TESLA Motorcycles Industry
“Tesla electric car” redirects here. It is not to be confused with Nikola Tesla electric car hoax.
Tesla Motors
Tesla’s global corporate headquarters
in Palo Alto, California
Type
Public company
Traded as
NASDAQ: TSLA
NASDAQ-100 Component
Industry
Automotive, Renewable Energy Storage Systems
Founded
2003; 13 years ago
Founders
Martin Eberhard
Marc Tarpenning
Elon Musk
JB Straubel
Ian Wright
Headquarters
Palo Alto, California, U.S.
37.394178°N 122.149866°WCoordinates: 37.394178°N 122.149866°W
Key people
Elon Musk (chairman and CEO)
JB Straubel (CTO)
Jason Wheeler (CFO)
Jay Vijayan (CIO)
Products
Electric luxury cars
Automotive components
Rechargeable energy storage systems
Revenue
US$5.29 billion (2015)
Operating income
US$-186.7 million (2014)
Net income
US$-294.0 million (2014)
Total assets
US$8.092 billion (2015)
Total equity
US$1.284 billion (2015)
Owner
Elon Musk (22.25%)
Number of employees
12,000 (June 2015)
Website
teslamotors.com
tesla
.com
Footnotes / references
Tesla Motors Financial Performance
Tesla Motors, Inc. is an American automotive and energy storage company that designs, manufactures, and sells luxury electric cars, electric vehicle powertrain components, and battery products. Tesla Motors is a public company that trades on the NASDAQ stock exchange under the symbol TSLA. During the first quarter of 2013, Tesla posted profits for the first time in its history.
Tesla first gained widespread attention following their production of the Tesla Roadster, the first fully electric sports car.The company’s second vehicle is the Model S, a fully electric luxury sedan, which was followed by the Model X, a crossover. Its next vehicle is the Model 3. Global Model S sales passed the 100,000 unit milestone in December 2015, three and a half years after its introduction. The Model S was the world’s best selling plug-in electric vehicle in 2015. As of December 2015, the Model S ranks as the world’s second best selling plug-in car in history after the Nissan Leaf. Tesla manufactures equipment for home and office battery charging, and has installed a network of high-powered Superchargers across North America, Europe and Asia. The company also operates a Destination Charging program, under which shops, restaurants and other venues are offered fast chargers for their customers.
CEO Elon Musk has said that he envisions Tesla Motors as an independent automaker, aimed at eventually offering electric cars at prices affordable to the average consumer. Pricing for the Tesla Model 3 is expected to start atUS$35,000 before any government incentives, and deliveries are expected to begin by 2017. In 2015, Tesla announced Tesla Energy, a suite of batteries for homes (Powerwall), businesses, and utilities (Powerpack).
Overview:
Tesla Motors is named after electrical engineer and physicist Nikola Tesla The Tesla Roadster uses an AC motor descended directly from Tesla’s original 1882 design.The Tesla Roadster, the company’s first vehicle, is the first production automobile to use lithium-ion battery cells and the first production EV with a range greater than 200 miles (320 km) per charge. Between 2008 and March 2012, Tesla sold more than 2,250 Roadsters in 31 countries. Tesla stopped taking orders for the Roadster in the U.S. market in August 2011. Tesla unveiled the Tesla Model S all-electric sedan on March 26, 2009. In December 2012, Tesla employed almost 3,000 full-time employees.By January 2014, this number had grown to 6,000 employees.
History:
Tesla Motors was incorporated in July 2003 by Martin Eberhard and Marc Tarpenning who financed the company until the Series A round of funding. Both men played active roles in the company’s early development prior to Elon Musk’s involvement.Musk led the Series A round of investment in February 2004, joining Tesla’s board of directors as its chairman. Tesla’s primary goal was to commercialize electric vehicles, starting with a premium sports car aimed at early adopters and then moving as rapidly as possible into more mainstream vehicles, including sedans and affordable compacts.
