Tesla Motors sails into well-charted and dangerous waters
Fans of high performance sports cars and green transportation are both anxiously awaiting the production launch of the Tesla Roadster. The Roadster is perhaps the most anticipated new car of recent times, but not everyone is enthusiastic. It's not the car or the Tesla's intentions that are the problem. The issue lies in Tesla's chances of long-term survival. The history of the automobile is littered with vastly more defunct automakers (and not all them startups) than successful ones. Just think of Tucker, Vector, Hudson, REO, and Edsel.
Don't get me wrong, I do hope that Tesla makes it and thrives, because any time someone new can enter a market and shake it up with something better, that's a good thing. The existence of cars like the Chevy Volt are probably at least in part due to the excitement created by the Roadster. However, the odds are very much against them and Martin Eberhard and his team are aware of that and they've tried to be ready.
They have by all accounts done a lot testing and encountered and fixed some problems. But in spite of all the preparation, the battery pack is still a very big question mark. And Lotus has an outstanding reputation for engineering excellence, matched by their dubious record for build quality. Tesla has a plan that may well lead them to success but potholes like the ones in Michigan can also tear up a suspension. Tesla is the most likely of the current crop of EV startups to survive infancy, but we'll just have to wait and see.
[Source: sfist]
Reader Comments (Page 1 of 1)
Kardax 11:59AM (9/05/2007)
The battery system isn't much of a worry for me (it's certified as safe enough for air freight), Lotus' infamous build quality could be a problem.
From what I can see, the biggest threat to production is side-impact crash testing on the validation prototypes. The first generation prototypes apparently failed this test. One can only hope the improvements to the validation prototypes corrected this problem.
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Darryl 3:21PM (9/05/2007)
I've heard it said that the last car startup to survive was Chrysler in 1925, and the examples you mention are often talked about, but things have changed a lot since the days of Tucker and Hudson. In addition, you have to remember we are starting an EV company, not just another gas car company, which all of the examples you mention were. That doesn't guarantee success but it sure makes a difference.
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Don 5:10PM (9/05/2007)
Once established carmakers get their electric cars to market, Tesla's finished.
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Sam Abuelsamid 5:52PM (9/05/2007)
Darryl, It's true that some of the examples I mentioned were were older but examples like Vector and Delorean were more recent. I do think that Tesla has a far better and more realistic business plan than pretty much any other startup in recent memory. As you know I'm less skeptical of your chances than some other commentators. Nonetheless the risks remain high.
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Tony Belding 8:19PM (9/05/2007)
There are a lot of different ways this could play out, but I think for Tesla to lay down and die the way DMC did is pretty unlikely. (And even at that, people who own DMC-12s today aren't crying about it -- they are still cool cars and they are still supported.)
I do think it's likely that in a few years some established car companies like Toyota, GM, Renault, Nissan or Mitsubishi will have some success with BEVs or PHEVs, or both. When that happens, all the other major car companies that have *not* been investing in that research will find themselves scrambling to catch up with the technology.
At that time, some of them will be very highly motivated to buy a company like Tesla, if it's for sale.
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Joseph 4:56PM (9/06/2007)
"The first generation prototypes apparently failed this test. One can only hope the improvements to the validation prototypes corrected this problem."
Of course the problem has been solved. It's illegal to sell a car that doesn't pass the requirements. By the way, Musk has said that he wants WhiteStar to have a 5 star crash test rating.
Also, I have faith that Tesla will survive. Why?
Well, I think Americans are scrambling for an American ccr maker that's seen as "hip" and green. And what can greener than an electric car? What can be hipper than a car that was designed in the same area that the oh so precious electronics revelution began? And how many startups have a super-rich billionair 30 something year old (Elon Musk) as their main investor?
Tesla has alot going for them. :)
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Kardax 11:24PM (9/05/2007)
Heh, I was thinking near term in my first post :)
Longer term, if Tesla survives this critical growth stage, they're destined to be bought out by a well-established automaker. They've got enough patents that I'm sure a lot of companies would be interested.
The odds of Tesla staying an independent company are rather remote, I think. If for several years Tesla is raking in cash being the world's premier EV producer, eventually the existing automakers will catch on and start attacking Tesla's market.
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summazooma 7:14AM (9/06/2007)
As a technical exercise, Tesla doesn't concern me. What does, however, can be neatly summed up by the problems documented in an AB post from a few months ago when the owner of a Lincoln Mk8 discovered that they're electonics were, not just out of date but, no longer available as service parts.
With Tesla, I would think that we'd be hearing about dealer body and support organization by now. Does any of this exist, yet?
I realize that we've heard alot about Tesla being "a new kind of car company" but, bottom line is that, even for those early adopters for whom the Roadster may be nth in the personal fleet line-up, there will still come times when simple service (and not even that associated with the drivetrain) needs to take place... and, then, of course, you've got to be able to handle the failures in addition to the simple service. The failures are where you really have to earn your keep and why Lexus really cemented a reputation for being a true Luxury brand.
Anyways, I hope they do well, really do, but I'm afraid that (and this is where Sam's older examples come into play), like Preston Tucker, there's great opportunity for huge ambition being married to potentially fatal naivete.
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Sam Abuelsamid 8:00AM (9/06/2007)
Naivete is not a word I would use to describe the team at Tesla. I think that they are well aware of the challenges they face. That doesn't mean the potential pitfalls aren't there, but they're definitely not going in blind.
As to their sales and service network, they have announced that they will have company owned outlets for sales and service. http://www.autobloggreen.com/2007/08/05/tesla-announces-the-site-of-their-first-store/
and http://www.autobloggreen.comwww.autobloggreen.comwww.autobloggreen.comwww.autobloggreen.comwww.autobloggreen.comwww.autobloggreen.com/2007/05/01/teslas-elon-musk-on-what-they-plan-for-their-stores/
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