Menu
Jeff Goldblum Stars in funny GE Link Ad

Jeff Goldblum Stars in funny GE Link Ad

iPhone 6c is possible as iPhone 5c Sales Surge

iPhone 6c is possible as iPhone 5c Sales Surge

Pee-Wee Herman stars in New TV on the Radio Video

Pee-Wee Herman stars in New TV on the Radio Video

Windows 10 Preview Download Release is Today

Windows 10 Preview Download Release is Today

William Shatner and Leonard Nemoy to Star in New Volkswagen e-Golf Commercial

William Shatner and Leonard Nemoy to Star in New Volkswagen e-Golf Commercial

Tesla Finishes One West-To-East Route

Jan 25 2014, 7:25am CST | by , in News | Cars & Vehicles

Tesla Finishes One West-To-East Route
 
 

YouTube Videos Comments

Full Story

Tesla Finishes One West-To-East Route

It may not go down in history like the driving of the “golden spike” that completed the transcontinental railroad in May of 1869. But Tesla nevertheless finished an important cross-country route of its own this week: In activating the Supercharger located in Hagerstown, Md. the company has now made it possible to drive a Model S sedan from coast-to-coast, all the while recharging at high speeds. As the map shows, though, the route is hardly ideal — you can’t head east from Los Angeles through Texas to Atlanta nor can you go from San Francisco to Denver without detouring south and then far north again — but CEO Elon Musk’s planned cross country trip with his family seems ready for launch.

In a way, the convoluted path mirrors Tesla’s next big west-to-east transition as the company is poised to begin selling its vehicles in China. Just days after announcing aggressive pricing there, Tesla won an important victory over a trademark squatter who had temporarily made it impossible for the company to call its cars “Te Si La” (the name the company sought to use there). With that resolved, Veronica Wu, the company’s vice president in China, told ReutersTesla is ready to press ahead with aggressive plans for the country; it’s looking to open as many as 12 stores by the end of 2014. Tesla currently has just one outlet located in Beijing.

In discussing sales goals, though, Wu provided insight into Tesla’s forecasts for 2014 ahead of the company’s earnings. She said the company aimed to double sales in 2014, a target the company has now tossed around a couple of times since first mentioning it at the Detroit Auto Show earlier in January. But Wu went further to add that 30-35% of the incremental growth was expected to come from China. With total 2013 sales at roughly 22,500 (final numbers won’t be official until the earnings report), that suggests Tesla hopes to sell nearly 8,000 cars in China in the first year there alone out of 45,000 overall. While that may seem like a lot, Chinese auto sales already dwarf those in the U.S., with around 21 million last year against just 15.6 million here.

And while living standards overall in China haven’t yet reached U.S. levels, there was much fanfare last October over an A.T. Kearney report that 2% of the wealthiest Chinese are now buying 1/3 of the world’s luxury goods. With Tesla’s aggressive pricing, high performance and reputation for cutting-edge technology, the idea that the Chinese market will absorb that many Model S sedans next year doesn’t seem completely out of bounds. That said, it won’t be easy either.

U.S. sales have been buoyed by the fast-growing Supercharger network. While a recent picture on the Tesla Motors Club forums shows that usage can be quite low outside of holidays, the idea that you can take your Tesla nearly anywhere is clearly an enticing value proposition. Tesla hopes to build a similar network in China, but it’s unlikely to be able to achieve anywhere near the 70+ chargers-in-one-year rate of construction it has achieved in the U.S. In the meantime, the U.S. network appears slated for massive expansion in the coming year, with at least a doubling of locations before 2014 is done. Given that chargers have been coming online seemingly every other day, even the skeptics are being won over that Tesla will achieve its goal.

Tesla’s 2014 will have a bit of yin and yang. On the one hand, more attention will be paid to the basics of lowering the cost of production of existing vehicles while ramping production. Musk had talked repeatedly of reaching an 800-units-per-week rate at the factory by year end, which I recently extrapolated out to a goal of 35,000 sales. With clarity the company is looking for much more, Tesla will have to hit that rate by mid-year — and cost effectively, too. This, plus the continued Supercharger rollout and the expansion of the dealer networks in Europe and China are the down to earth part of the business.

But there is also the in the clouds part. By year end, the Model X SUV is due for its first deliveries and in the background, the company is designing the third-generation, inexpensive sedan that it hopes to deliver for $35,000 by what now appears to be 2017. Tesla is expected to announce a site for a giant battery factory to power those sedans sometime soon. With the company’s stock valuation priced for a big future, it will serve Musk and Tesla well if both of those forces act together to please everyone in Tesla’s orbit. There is a possibility the company will seek additional capital for the battery factory and/or future product development. If worldwide adoption of increasingly profitable vehicles is happening in the meantime, it should be easier to obtain that capital at favorable terms.

In the meantime, Musk should remember he had hoped to take his cross-country trip before 2013 ended. While he reconsidered in part due to it being a lousy time of year to drive across the nation’s heartland, it’s also true the Superchargers weren’t quite ready. Even today, the 175-mile stretch between Macedonia, Ohio and Somerset, Pa. might be a bit dicey on a cold day with the heat turned up high which might be why Tesla didn’t make put out a press release about the route being done. (A charger in Cranberry, Pa. is coming soon that will split that stretch in half.) Similarly, the 206 miles from Barstow, Ca. to Kingman, Ariz. could be a nailbiter until the option to drive though Las Vegas is available.

But a Tesla owner with time to kill could leave tomorrow and likely go from ocean to ocean without being stranded, so long as they watched their battery gauge on those few tenuous stretches. And because the charging is free, they would make up in money what they lost in time recharging for 20 minutes or more each time they made a stop on the journey of well over 3000 miles. It’s a long trip, but then many never thought Tesla would get this far either.

Follow me on Twitter and on FacebookFind the rest of my Forbes posts here.

Source: Forbes

 

Updates


Sponsored Update


Advertisement


More From the Web

Shopping Deals

 
 
 

<a href="/latest_stories/all/all/31" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

 

Comments

blog comments powered by Disqus

Latest stories

Jackie Chan might be coming to your TV Screens for Rush Hour
Jackie Chan might be coming to your TV Screens for Rush Hour
Brett Ratner is in talks with Warner’s TV division to turn the Rush Hour series into a TV show. Bill Lawrence will be the runner for the show and we can anticipate a hearty good cop time on the show. The question is whether Jackie Chan and Chris Tucker will be reprising their roles as Lee and Carter on the TV show?
 
 
New iPad Air 2 Comes in Gold
New iPad Air 2 Comes in Gold
Bloomberg reports that Apple will introduce a gold iPad Air 2 to match the iPhone 6 colors.
 
 
Neil Patrick Harris reveals Details about his Wedding
Neil Patrick Harris reveals Details about his Wedding
Neil Patrick Harris told all regarding the details of his same-sex wedding with David Burtka.
 
 
Jared Leto is Now an Investor in Reddit
Jared Leto is Now an Investor in Reddit
Reddit raised a $50 million round of investment, besides several Silicon valley types two names stick out. Actor and singer Jared Leto and rapper Snoop Dogg.