon-crash-of-tesla-is-53-year-old-from-calabasas

      • 0 avatar
        krhodes1

        I’m no Tesla fan, but even I agree that they are one of the safest cars on the road. If you manage to die in a Tesla, you probably would have died no matter what you were in.

        Get a grip.

  • avatar
    vvk

    I think in the market segment the higher the price, the more people are interested. It is a luxury product like a designer bag. That just happens to be the best in the world by every measure.

    • 0 avatar
      krhodes1

      Best in the world by every measure (yeah, right) except getting where you need to go in a reasonable amount of time if you don’t live in a major urban area or along certain interstate corridors.

      You can’t drive a Tesla across my state and back, there are no charging stations once you get very far from Portland. There is a WHOLE LOT of Maine beyond Portland. And even what chargers there are either for guest use only, or Level 1&2.

      • 0 avatar
        mcs

        >> there are no charging stations once you get very far from Portland. There is a WHOLE LOT of Maine beyond Portland. And even what chargers there are either for guest use only, or Level 1&2.

        There are Level 3 CHAdeMO chargers in Auburn, Topsham, and Bangor available to anyone – so that’s not really true.

  • avatar
    velvet fog

    If they go under at least we’ll be rid of Elon. He’s becoming as insufferable as The Donald.

  • avatar
    Dan

    The Tesla Egg: If it didn’t have gull wing doors then how would your social lessers recognize their inferiority in a crowded parking lot? Aerodynamics for reasonable range won’t let them achieve six figure presence via dimensions like a Range Rover.

    Tesla going under: We can hope. But the government is as full of environmental fanatics as ever, the universities are indoctrinating more of them every year, and the con man Musk is getting even better at this lobbying thing with each successive Congress.

  • avatar
    TrailerTrash

    5400 plus pounds??????
    How big is this thing?

  • avatar
    70Cougar

    Yes, Tesla can still fail. It is a high risk, high potential reward endeavor. Lots of new companies lose money for a long time. We are not used to seeing new car companies because it is a capital intensive business with massive barriers to entry. What Tesla has done so far is impressive. Management will have to continue to execute at a high level for a long time.

    • 0 avatar
      krhodes1

      Not seeing the high potential reward. Automaking is a high investment low margin industry even at the highest of the high end. It is second only to the airline industry as a way to make a large fortune into a small one.

  • avatar

    Kind of gimmicky the gull-wing doors. Sliding doors would have made more sense if tight parking spaces were the reason. Or just one gull-wing door on the driver’s side. Tesla got an unexpected boost because of the VW thing. But it’s not in the clear. Low oil prices, governments reassessing their fiscal treatment of EVs, especially expensive ones (Netherlands already did), but also the lack of an overall strategy are Tesla’s weak points. Because, let’s face it, Tesla has turned into a regular car maker.

    • 0 avatar
      jkross22

      If by regular car maker, you’re referring to a reliance on subsidies to stay afloat, yep, they’re regular.

    • 0 avatar
      28-Cars-Later

      I see the gull wing doors are brilliant but impractical. I could conceivably see the doors opening in a conventional parking space and banging against another car, but they are open people’s attention will be drawn to them and say/think “that’s a Tesla” which I think was the designer’s point.

      • 0 avatar
        bball40dtw

        They have double hinges. They won’t bang into other cars. Tesla had a demo of them opening in a parking spot where it would be impossible for humans to get into the Model X.

  • avatar
    derekson

    I still think the biggest hurdle Tesla will need to clear is when the German luxury brands start making actual luxury EV competitors. Mercedes/BMW/Audi/Porsche can develop new models and facelifts and new features a lot faster than Tesla can. Is the Model S still going to be on the market with minimal changes when Porsche gets to making a production version of the car they teased at Frankfurt? If so, they could be in trouble.

  • avatar

    collision repairs likely a nightmare and those doors could be a long term reliability issue.

    • 0 avatar
      Russycle

      Hmm, expensive to repair and maybe unreliable. Is there a 6-figure car that doesn’t match that description?

      • 0 avatar
        Luke42

        Yeah, that’s why I’m leery of 6-figure cars.

