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Customers will need to pay more for their reserved Tesla Roadster or lose the vehicle

The sexy and all-electric Tesla Roadster was the poster child for the green car movement when first announced. This was despite the fact that the electric sports car was far outside the realm of affordability for the masses.

The struggling Tesla Motors has put its foot in another pothole on the road to green car salvation by raising the price of many of the options on its vehicle. The problem is that an unknown number of Tesla reservation holders have received letters and phone calls telling them that the deposits of up to $50,000 placed for their new electric sports cars would no longer hold their rides for them.

The problem is that the buyers who had placed deposits were told that they would need to pay more for the vehicles that they had already ordered and optioned to their liking. The price of a Roadster with the standard feature set has been increased by $6,700.

The cost of the High Performance Charger that allows owners to recharge the batteries in the Roadster in as little as 3.5-hours was increased in price to $3,000 according to Autoblog. The previously stock set of alloy wheels is now a $2,300 upgrade.

Tesla is reported to claim that the price increases on the options are needed for the company to become profitable faster. This is despite the fact that these owners had previously been told that their order was accepted and that their cars were locked for production.

There is no word on price increases for the new Tesla Roadster Sport that was recently announced.

Updated 1/21/2009

Tesla contacted DailyTech to provide an official statement on the price increase we reported yesterday.

Tesla announced a $40 million financing round in November and is not running out of cash. Rather, it is increasing options prices for at least 350 customers who have not yet taken delivery of 2008 model-year vehicles in order to improve margins on each car delivered. Healthy margins make the company more attractive to the next round of investors -- whether they're venture capitalists, shareholders or the federal government in the form of low-interest loans -- and thereby help ensure the long-term viability of the company.

Tesla is fortunate and rare among automakers today in that it has sold out its production run through October. Waiting to increase options pricing would have resulted in many months of lower margins. Fortunately, many of Tesla's early customers understand this and have been very outspoken in their support for this difficult but necessary decision. No one at Tesla made this decision lightly, and we provided customers in-depth data so they could understand why Tesla did it. Ultimately it will help keep the company viable for decades to come so we can keep longstanding customers happy and greatly expand the number of vehicles we sell.

Tesla announced a $40 million financing round in November and is not running out of cash. Rather, it is increasing options prices for at least 350 customers who have not yet taken delivery of 2008 model-year vehicles in order to improve margins on each car delivered. Healthy margins make the company more attractive to the next round of investors -- whether they're venture capitalists, shareholders or the federal government in the form of low-interest loans -- and thereby help ensure the long-term viability of the company.

Tesla is fortunate and rare among automakers today in that it has sold out its production run through October. Waiting to increase options pricing would have resulted in many months of lower margins. Fortunately, many of Tesla's early customers understand this and have been very outspoken in their support for this difficult but necessary decision. No one at Tesla made this decision lightly, and we provided customers in-depth data so they could understand why Tesla did it. Ultimately it will help keep the company viable for decades to come so we can keep longstanding customers happy and greatly expand the number of vehicles we sell.



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RE: Ah, the classic case of...
By mvpx02 on 1/20/2009 1:20:07 PM , Rating: 4
The planet is dying? The Tesla Roadster isn't "saving the planet" any faster than a Ferrari.


RE: Ah, the classic case of...
By quiksilvr on 1/20/2009 1:38:55 PM , Rating: 4
Though I agree the Tesla Roadster isn't "saving the planet", they have had PLENTY of opportunities to do so. They easily could have started with a 4 door sedan with a 300 mile range for $50,000. Instead they make some sport car that didn't sell well due to its insane price point, fired 90% of their workforce, and are now asking Congress for $350,000,000...idiots...


RE: Ah, the classic case of...
By othercents on 1/20/2009 2:33:38 PM , Rating: 4
quote:
They easily could have started with a 4 door sedan with a 300 mile range for $50,000.

Are you sure? My understanding is that building a 4 door sedan at that price range and still be profitable would require the ability to mass produce a large number of them. Since they neither had the facilities to mass produce the vehicle nor did they have the funding to build the facilities the next best option was the build a small number of higher end vehicles to build up capital.