Musk took an active role within the company and oversaw Roadster product design at a detailed level, but was not deeply involved in day-to-day business operations;[36]Eberhard acknowledged that Musk was the person who insisted from the beginning on a carbon-fiber-reinforced polymer body and he led design of components ranging from the power electronics module to the headlamps and other styling.[37] In addition to his daily operational roles, Musk was the controlling investor in Tesla from the first financing round, funding the large majority of the Series A capital investment round of US$7.5 million with personal funds.
The insignia of Tesla Motors as seen on a Tesla Roadster Sport
From the beginning, Musk consistently maintained that Tesla’s long-term strategic goal was to create affordable mass market electric vehicles.[38] Musk received the Global Green 2006 product design award for his design of the Tesla Roadster, presented by Mikhail Gorbachev,[39] and he received the 2007 Index Design award for his design of the Tesla Roadster.[40]
Musk’s Series A round included Compass Technology Partners and SDL Ventures, as well as many private investors. Musk later led Tesla Motors’ Series B, US$13 million, investment round that added Valor Equity Partners to the funding team. Musk co-led the third,US$40 million round in May 2006 along with Technology Partners. Tesla’s third round included investment from prominent entrepreneurs including Google co-founders Sergey Brin & Larry Page, former eBay President Jeff Skoll, Hyatt heir Nick Pritzker and added the VC firmsDraper Fisher Jurvetson, Capricorn Management and The Bay Area Equity Fund managed by JPMorgan Chase.[41] The fourth round in May 2007 added another US$45 million and brought the total investments to over US$105 million through private financing.
In December 2007, Ze’ev Drori became CEO and President. In January 2008, Tesla fired several key personnel who had been involved from the inception after a performance review by the new CEO.[42] According to Musk, Tesla was forced to reduce the company workforce by about 10% to lower its burn rate, which was out of control in 2007.[43] In May 2008, The Truth About Cars launched a “Tesla Death Watch”, as Tesla needed another round of finance to survive. In October 2008, Musk succeeded Drori as CEO. Drori became vice-chairman, but then left the company in December. In December a fifth round added another US$40 million avoiding bankruptcy.[44][45]
By January 2009, Tesla had raised US$187 million and delivered 147 cars. Musk had contributed US$70 million of his own money to the company.[43][46] On May 19, 2009, Germany’s Daimler AG, maker of Mercedes-Benz, acquired an equity stake of less than 10% of Tesla for a reported US$50 million.[47] In July 2009, Daimler announced that Abu Dhabi‘s Aabar Investments bought 40% of Daimler’s interest in Tesla.[48]
The Tesla obelisk is used to identify the Supercharger network sites in California.
In June 2009 Tesla was approved to receive US$465 million in interest-bearing loans from the United States Department of Energy. The funding, part of the US$8 billion Advanced Technology Vehicles Manufacturing Loan Program, supports engineering and production of the Model S sedan, as well as the development of commercial powertrain technology.[49] The low-interest loans are not related to the “bailout” funds that GM and Chrysler received, nor are they related to the 2009 economic stimulus package. The loan program was created in 2007 during the George W. Bush administration.[50] Tesla repaid the loan in May 2013. Tesla was the first car company to have fully repaid the government, while Ford, Nissan and Fisker had not.[51]
The company announced in early August 2009 that it had achieved overall corporate profitability for the month of July 2009.[52] The company said it earned approximately US$1 million on revenue of US$20 million. Profitability arose primarily from improved gross margin on the 2010 Roadster, the second iteration of Tesla’s award-winning sports car. Tesla, which like all automakers records revenue when products are delivered, shipped a record 109 vehicles in July and reported a surge in new Roadster purchases. In September 2009, Tesla announced an US$82.5 million round to accelerate Tesla’s retail expansion.[53] Daimler participated in the round to maintain equity ownership from its initial investment.