        I’m a vehicle *owner*, and I’ve mostly owned higher mileage used cars. Now that I’m in a demographic that can afford luxury cars (and is sometimes expected no have one), I see a lot of red flags about what kind of used cars those expensive vehicles are going to turn in to. It’s not encouraging. I’ll pay extra for an heirloom quality vehicle, but that doesn’t seem to be what you get.

        I haven’t always been in this demographic, and I believe my manners do more for my sense of class than any possession ever could. So, I look in the mirror and ask myself: do you want to pay extra to have a vehicle that will be an expensive basketcase in 10 years? Do you feel lucky? Do you? The answer almost is almost always an emphatic “no”.

        The “no” comes from the fact that the aging used cars in my driveway provide all of the utility I need, at a small (and predictable) fraction of the cost of a luxury vehicle. The only problem with them is that I have to keep putting gasoline in them, which is both chemically and geopolitically volitile. And then the cycle of considering Tesla begins again…

  • avatar
    Conslaw

    If Tesla were in danger of collapsing, that’s when Apple would swoop in and buy the company to get the entry into the car biz that the financial press has been talking about. Tesla’s market cap was higher than Fiat Chrysler’s last time I checked, so they could raise a substantial amount of money by issuing warrants to current shareholders. The gull-wing doors can be set to stop before reaching the top of their travel. The wing doors are the rear doors to the 4 door car, so they don’t prevent the driver from entering the car on snowy days, and even back-seat passengers could inelegantly crawl through from the front.

    • 0 avatar
      Luke42

      I’ve never had much trouble opening hatchbacks in the snow.

      The sliding doors on my minivan can be locked by ice, and sometimes I have to get in there and shoulder-check it from the inside to get them open. It’s annoying, but a small price to pay for the access provided by such a big door.

      I think the gull with doors on the X will be fine in the snow, just so long an you don’t open both sides at the same time.

  • avatar
    carve

    I’m a Tesla fan, but I don’t get the X. It’s a chubby S. It doesn’t really do anything the S doesn’t do better for less money, with the exception of a roomier 3rd row. It is also too expensive, so will primarily eat into Model S market share.

    • 0 avatar
      hgrunt

      SUVs are pretty popular, I’m sure they’ll sell every unit they make.

      From what I can tell, many of the easy-access features were designed with pregnant women in mind. They’re sort of angling it as a minivan replacement.

    • 0 avatar
      Luke42

      I have kids. Sedans are suboptimal for kid-hauling, especially at a $35k price point – nevermind $70k-$135k.

  • avatar
    philadlj

    The entry-level Model 3 will be the true test. I wonder where development is on that?

  • avatar
    fishiftstick

    How many times did Henry Ford go broke?

    Since Tesla is not making money yet, it relies on markets to infuse capital. If for any reason that dries up, Tesla could easily go bankrupt due to lack of cash flow.

    But so what?

    If Tesla went belly-up tomorrow, someone would buy their assets, and the Model S at a minimum would remain in production. It’s a great product. Hell, if the development costs go bye-bye, it’s easily a profitable one.

  • avatar
    SoCalMikester

    once the next bust comes, all overvalued companies are going to be in trouble

  • avatar
    SCE to AUX

    Hey Doug, you got a couple things factually incorrect, and therefore undermines your argument a bit:

    1. The X doesn’t start at $130k. The X will start at $80k, but the first ones out the door are the top-of-the-line version. Must has said it will be priced about $5k above a similarly-equipped S.

    2. Falcon doors: they are equipped with sensors to detect an obstructing ceiling, so they won’t strike it. Obviously, you can’t park this vehicle inside a tight garage like yours or mine, but at least the car won’t damage itself.

    Nobody at Tesla said the X or the S are to be the car for the masses. I don’t know why that straw man comment is made so often. A Mercedes G-Wagen is just as expensive, yet it receives no criticism whatsoever.

    The Model 3 and the Gigafactory are key. If the Gigafactory can bring the battery costs down, Tesla will survive, and won’t be able to build enough 3s to meet demand. If not, they go under.

    • 0 avatar
      bwell

      “A Mercedes G-Wagen is just as expensive, yet it receives no criticism whatsoever.”

      A G-Wagen buyer doesn’t get a $7500 subsidy from the government.