Granted the economic turn of events has changed their position to need help to build the 4 door sedan which has included layoffs, increased pricing, and the need to beg the government for hand outs. However this still might have been the outcome even if they were producing a 4 door sedan. I haven't seen a car company not cut back in some way or another in the past year.

Other


RE: Ah, the classic case of...
By Solandri on 1/20/2009 3:42:57 PM , Rating: 1
Since they aren't selling anything yet, how could the economic downturn have negatively affected their ability to bring a product to market? If anything it has made it easier for them as higher unemployment has caused the cost of labor to drop, and suppliers for the Big 3 automakers are probably desperate to sell parts to them at discount prices.


RE: Ah, the classic case of...
By monomer on 1/20/2009 4:08:30 PM , Rating: 2
Solandri, Tesla delivered something like 100 Roadsters in 2008.


RE: Ah, the classic case of...
By Reclaimer77 on 1/20/09, Rating: -1
RE: Ah, the classic case of...
By Viditor on 1/20/2009 6:08:14 PM , Rating: 5
It's outrageously expensive to set up a large scale assembly line for a car (in the $billions). Tesla's plan (which was a very good one at the time) was to produce 100 of them and float an IPO for capital to build the line.
Unfortunately, the economy went south in the middle of that plan so that IPOs are not a good idea now...


RE: Ah, the classic case of...
By Solandri on 1/20/2009 8:16:22 PM , Rating: 1
I see. They weren't planning to grow the business with increasing sales, they were betting on an IPO to raise the funds needed to jump start at a higher level of unit sales. Risky, but might've worked in the era of loose credit. Thanks for the clarification.


By foolsgambit11 on 1/20/2009 7:57:34 PM , Rating: 2
And thus we return to the fact that Tesla couldn't manage mass production (at least, not for the foreseeable future). They went for the 'safest' business model for releasing a boutique electric car (or any boutique car, for that matter). Go sporty.


RE: Ah, the classic case of...
By William Gaatjes on 1/21/2009 4:06:22 PM , Rating: 2
Most sports cars are not mass produced, that's why they are so expensive. 100 is not a small number in those circles. If sports cars would be mass produced they are not exclusive anymore. And sometimes there is some revolutionary technology used as with porsche but even still. 100 is pretty average.


RE: Ah, the classic case of...
By Spuke on 1/21/2009 4:29:36 PM , Rating: 2
100 is not average. Even Lamborghini sells more cars than that. Ferrari sold more Enzo's than that. 100 is most definitely extremely low volume and definitely not average.


RE: Ah, the classic case of...
By CyborgTMT on 1/21/2009 8:32:41 PM , Rating: 3
Actually they are doing pretty good. Even though all Enzo's are listed as being produced in 2003, they were actually built between 2002 and 2005 giving Ferrari 3 years to build 400 of them. Tesla has produced 100 cars in a 9 month span. That is the exact same production rate as Ferrari - 133 cars per year.


RE: Ah, the classic case of...
By FITCamaro on 1/22/2009 7:02:16 AM , Rating: 2
They make more than the Enzo.


RE: Ah, the classic case of...
By Spuke on 1/22/2009 12:35:39 PM , Rating: 2
quote:
That is the exact same production rate as Ferrari - 133 cars per year.
Where do you get your numbers from? Ferrari made 122 cars in December alone. 1600 total for 2008.


RE: Ah, the classic case of...
By Drexial on 1/20/2009 3:00:39 PM , Rating: 2
Its your most notable cars that get attention. Chevy is recognized for its Corvette, not its cobalt. More people know Ferrari for the Enzo then the 355. So Tesla wanted to start at the top to get notoriety and to build capital to move on to a car for everyone.

It clearly isn't the cost of the car that has prevented them from selling car, considering they have 4 times as many people waiting for one as they have made. They started building them just before the costs of most of their materials went up. It also seems like they cant keep up with demand. (its starting to sound like Motorex)


RE: Ah, the classic case of...
By Reclaimer77 on 1/20/2009 3:24:31 PM , Rating: 2
Ferrari's, and to a lesser extent, Corvettes built their image and mistique on a racing background.