Tesla Motors signed a production contract on July 11, 2005, with Group Lotus to produce “gliders” (complete cars minus powertrain).[54]The contract ran through March 2011, but the two automakers extended the deal to keep the electric Roadster in production through December 2011 with a minimum number of 2,400 units,[55] when production ended,[dated info] mostly because of tooling changes orchestrated by one of its suppliers.[56] In June 2010, it was reported that Tesla sold a total of US$12.2 million zero emission vehicle credits to other automakers, including Honda, up to March 31, 2010.[57]
In October 2014, both Daimler and Toyota sold their holdings of Tesla shares.[58][59] As of 2014, Tesla has a Corporate Average Fuel Economy (CAFE) of 276 mpg.[60]
2010 initial public offering[edit]
On January 29, 2010, Tesla Motors filed Form S-1 with the U.S. Securities and Exchange Commission,[61] as a preliminary prospectus indicating its intention to file an initial public offering (IPO) underwritten by Goldman Sachs, Morgan Stanley, J. P. Morgan, and Deutsche Bank Securities. On May 21, 2010, Tesla announced a “strategic partnership” with Toyota, which agreed to purchase US$50 million in Tesla common stock issued in a private placement[62][63] to close immediately after the IPO.[64] Executives at both companies said that they would cooperate on “the development of electric vehicles, parts, and production system and engineering support.”[63] Less than two months later, Toyota and Tesla confirmed that their first platform collaboration would be to build an electric version of the RAV4 EV.[65]
On June 29, 2010, Tesla Motors launched its initial public offering on NASDAQ. 13,300,000 shares of common stock were issued to the public at a price of US$17.00 per share.[66] The IPO raised US$226 million for the company.[67] It was the first American car maker to go public since the Ford Motor Company had its IPO in 1956,[68][dated info] and by 2014 Tesla had market value half that of Ford.[69] During November 2013, Tesla’s stock fell more than 20 percent, following news of a third Model S fire. All of those Model S fires had developed several minutes after the cars had struck significant road debris at high speeds and all of the vehicles had provided warnings to the occupants of serious battery damage, advising that an immediate stop was required. All three owners ordered new Model Ss. In the following months Tesla developed a battery protection system as a no-cost retrofit to all Model Ss.[70] No further regulatory action was taken, although there have been a few incidents since, most recently January 2016, with a charging Model S at a Norwegian Supercharger station.[71] Despite the drop, Tesla was still the top performer on the Nasdaq 100 index in 2013.[72] Tesla was seeking to sell 40,000 electric vehicles worldwide in 2014, adding China, Hong Kong, Japan, and Australia to the list of countries where it exports cars,[73] but it later reduced its guidance on sales down to 33,000 units for 2014 in November 2014.[74]
Production[edit]
Tesla announced in November 2015 that during the third quarter of 2015 produced a record 13,091 vehicles, and also revised its target sales for 2015 to between 50,000 and 52,000 vehicles, including both of its models available for retail sales. The company expects to achieve an average production and deliveries of 1,600 to 1,800 vehicles per week for Model S and Model X combined during 2016.[77][78] Tesla plans to deliver 80,000 to 90,000 new Model S and Model X vehicles in 2016.[79]In October 2015, Tesla Motor announced the company is negotiating with the Chinese government on producing cars domestically. Local production has the potential to reduce the sales prices of Tesla models by a third. However, foreign automakers are generally required to establish a joint venture with a Chinese company to produce cars domestically[75] Elon Musk clarified that production will remain in the U.S. in the foreseeable future, but if there’s sufficient local demand for the Tesla Model 3 in China, a factory could be built in the country as soon as a year after the launch of the new model. Production in Europe will also depend on the region’s demand for the Model 3.[76]
Quarter
Model S
Model X
Total
Q1 2015
10,030
0
10,030
Q2 2015
11,507
0
11,507
Q3 2015[77]
13,091
6
13,097
Q4 2015
17,192
208
17,400
Corporate strategy[edit]
