TESLA’S (MORTAL) COIL by Scott Budman
If you’ve ever sat inside a Tesla sportscar, you know it feels great.
It’s sexy. It’s fast. It’s super expensive. And, perhaps best of all, it’s green.
It’s the kind of car the kid in the 280-ZX commercials of my youth would look at and say, wistfully, “someday.”
But Tesla’s timing is also proving to be exquisitely bad…and it may kill off one of the Silicon Valley’s better ideas. The car itself may be the next DeLorean. Great-looking, unusual, trend-setting .. and ultimately, a kitschy collector’s item. Already, ValleyWag is calling Tesla CEO Elon Musk the next Preston Tucker.
But back to timing. When the gas station across the street from the Menlo Park dealership offered up fuel for $4.75 a gallon, it looked like the Tesla roadster’s six-figure price tag would pay for itself in a matter of a few years. And when that same six-figure price tag was made palatable by a less expensive sedan version, to come out of San Jose, no less, it looked like a car company for everyone.
Last year, San Jose’s Mayor Chuck Reed, in a ride that is beginning to resemble Mike Dukakis in his tank, proudly announced that his city would be the manufacturing site for the next-generation Tesla . . .and with lots of new jobs to boot.
Fast forward to now. About 100 people (Google’s founder included) have ponied up and are driving the (still beautiful & green) sportscars. Many others are on the waiting list — but in today’s economy, it’s a good question whether those cars will ever bought & paid for. Tesla even admits that despite the nosebleed price, it’s still losing money on each car that drives off the lot.
And speaking of money, Tesla itself is running out of it. Plans for the sedan have been put off (again), the big new San Jose assembly plant is being put on hold — and San Jose (and Mayor Reed) is looking like the groom left at the altar.
Maybe it’s just not good business for a start-up to charge $109,000 for its initial product. Maybe Tesla got in way over its head. Throw in some really, really bad luck (a crippled economy, with the auto industry doing even worse), and you have the makings not of a planet-saving car company, but of a good idea done badly, with a few satisfied customers, and a whole lot of burned investors.
I’d love to see Telsa succeed .. part of it reminds me of what the Valley does so well, part of it is that the sexy little car is exactly what our planet needs. But I wouldn’t bet on Tesla, at least not in the short term. For a variety of reasons, it’s no longer giving the people what they want at a price they can afford . . . and that’s just not good business.
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