The Tesla is never going to have that kind of brand recognition going for it. It's always going to be the Elise with batteries.


RE: Ah, the classic case of...
By PrinceGaz on 1/21/2009 8:08:25 PM , Rating: 2
On Top Gear, the old Tesla Roadster (with the economy rather than performance tyres) managed a 1:27.2 round the track in "mildly-moist" conditions. Given that the Lotus Elise Sport 190 only managed a 1:28.2 under "dry" conditions, that makes the Roadster look very favourable.

Okay so the Roadster didn't have as good a handling around corners as the Elise due to the additional battery weight, but the sheer power and torque it could deliver whilst accelerating on straights, combined with the regenerative braking before corners which helped compensate for the extra weight and therefore kinetic-energy the discs would have to handle, made up for it.

It might only manage fifty or sixty miles around the test track when the Stig goes mad with it power-sliding around corners, such that the battery is dead in under an hour, but for the majority of people who want to commute to work in a high-performance non-locally-polluting car, it is a fantastic choice that can do between a hundred and two hundred miles on a full charge. Combined with an overnight charge from a nuclear power station, you can have a blast on the way to and from work, and still contribute a lot less to global-warming than Prius drivers.

An Elise with batteries? Yep, I'd take one, as it faster than the Elise on petrol (gasoline).


RE: Ah, the classic case of...
By Spuke on 1/22/2009 12:44:02 PM , Rating: 2
quote:
An Elise with batteries? Yep, I'd take one, as it faster than the Elise on petrol (gasoline).
Which is slower than a Chevy Cobalt SS.


RE: Ah, the classic case of...
By PrinceGaz on 1/22/2009 7:24:02 PM , Rating: 2
What do you mean by faster? Top Speed- which will only be of any use on a race-circuit, or Acceleration- which can be used every day.

Lets see:

Top Speed:

Tesla Roadster (any model): 125mph (electronically limited)
Chevrolet Cobalt SS (supercharged): 158mph (also electronically limited, but is the fastest model)

0-60mph Time:

Tesla Roadster: 3.9s (standard), 3.7s (2009 Sport)
Chevrolet Cobalt SS: 5.5s (the fastest version, the turbocharged model for this stat). I'm not going to include the supercharged version using the optional nitrous as that is not really fair.

Quarter-mile drag time:

Tesla Roadster: 12.8s (104.7mph final speed) (model used not stated, but was done in 2008)
Chevrolet Cobalt SS: 13.9s (102.5mph final speed) (turbocharged model, the fastest for the quarter mile)

So unless you normally drive at well over 70-80mph, I would say the Tesla Roadster is a good bit faster than all but the Chevy Cobalt SS being fed nitrous.

Even the 60-103mph times between them are close, with the Cobalt SS only having a slight advantage (these are estimated from the 0-60, and the quarter mile drag times which both passed the line at around 103-104mph)

Tesla Roadster: 8.8s (est)
Chevy Cobalt SS: 8.5s (est)

Based on those stats of the Tesla Roadster vs the best Chevy Cobalt SS (without nitrous), I'd say the Roadster is a good bit faster on all but a very fast track. The two cars would probably be very close after a half-mile drag-race with finishing speeds around the 120mph region, but you don't often have those on public roads.


RE: Ah, the classic case of...
By PrinceGaz on 1/22/2009 7:41:41 PM , Rating: 2
Oh, one other important point: the Roadster is rear-wheel drive whilst the Cobalt SS is front-wheel drive. Even if the Cobalt SS was using nitrous to massively boost its power; it would be pointless as you cannot transfer that sort of power to the road in a front-wheel drive car except at very high speeds. Using nitrous to boost its power to (guessing here) 400hp or so would just cause the front wheels to spin and burn rubber more than anything else.

Above about 100mph, the nitrous would certainly help increase performance, but on public-roads, it will only help you to outrun the police who are certain to be chasing you by then.


RE: Ah, the classic case of...
By Spuke on 1/23/2009 7:17:35 PM , Rating: 2
My mistake, I'm still thinking about the Car and Driver Lightning Lap.


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