Tesla’s strategy has been to emulate typical technological-product life cycles and initially enter the automotive market with an expensive, high-end product targeted at affluent buyers. As the company, its products, and consumer acceptance matured, it is moving into larger, more competitive markets at lower price points.[80][81]
Tesla has a three step strategy, where the battery and electric drivetrain technology for each new type would be developed and paid for through sales of the former types, starting with Tesla Roadster and moving on to the Tesla Model S, Model X and Model 3 vehicles.[35][82] Step one was making the Tesla Roadster high price, low volume. The Model S is step two with mid price, mid volume. The third generation will be low price, high volume.[38][83]
Aiming premium products at affluent “thought leaders” is a very well-known business strategy in Silicon Valley and the global technology industry, where prices for the first versions of, for example, cellular phones, laptop computers, and flat-screen televisions start high but drop with subsequent products as the technology matures and production volumes increase.[84] According to a blog post by Musk, “New technology in any field takes a few versions to optimize before reaching the mass market, and in this case it is competing with 150 years and trillions of dollars spent on gasoline cars.”[85]
While the Roadster’s base price was US$109,000,[86] the Model S’s base price was US$57,400,[29][87] and the Model 3’s projected base price is near US$35,000.[20]
Tesla Motor’s high degree of vertical integration is a rare strategy in the automotive industry, where companies typically focus on engine manufacturing and vehicle assembly.[88]
One of Tesla’s stated goals is to increase the number and variety of electric vehicles (EV) available to mainstream consumers by:
selling its own vehicles in company-owned showrooms and online;[89]
selling powertrain components to other automakers[90][91]
serving as a catalyst and positive example to other automakers[92][93]
Tesla focuses on pure electric propulsion technology, even for larger vehicle segments and ranges beyond 200 miles. Musk won the 2010 Automotive Executive of the Year Innovator Award for hastening the development of electric vehicles throughout the global automotive industry.[94]
Tesla would like to disrupt the automotive industry in a way that Tesla investor Peter Thiel (see PayPal Mafia) calls complex coordination, which means many innovative pieces fit together in just the right way and when assembled has tremendous advantages.[95]
Arnnon Geshuri, the Vice President of Human Resources since November 2009, has committed to bringing manufacturing jobs “back to California”.[96][97] In 2015, Geshuri led a hiring spree for Tesla about which he said; “In the last 14 months we’ve had 1.5 million applications from around the world. People want to work here.”[98] Geshuri also is placing an emphasis on hiring military veterans in large numbers saying “Veterans are a great source of talent for Tesla, and we’re going after it.”[97][99]
Business model and US automotive dealership disputes[edit]
Tesla gallery in Austin, Texas.
Tesla’s strategy of direct customer sales and owning its own stores and service centers is a significant departure from the standard dealership model currently dominating the U.S. vehicle marketplace.[106] Tesla Motors is the only automaker that sells cars directly to consumers, with all other automakers using independently owned dealerships[107][108] (partly due to an earlier conflict),[69][109] although some automakers provide online configuration and/or financing.[110][111][112] 48 states have laws that limit or ban manufacturers from selling vehicles directly to consumers,[113][114][115] and even though Tesla Motors has no independent dealerships, dealership associations in multiple states have filed numerous lawsuits against Tesla Motors, trying to block the company from selling cars in some states. North Carolina and New Hampshire sided with Tesla Motors while Virginia and Texas have taken the opposite position.[116]Tesla operates stores or galleries[100][101]—usually located in shopping malls—in 22 U.S. states and Washington DC. Customers cannot purchase vehicles from the stores,[102][103][104] but must order them on the Tesla Motors website instead.[105] The stores act as showrooms that allow people to learn more about Tesla Motors and its vehicles. The galleries are located in states with more restrictive dealership protection laws, which prevent discussing prices, finances, and test drives, as well as other restrictions.