      • 0 avatar
        krhodes1

        Nor can it be run in HOV lanes and use preferred parking just because “ooooh, electric”. Nor does Mercedes get to sell off energy credits to subsidize operations. Nor do some countries give so many freebies to it that it is stupid to buy anything else.

        I would like Tesla a LOT more if they actually operated on the same playing field as everyone else. Or if they were at least getting all the government handouts to field a Corolla/Camry competitor and not an E/S-class competitor.

      • 0 avatar
        SCE to AUX

        That has nothing to do with the car.

        Critics pick on the car, when their real problem is with the GOVERNMENT’s subsidy policy, or Mr Musk’s alleged personality flaws.

        You know, Tesla didn’t invent the subsidy, and Nissan buyers have benefited from it far more than Tesla buyers.

    • 0 avatar
      derekson

      The X absolutely starts at $130k. Musk even showed a slide showing “Base Model: $130,000” in the reveal.

      At some point later they may release an $80,000 version but that version does not exist at this time.

      • 0 avatar
        Vulpine

        “The X absolutely starts at $130k. Musk even showed a slide showing “Base Model: $130,000″ in the reveal.”

        And you have a photo of it, right? I repeat: The base model X70 will start at roughly $80K while the SIGNATURE X90D Model starts at $130K.

  • avatar
    carlisimo

    People inside the company tell me that their greatest challenge is bringing manufacturing costs down. They’re still not very automated – NUMMI’s parking lot is massively overflowing (big inconvenience for everyone who works there) despite the low output because there’s too much done by hand.

    Some of it is cultural. They make small updates as if this were a phone app, every few days. There wasn’t as much thought put into efficiency. That’s changed, and they’re slowly figuring out how efficient manufacturing works. They need to get that down before the Model 3 enters production.

  • avatar
    George B

    “Could Tesla Still Go Under?” Yes. Better question: Under what realistic scenario does Tesla ever generate the profits needed to fund development of replacement models?

    • 0 avatar
      mcs

      >> Under what realistic scenario does Tesla ever generate the profits needed to fund development of replacement models?

      Replacement models won’t be nearly as expensive as the initial products. Moving forward they can continue making incremental changes like more efficient motors and better batteries. Of course, improvements in the interior would help as well. Then maybe a refresh on the exterior. Further down the line maybe more carbon fiber as that technology improves. Maybe adding a two speed transmission at some point.

      Also remember, EV developers don’t have to worry about emissions testing and complex new engine technology. It won’t be as expensive as an ICE vehicle.

    • 0 avatar
      SCE to AUX

      Gigafactory.

      If it doesn’t reduce battery costs sufficiently, Tesla either raises prices or they go out of business.

      If it does reduce battery prices sufficiently, Tesla prints money.

      • 0 avatar
        mcs

        A company in Cambridge MA has invented a new quicker process of manufacturing lithium-ion batteries. They’ve eliminated a lot of the steps. Pilot production now, with limited samples available 2016 and full mass production in 2020. The company is 24-M. So, even if the gigafactory fails, there are other cost reduction technologies in the works.

  • avatar
    jacob_coulter

    I could easily see this car being the final straw that breaks the company. $150k for this giant hatchback is going to go over like a lead balloon everywhere outside of a few enclaves. It might not go bankrupt, but I expect the stock to take a nosedive over the coming 12 months.

    But I will say this in defense of it, the gullwing door were smart, there needs to be some exotic touches to make this product stand out for the pricetag.

    This car won’t fail because of that feature, and my guess is it will be the first thing new owners show friends and family.

  • avatar

    This is an excellent article. It was well balanced and lacking in the usual fan boi rah rah or completely negative aspects of other pieces written on Tesla. I hope they succeed. But there are way to many who are blind to the challenges they face. This piece points out that the Model S lacks the cachet it had when it was first introduced. There are other cool looking EV products coming to market from other OEMs. Fuel prices need to be around $5./gallon for the general population to give strong consideration to an EV. Product development has to continue and that’s REALLY expensive. And the build to order model only takes you so far.

    Bottom Line: Tesla will need dealers in some form to succeed.

    • 0 avatar
      SCE to AUX

      Well, that was predictable.

      Tesla is now the EV sales leader in the US, with gas at $2.23 in my area.

