2012 Tesla Model S Electric-Car Deliveries To Start Today

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2012 Tesla Model S Signature

2012 Tesla Model S Signature

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They said it couldn't be done, but it looks like Tesla Motors has indeed pulled it off.

If all goes to plan, at 3:30 pm Pacific today, CEO Elon Musk and other Tesla executives will hand over the keys of a new 2012 Tesla Model S to the first retail buyer to take delivery of the all-electric luxury sport sedan.

The ceremony, which Tesla will webcast live from its Fremont, California, assembly plant, will mark the beginning of a new phase for the venture-funded startup carmaker from Silicon Valley.

Now that Tesla Motors [NSDQ:TSLA] has become a real carmaker, albeit a young one, it faces entirely new challenges:

  • Can it deliver a steady stream of Model S vehicles to the backlog of what it says are more than 10,000 buyers who've put down deposits?
  • Will the Model S be reliable, and if early cars have any quality issues, can the company rectify them quickly and painlessly?
  • Will the mix of orders skew sufficiently to high-end models that the Tesla Model S range overall provides a healthy profit margin?
  • And, can sales of the Model S--5,000 this year, 20,000 next year, says CEO Musk--generate enough revenue to cover not only its costs but future model development?

2012 Tesla Model S display screen [Photo: Flickr user jurvetson]

2012 Tesla Model S display screen [Photo: Flickr user jurvetson]

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The first Model S deliveries will all be of the high-end limited edition Signature Series, which has the largest 85-kilowatt-hour battery pack (rated by the EPA at 265 miles of range) and special trim and features to identify it as a special edition.

Technically, the first few Model S cars were delivered two weeks ago--the very first one went to Tesla board member Steve Jurvetson, who is already driving it around Silicon Valley and has blogged about its central display screens--but today's cars are the first retail deliveries.

They're still likely to go to insiders, Tesla Motors investors, and venture capitalists, including such early funders as Nancy Pfund of DBL Investors.

Early struggles

Tesla struggled to get its first car, the two-seat all-electric Roadster, on sale in the fall of 2008.

2011 Tesla Roadster Sport. Photo by Joe Nuxoll.

2011 Tesla Roadster Sport. Photo by Joe Nuxoll.

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The young company learned a lot during that process.

It missed several deadlines, it had to recall its first few hundred cars to replace a faulty two-speed transmission, it raised the Roadster's price to $109,000 before depositors had received their cars, and of course it was caught up in the auto-industry meltdown that accompanied the global recession of 2008.

In retrospect, Tesla may be glad it could cut its teeth on a low-volume specialty car before going into mass production of higher-volume sedans.

The other highly publicized venture-funded plug-in startup carmaker, Fisker Automotive, took a different and riskier path, launching directly into volume assembly of its very first car, the 2012 Fisker Karma.

That vehicle has encountered similar delays and quality issues to those Tesla had with its Roadster, but in a far more public fashion.

2,600 Roadsters

Adapted from the existing Lotus Elise sports car, the Tesla Roadster was larger, differently styled, and much heavier than its Lotus sibling, due to the 900-pound battery pack sitting behind the occupants where the Elise's engine would have been.

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Comments (19)
  1. One of Tesla's great achievements has been effective use of the internet for advertising. All major auto companies still spend hundreds of millions on TV, magazine and newspaper advertising. The enormous amount of money saved goes to lower the price of the car and give the purchaser better value.

    Most independent auto dealerships are excellent, but unfortunately there are a few bad apples that have hurt GM severely with a reputation of poor service and gouging. GM has been powerless to completely stop this because of state dealership laws. Tesla has decided to avoid this possibility by owning their own outlets. Until these antiquated laws are repealed, Tesla will avoid having outlets in these states.

  2. @Roy: I suspect you will have a very, very long wait for any of those "antiquated" laws to be repealed in any state. Though I'd be eager to see any evidence to the contrary.

    And I'm skeptical of the notion that Tesla will choose to sell only in the few states that do not have laws requiring cars to be sold through independently owned third-party businesses, e.g. dealerships. CA does not have such a requirement, but too many states with affluent, forward-looking residents do. We shall see.

  3. Having some familiarity with GM's behavior towards their dealerships over the past decade, the word I would use to characterize GM's behavior is that of scum. Pure scum. Dealerships that had been with GM for decades were tossed out due to GM's intense desire to satisfy the pols that held the pursestrings to their survival. For 40 years I only bought GM products. Now I even refuse to buy any of their used cars. Giving GM the ability to screw their dealerships by removing laws protecting independents is anti-competitive. We don't need to resurrect the GM monopoly that existed during the 50's and 60's. GM mostly provides jobs for our Asian competitors.