This situation is unique to Tesla Motors’ US operations. Other countries do not have such regulatory laws dealing with car dealers and manufacturers. The Federal Trade Commission suggests allowing direct manufacturer sales,[117][118] which analysts believe would save consumers an average of 8% on their car purchase.[69][119] The National Automobile Dealers Association states that franchises (such as offered by its members) offer better value for customers than direct sales.[106][120]
In August 2015, Tesla launched a wholesale revamp of its stores worldwide as the company prepares to debut its Model X. The stores will include interactive displays focused on four major themes: safety, autopilot features, the company’s charging network and the dual motors that power each axle.[121]
Restrictive states[edit]
Texas
Texas law states “Except as provided by this section, a manufacturer or distributor may not directly or indirectly:(1) own an interest in a franchised or nonfranchised dealer or dealership;(2) operate or control a franchised or nonfranchised dealer or dealership; or(3) act in the capacity of a franchised or nonfranchised dealer. (Tex. Occ. Code Ann. § 2301.476) and “A motor vehicle shall not be advertised for sale in any manner that creates the impression that it is being offered for sale by the manufacturer or distributor of the vehicle. An advertisement shall not contain terms such as “factory sale,” “fleet prices,” “wholesale prices,” “factory approved,” “factory sponsored,” “manufacturer sale,” use a manufacturer’s name or abbreviation in any manner calculated or likely to create an impression that the vehicle is being offered for sale by the manufacturer or distributor, or use any other similar terms which indicate sales other than retail sales from the dealer” (43 Tex. Admin. Code § 215.261). These laws make purchasing a vehicle from Tesla Motors in person, at a Tesla Gallery, difficult. Thus, all Texas orders are taken via the internet or over the phone. A resident of Texas may still easily purchase a vehicle from Tesla Motors, but purchasing the vehicle is handled as an out-of-state transaction. This may result in the inability to include Texas state sales tax in the loan, and new owners cannot take advantage of the personal delivery of their new Tesla at their home or office, usually picking up their car at a Tesla Service Center in a neighboring state instead. New owners must then register the vehicle with the state and pay the sales tax when license tags are ordered. In 2015 Tesla had lobbied the Texas Legislature to modify Texaslaw[122] to allow Tesla to sell directly to consumers and specifically allow Tesla employees to discuss “financing, leasing, or purchasing options” at the firm’s existing stores inAustin, Dallas, and Houston.[123] Texas was considering passing legislation to allow Tesla to operate in the state[124] but legislation was not passed.[125]
New Jersey
On March 10, 2014, it was announced that New Jersey Motor Vehicle Commission and Governor Chris Christie‘s administration would be holding a meeting to pass a new proposal into law. This new proposal, PRN 2013-138, was announced one day before it was to be put into law. Tesla Motors responded by saying that the proposal “seeks to impose stringent licensing rules that would, among other things, require all new motor vehicles to be sold through middlemen and block Tesla’s direct sales model,” and that “[Governor Christie’s] Administration has decided to go outside the legislative process by expediting a rule proposal that would completely change the law in New Jersey.”[126] The meeting was for 2 pm the next day. The law was passed, and “Tesla will no longer [be able to] sell electric cars in New Jersey, effective April 1”. Diarmuid O’Connell, Tesla Vice President of Business Development, said, “Worse, it has done so without any reasonable notice or even a public hearing.”[127] Forbes contributor Mark Rogosky said, “The state’s new rules protect its auto dealers from having to compete with Tesla’s direct sales model”; he goes on to point out that this is a direct contrast from what Christie said earlier, “We are for a free-market society that allows your effort and ingenuity to determine your success, not the cold, hard hand of the government.”[128] Kevin Roberts, a spokesman for the Christie administration, responded by saying “it was the [Tesla Motors] company, not the governor’s office, that was attempting to bypass normal procedures.”.[126][129] In March 2015 the ban on Tesla Motor’s operations in New Jersey was lifted, but with restrictions (maximum of 4 locations, and 1 service center).[130]
Michigan