      The only other cool-looking EVs coming soon are from Audi and maybe Porsche, and the Porsche will make the Tesla look cheap. Tesla currently outsells the luxury marques in the same class, so I have no concern that the X and S will stay ahead of the others for some time to come.

      Tesla doesn’t need to win over everybody; they just need to win over enough.

    • 0 avatar
      mcs

      >> This is an excellent article.

      With factual errors like missing the base price by $50k. Right…

      • 0 avatar
        derekson

        The base price was accurate. The 90D is the base model at this time, and costs $130,000. There is no $80k Model X, and there won’t be as long as they can keep selling all the $130k and $143k models they’re building.

        • 0 avatar
          Vulpine

          If you say so. Just because they CLEARLY stated they were starting with the Signature series first proves you wrong, though. The Sig Series is not the base model no matter how you look at it.

  • avatar
    Vulpine

    Too many mistakes in that article, as well as some plain old misinformation. Nearly every negative point the author makes was refuted by Musk himself at the release of the Model X–including the one about being able to open the falcon-wing doors in a garage. About the only factual statement is the one about ‘no roof rack’, which to be quite honest, you’re not going to see on an $80K+ vehicle.

    That’s right, I said $80K+, not $130K+. These first few hundred are the Signature series models which are the top-of-the-line pricing while the standard editions are supposed to run between $5K-$10K above an equivalent Model S–which starts at $70K.

    So by no means was this a “well balanced article”.

    • 0 avatar
      SCE to AUX

      Thank you. I had the same complaints earlier ^^^.

      Facts don’t matter to the detractors, who also like to mix in their disdain for govt subsidies and Musk as though that had anything to do with the car.

      Oh, and I heard Teslas catch on fire, too. I saw it on the internets.

      Another straw man: It can’t go 500 miles on a charge while towing 5000 lbs at 100 mph.

    • 0 avatar
      28-Cars-Later

      “These first few hundred are the Signature series models”

      I had *better* be able to get a carriage roof on my Signature Series Model S.

    • 0 avatar
      VenomV12

      No roof rack on an $80K+ vehicle eh? I should tell that to my neighbor who drives year round with a Thule box on the top of the roof of her GL550 or the other lady down the road who does the same with her full size Range Rover. The main negative point that no “journalist” seems to being up which I have several times, you would think they would use the free gimme, is that the second row seats don’t fold down. What kind of ludicrous utility vehicle can’t fold the second row seats down? For some reason these same clowns won’t ask what the range of this vehicle is when it is towing a heavy load or how you will be able to get into a spot at a supercharger and charge it with a trailer attached?

      • 0 avatar
        Vulpine

        “No roof rack on an $80K+ vehicle eh? I should tell that to my neighbor who drives year round with a Thule box on the top of the roof of her GL550 or the other lady down the road who does the same with her full size Range Rover.
        —————————————————————

        Ok, they have the carriers. What’s in them? How often are they used? How many OTHER SUV/CUVs are carrying them? How many have ANYTHING on their roof racks?

        The only legitimate argument you have here is how do you use the Supercharger when you’ve got a trailer attached.

  • avatar
    RideHeight

    When I see Teslas running over our frost-heaved roads as frequently as I currently see.. oh, Escalades; when I scrape the interior frost off my windshield (again) on a 20-below January day and say “Wow, another Tesla” and it’s not stationary on the shoulder, then I’ll take them seriously.

    Some regions will always be a tough sell for any EVs and I’ll be in such a place till I die because anything warmer is crotch.

    • 0 avatar
      SkiD666

      Um, live in northern Canada and have driven a P85D daily since I got it in January. No problems with snow and cold.

      Heavy AWD with snow tires and low center of gravity and height adjustable suspension = great winter car. Electric heat works better than waiting for an ICE to warm up, mobile app lets me warm up car before I leave for work with garage door closed.

      • 0 avatar
        RideHeight

        Um, tall ICE for 1/3rd the price of a Tesla = great winter car + years of gas and snow tires + geriatric accessibility.

        Plus, if Teslas were to really catch on yours becomes common.

  • avatar
    HotPotato

    Here are a couple o’ fun facts about government subsidies.

    * Your government’s tax policy subsidizes oil and gas companies, even though they’re in the most profitable business on Earth (ask ExxonMobil).

