and will likely hit the market sometime at the
beginning of 2014, at prices close to the Model S.
Yet further down the road, should Tesla survive
and thrive, a prospect that is by no means certain,
things get more interesting. Later that year, a
third-generation Tesla Motors car will be unveiled. This is step three on the Musk master
plan. The vehicle—it’s not yet named—will be an
affordable $30,000 car. It truly may be a Tesla
for the masses.
You might think of Tesla as a company that
exists to sell electric cars. Yet after spending time
with Musk, you begin to see that Tesla is not
really a company that exists to sell electric cars.
Rather, Tesla is a company that exists to overturn
the entire global automotive infrastructure, an
infrastructure that presently functions on pe-
troleum and internal combustion engines but
in Musk’s belief will eventually, and inevitably,
glide forth on exhaust-free electricity. To Musk,
the most significant problem with this transition
is that we don’t know how fast it can or will hap-
pen. And this leads to other questions. How
quickly will Musk be able to scale up his business
to have an actual impact on the world? And when
will his competitors—some of whom, Toyota
and Daimler included, have paid Tesla hundreds
of millions of dollars to build motors and battery
packs for their own electric cars—get on board
in a big way?
TESLA MODEL S: THE DOUBLE THREAT
It’s an electric car competing as a luxury sedan. How does it compare in both worlds?
PRICE*
0-TO- 60 TIME
RANGE/MPG EQUIVALENT
TESLA MODEL S $49,900 6. 5 SECONDS 160 MILES/119 MPGE**
neurs would rather start a business moving
electrons around the Internet than within a car
motor. If launching a major new automobile
company is close to nuts—“probably the hardest
thing in the world,” as one auto analyst told me
recently—then launching a major new electric
automobile company is certifiable. You might
as well light a bonfire in downtown Palo Alto
and burn a billion dollars.
Tesla Motors almost certainly represents the
most extreme test of the limits and capabilities
of the Silicon Valley model of innovation. Musk’s
startup is built on a defiant and scrappy ethos,
and it intends to demonstrate that a product that
has long been the exclusive bailiwick of Detroit
engineers can be made smarter, faster, cheaper,
and more attractive by a bunch of guys in Cali-
fornia, Musk included, who don’t tuck in their
shirts. Of General Motors, Ford, and Chrysler,
Musk remarks, “I think the youngest of them is
90 years old.” The most common refrain he’s heard
over the years is that Tesla can’t possibly succeed
because nobody has succeeded in nearly a century.
Indeed, Tesla and Musk are frequently lumped
with the upstart Tucker Sedan (launched by Pres-
ton Tucker; bankrupt 1949) and the insurgent
DMC- 12 (launched by John DeLorean; bankrupt
1982). “If I had a dollar for every time someone
brought up Tucker or DeLorean,” Musk tells me,
“I wouldn’t have needed to do a bloody IPO.”
Did he know how difficult this would turn
out to be from the start, I ask?
“Yes.”
Was he surprised by how hard it actually was?
“No.”
After a pause, he adds, “When we got Tesla
going at the very beginning, if you asked me
what I thought the odds of success were, I would
have said less than 50%. I would have said that
failure is the most likely outcome.” But he would
not say that anymore.
Electric vehicles
NISSAN LEAF
CHEVROLET VOLT (H YBRID)
MITSUBISHI MIEV
FISKER KARMA (HYBRID)
$27,700
$31,645
$21,625
$95,900
10. 3 SECONDS
9 SECONDS
13. 4 SECONDS
6. 3 SECONDS
100 MILES/99 MPGE
35 MILES/94 MPGE
62 MILES/112 MPGE
50 MILES/52 MPGE
Luxury sedans
AUDI A7 $59,250 5. 4 SECONDS 18 CIT Y/28 HIGHWAY
CADILLAC CTS-V $64,515 3. 9 SECONDS 14 CIT Y/19 HIGHWAY
MERCEDES BENZ E350 $50,490 6. 5 SECONDS 20 CIT Y/30 HIGHWAY
JAGUAR XF SEDAN $53,000 5. 5 SECONDS 16 CIT Y/23 HIGHWAY
*PRICEAFTERFEDERALREBATE.**MILES-PER-GALLONEQUIVALENTFORTESLAROADSTER;TESLAHASYETTORELEASEMPGFORTHEMODELS,BUTIT’SLIKELYSIMILAR.
LEAF 0-TO- 60 TIME FROM CONSUMER REPORTS. MIEV 0-TO- 60 TIME FROM MOTOR TREND. NO MANUFAC TURER S TATS AVAILABLE.
To put it starkly, the future of Musk’s
company now hinges on the success of the Model
S. He has put all his chips on the table; his company has even suspended production of the Tesla
Roadster for several years to focus on the new
model. If the Model S has “hiccups,” the term
carmakers use to describe modest production
glitches, it could likely get past them. But if the
car has larger issues of performance, safety, or
durability, it gets more difficult to see how Tesla
could endure. Even with its alliances with other
automakers, the company could be hundreds
of millions of dollars in the hole. And Musk’s
public assurance of company profitability in