On October 1, 2014, Michigan House Bill 5606, drafted “to keep automakers from forcing dealers to charge different documentation fees to different customers,”[131] was amended with a section stating that a manufacturer shall not “sell any new motor vehicle directly to a retail customer other than through its franchised dealers.” The word “its” was removed, which assumed the manufacturer already had dealerships. Both houses passed the revised bill the next day, with only one nay vote from Tom McMillin in either house of the Michigan Legislature. Tesla argued that the original law would have allowed them to sell, because they didn’t already have franchised dealers.[132] On October 21, General Motors released a statement saying that governor Rick Snyder should sign the bill into law because “we believe that House Bill 5606 will help ensure that all automotive manufacturers follow the same rules to operate in the State of Michigan.” The same day, Snyder signed the bill. Tesla responded to the GM statement by saying that “GM distorts the purpose of the franchise laws which are in place not to cement a monopoly for franchised dealers, but rather to prevent companies with existing franchises from unfairly competing against them.”[133] The law in Michigan goes so far as to ban a manufacturer from opening a service center for its cars, effectively banning Tesla Motors from opening even a service center.[134]
Others
West Virginia does not allow Tesla-owned stores or showrooms.[135]
Indiana allows manufacturer sales for 30 months, ending direct Tesla sales by the end of 2017.[136]
Permissive states[edit]
In September 2014 Massachusetts allowed Tesla to sell directly.[137] Georgia has legislation favorable to Tesla.[135][138]
In May 2015, the state of Maryland approved, through House Bill 235,[139] direct Tesla sales to consumers beginning in October 2015, allowing 4 stores. The legislation was crafted specifically for Tesla.[140][141]
Certified Pre-Owned program[edit]
Under a buyback program called Certified Pre-Owned (CPO) available in 37 states a Tesla Model S is sold with the right to return it to Tesla after three years for a reimbursement of between 43% and 50% of its initial price. This level of payment aims to match the trade-in value of a German luxury car of the same age. In addition to supporting a high resale value of its cars, Tesla Motors hopes to secure a steady supply of used cars. These cars will be refurbished and sold as second hand, immediately available from the Tesla stores with a certain warranty. According to Automotive News, the profit margin on used car sales in the USA is about triple that on new cars and since Tesla sells its cars directly to the end user, the prospect of selling the same car a second or third time to a new segment of the market can potentially be very profitable for Tesla.[142] In May 2015 Tesla started selling their refurbished Model S in the USA[143] and had by the end of that month sold 1600 cars to buyers younger, less wealthy and to a lesser extent from California than those who bought a new one.[144] As of July 7, 2015 there were 269 pre-owned Tesla Model S available for purchase in the USA from Tesla with a four-year, 50,000-mile limited warranty.[145] As of September 27, 2015 similar programs are available in Canada from three locations,[146] and in these European countries: Austria (3 locations),[147]Belgium (3 locations),[148] Denmark (2 locations),[149] France (3 locations),[150] Germany (6 locations),[151] Great Britain (3 locations),[152] the Netherlands (4 locations),[153]Norway (5 locations),[154] Sweden (2 locations)[155] and Switzerland (5 locations).[156]
Technology[edit]
Tesla Motors builds electric powertrain components for vehicles from other automakers, including the lowest-priced car from Daimler, the Smart ForTwo electric drive, the ToyotaRAV4 EV, and Freightliner’s Custom Chassis Electric Van.
Battery technology[edit]
Tesla Electric Car Recharging Station (USA, 2014)
Unlike other automakers, Tesla does not use single-purpose, larger format cells. Tesla uses thousands of lithium-ion 18650 commodity cells. 18650 cells are small, cylindrical battery cells, which are usually found in laptops and other consumer electronics devices. Tesla Motors uses a version of these cells, designed to be cheaper to manufacture and to be lighter than the standard cells. The cost and weight savings were made by removing some safety features which, according to Tesla Motors, are redundant because of the advanced thermal management system and a protective intumescent chemical in the battery pack. This chemical is intended to prevent battery fires.[157] Currently Panasonic, a Tesla Motors investor, is the sole supplier of the battery cells for the car company.
Tesla Motors may have the lowest rates for electric car batteries; the estimated battery costs for Tesla Motors is around US$200 per kWh.[157][158] <a