    * The inflated military budget of the USA (equal to that of China, Russia, Saudi Arabia, France, United Kingdom, India and Germany combined) and associated foreign policy, are dedicated largely to ensuring the plentiful supply of oil and gas.

    Whether it’s propping up a Saudi monarchy indistinguishable from ISIS, guarding Oxy’s Columbian oil pipeline, sacrificing American soldiers and Iraqi civilians to regime change, or just refusing to rescind GW Bush-era handouts to the “ohl bidness”, the costs are socialized onto you the taxpayer, and the profits are privatized to Royal Dutch Shell, ExxonMobil, etc.

    Subsidies to Tesla could increase beyond imagination and still be a tiny speck compared to the direct and indirect subsidies to oil and gas. And subsidies to BEV efforts actually prevent death and injury due to war and pollution, whereas direct and indirect subsidies to the fossil fuel industry do the opposite.

    Maybe those who oppose subsidies should take aim at the big ones that kill people, not the small ones that can save lives.

    • 0 avatar
      RideHeight

      “And subsidies to BEV efforts actually prevent death and injury due to war and pollution”

      Use only as directed. Do not mix recipients of subsidies. If death or injury persist consult your local Democratic party headquarters. Under no circumstances speak to the media prior to consultation.

      • 0 avatar
        VoGo

        OK, RideHeight,
        How do you explain all the wars in the Middle East that the Bushes (great friends to the Saudi ruling families) pursued? Defense of democracy? WMDs? A deep caring for the Buddhist artifacts the Taliban were destroying? Get real.

        It all boils down to addiction to oil. Once we get off that addiction, we won’t need to spend all this money and waste the lives of so many of our soldiers guaranteeing its flow.

        • 0 avatar
          RideHeight

          I hate the Bush wars. They were/are obscenely expensive in every way.

          I’d be all for going back in time and getting Harry Truman wrapped up in a poker-thon over the weekend Israel declared statehood. Nobody else in his government would have pushed to support them.

          We could have had 60 years of business-as-usual access to Middle Eastern oil but for our support of Israel. This was a point made most vigorously to Truman by George C. Marshall and many others at the time.

  • avatar

    RE: “Simply put, PCH, the car makes more money than it costs to build. If that’s not profit, what is? The fact that the company is SPENDING more than it makes in order to grow does not mean the car itself is not profitable.”

    It costs less to build than it makes ONLY if you don’t add in all of its costs. There is a difference between margin (gross profit) and net.

    When a car is sold in a dealerships and makes $2K gross profit, it loses money after subtracting the overhead and selling costs. Tesla needs a lot more margin than it currently makes to be viable. That’s why they need economies of scale that will be difficult for them to achieve before their competitors do.

    • 0 avatar
      Vulpine

      “It costs less to build than it makes ONLY if you don’t add in all of its costs. There is a difference between margin (gross profit) and net.”

      I agree, Ruggles, which is why I clearly stated “gross profit” and not “net profit”. Nobody has demonstrated to me that the cost of selling the car overbalances the money the car itself makes. The vast majority of Tesla’s so-called ‘losses’ are due to their capital investments and not vehicular costs.

      • 0 avatar

        The so called “losses” are real losses because Tesla doesn’t make enough margin to pay those additional costs, which aren’t fictitious. If they ever do, than they will actually be profitable, and not a minute before.

        • 0 avatar
          Vulpine

          As I said before, Ruggles, show me the numbers. Show me that when you take all new construction and R&D costs out of the picture, the Tesla cars are NOT making a profit. Just repeating a statement is not giving me evidence. I find it difficult to believe that each and every car is costing $15K-$25K above its sale price to deliver and maintain.

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • tankinbeans: To be clear, I’m not generally trying to activate it at low speeds, but I get the idiot light....
  • tankinbeans: I came along just as this car was starting to shuffle off into hell or wherever it was to ultimately end...
  • Lou_BC: LOL. That’s why I prefer motorcycles.
  • Lou_BC: @el scotto – well said. Germany clued in post WW2 that any Nazi symbolism was bad and rendered illegal....
  • JimC31: Good grief, the hysteria from the automotive luddites here is embarrassing. Every single airliner in use...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber