Electric Car Pioneer Tesla Aims for Broader Market

Electric Car Pioneer Tesla Aims for Broader Market

The Silicon Valley-based company's ambitions are to move into lower price ranges and expand its market.

For well-heeled early adopters of electric-car technology, Tesla has been the car of choice. The 2,373-pound, two-seat Roadster accelerates from 0 to 60 mph in 3.9 seconds, can reach a top speed of 125 mph (electronically limited) and offers a range of 236 miles. Such supercar performance does not come cheap -- a base Roadster costs $101,500 after a federal tax credit.

Since 2006, Tesla has sold more than 1,000 Roadsters and estimates they have traveled 3 million miles. The Silicon Valley-based company's ambitions are to move into lower price ranges and expand its market. The next step in its evolution will be the Model S, a four-door premium sedan that it is positioning as an electric alternative to a BMW or Audi. Tesla plans to go into production of the Model S and start deliveries in early 2012.

Helping the company to manufacture the car is a $465 million loan from the U.S. Department of Energy through the Advanced Technology Vehicle Manufacturing Program. Tesla plans to use $100 million for a powertrain manufacturing plant that is expected to be built in California and employ about 1,000 workers. The rest of the money will be devoted to production engineering and assembly of the Model S.

Tesla sells cars in the United States and Europe and entered the Japanese car market in April. Ricardo Reyes, Tesla's vice president of communications, said that is an important step because Japanese consumers are both technology and car enthusiasts. Tesla also is pursuing supply contracts with other car manufacturers. Tesla already has agreements to provide battery packs for Daimler's electric Smart cars in Europe, and for an electric truck Freightliner Custom Chassis is introducing in 2011. "If they want to electrify their fleet or produce an electric vehicle, we can provide them with the battery pack or the propulsion system," says Ricardo. "We want more cars to go electric and if that takes us working with other manufacturers, we're happy to do that."

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