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Tesla To Offer An Affordable Car By 2015

Mar 31 2014, 2:11pm CDT | by

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Tesla To Offer An Affordable Car By 2015
 
 

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Tesla To Offer An Affordable Car By 2015

According to a story from the LA Times at the end of last year, Tesla will launch an affordable car by 2015. But will an affordable high-end electric car bring in a range of new customers?

Currently, Tesla’s cheapest car is the Model S, which retails at around $70,000 in the US and £50,000 in the UK. But the manufacturer thinks it can bring the price down for a new model as it looks to ramp up production.

By affordable Tesla means in the region of $40,000 (£24,000), which is slightly over the average car price in the US, but still within the ball-park. Tesla has been open about wanting to expand its range and appeal to more customers and this reported cheaper car is a first step.

Tom Cheesewright, futurologist and BBC talking head, explained to me how he’d like to see Tesla challenging more in the affordable market: “On sales of $2bn last year Tesla lost around $75m. If the model is sound, then scale is the answer. The question is how much Tesla needs to be the brand on the bonnet. Does it scale by building its own vehicles or by licensing its drive train technology as it already has to Daimler and Toyota?

“I’d certainly prefer to see the company challenging directly in the market. If it can use a lower-priced vehicle to show a broader range of consumers the cost and driving advantages of well-designed all-electric vehicles, it will be doing the market, and the planet, a favour.”

Can a cheaper electric car entice the UK consumer?

Dan Powell from honestjohn.co.uk, a car advice website, certainly thinks that a cheap but high-end electric car will be popular with UK drivers:

Electric cars are becoming increasingly common, with BMW, Mercedes-Benz, Mitsubishi and Volvo all set to add the technology to their cars in 2014. The news that Tesla is launching a new and affordable model will be welcomed by many, but we cannot help but question why it has taken an electrical pioneer so long to offer a car with mainstream appeal.

 “Indeed, the race to produce affordable electric cars is heating up and Tesla will need to utilise all of its technological knowhow to ensure its affordable EV is up to the task. However, if its current crop is anything to go by, we expect the new Tesla to be every bit as capable. What’s more, with a £5000 grant from the Government, the new Tesla could be a lot more affordable than people think.”

Despite 1,149 new registrations under the government’s £5000 electric car scheme, which is the highest since the scheme was introduced in 2011, some believe that the UK isn’t properly equipped for an influx of electric vehicles. Richard McCann, a member of the Guild of Motoring Writers, explained:

“Well, it might sell well in California but the UK buyer is showing understandable resistance to EVs, preferring the more user-friendly hybrids.

 “Yes, the £11m the government has thrown at EVs by way of subsidies has persuaded some buyers to take a punt but factors such as high price, uncertain resale values, inconvenience of plugging the thing in, recharge time and limited range are hard for most of us to ignore.

 “But if you’re brave enough and wealthy enough to take a risk on an EV would you invest in something you trust, such as a Nissan, or something from a niche maker such as Tesla?

 “Will EVs save the planet? There’s no sign of it so far – where does that electricity come from after all – power stations. That’s why the government is phasing out the subsidy, so EVs will become even more expensive. Eight hours to recharge doesn’t compare well with the splash-and-dash required by a conventional car. And the range goes down massively as cold weather affects the batteries. Not a problem in LA maybe but not so good in Leeds.

 “There’s a handful of EVs currently on the road, but if more people switch we’ll need more power stations to cope with the demand for recharging electricity. And get real, running a power extension cable out of your kitchen window and across the pavement to the car at night will never work. Until there are sockets in residential streets the petrol station at the end of the road will always win out.”

Source: Forbes

 

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<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.

 

 

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