  4. it's essentially an issue of sales channels. Franchise dealers vs direct sales. Apple and Sony are moving into a direct sales model, GM may well have to do so as well. Dealers may become more like Best Buy or may become obsolete or have to represent smaller makers like Kia or Cherry.

  5. @Pat: See my comment above Kent's. In most states, dealer groups got laws passed--decades ago--making it ILLEGAL for GM to sell you a car directly. Electronics retailers have never been able to do such that, but car dealer groups have done it in most states.

    Auto companies have concluded that changing those laws is pretty much a nonstarter. GM would love to do as you say. But, legally, it can't.

    And it is unlikely to be able to do so in the future. There's a lot of bad blood left over from the number of dealers that were closed by GM & Chrysler during the bailouts.

    Dealers have no desire to do automakers any favors--and why would they? What reason is there for dealers to support that?

  6. that seems like a huge over-stepping by the govt.

    what is the reason given preventing gm or any car company from selling directly, should they choose to do so ?

  7. The wait is over, congratulations Tesla!

  8. For many pessimists, their underlying logic was that it is very difficult to start an auto company: high cost of entry and plenty of cutthroat competition. Which is certainly true. But Tesla avoided a lot of those issues - without the need for a very complicated modern gasoline engine and transmission, their cost of entry was relatively low. And although they haven't seemed to have taken advantage of it, Tesla had access to M-B and Toyota's parts bins. One of the great advantages an established automaker has in turning out a new model is the fact that most of its parts
    they are already building.Tesla will have that advantage (in spades) when they build their Model X, and beyond. It actually will get a lot easier for Tesla from here on out.

  9. Where's Kent today? ;-)

  10. Regardless of your opinions about him, it wasn't right to steal Kent's online identity... And I read an article today that said MB fans will recognize the electric window switches and shift boot.

  11. The introduction of the Fisker Karma shouldn't have been more risky. The conversion of the Lotus Elise using AC Propulsion and Tesla Motors' technologes is little different from combining the chassis expertise of Fisker Coachbuild (http://www.fiskercb.com/), the low production propulsion technologies Quantum Technologies (http://www.qtww.com/) and the battery technology of A123 (http://www.a123systems.com/). If it weren't for the battery pack problems from A123, people would only complain about fit / finish and infotainments system issues. I would put the relative difficulties on par, especially since Tesla Motors and Lotus Engineering had to redesign the Lotus Elise aluminum frame and replaced 90% off the parts.

  12. John, very positive and up beat story. You certainly raise critically important issues relative to Tesla's long term success. I wish them lots of luck because they are going to need it. Tesla website latest Q1 SEC filing states as of March 31, 2012, 2,250 Roadster have been sold & remaining ones will be sold outside of US. I think 2,600 is too many.Small point.
    There is too much Hollywood in their videos. How many cars are they delivering today? It's great when you deliver to investors who will only tell you behind closed doors how the car is doing! When do the $40,000 depositors start getting cars!
    You should read their Q1 filing. Warranty costs for Q1 up to $869,000 from a year ago at $576,000. Something is going on and you find out.

  13. Too Hollywood? Really? We know when the deposit holders will start getting their cars, this year, starting today. How about judging their SEC filings for Q3 and Q4 of this year, instead of Q1, which is all about ramping up testing/production.

    I guess haters gotta hate, it's what they do.

  14. I would expect warranty costs to rise, as Tesla sells more cars, they will naturally have more warranty claims. the key is the $Warranty claims / $ total revenue of cars under warranty... i ahve no idea what that should be and what their warranty reserve is

  15. Richard, here is your Commented On: "Betting Tesla's Elon Musk $1 Million, Dan Neil Hopes To Lose" just 10 short months ago, quote " Musk is all talk and has little knowledge of automotive... Tesla may go bankrupt before Neil collects his due." I think you owe Elon an apology for being wrong. What do you have against Tesla? You seemed to support EV in general.

  16. Such an important day in EV history, yet such negative reporting on Tesla,oozing scepticism and sadly lacking vision on Tesla's possibilities.

    Oh well, we can't all be fans and at least the author acknowledged, though reluctantly that congratulations are in order and I heartily agree with that.

    So: congratulations Tesla!

  17. this is a milestone day for tesla and yes they have to prove production and work out bugs and still make money but it's a milestone, much as the Volt, the Leaf and the Prius are milestones

  18. Looks like journalists are starting to get to drive the model S.
    http://www.youtube.com/watch?v=Qjt2pPlgNGU GigaOM

  19. The full event, 26 minute of it anyway, is here.

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