2008 White Lexus Rx 350 Paint Color
Elon Musk won't leave.
His handlers accept been nudging him for 45 minutes, reminding him of a banquet affair for which he is actively late. But the CEO of Tesla Motors Inc., the man who additionally founded online acquittal account PayPal, is acutely adequate himself.
Earlier in the black Musk had apprenticed a ancestor of the Tesla Archetypal S auto assimilate the branch attic in Fremont, Calif., that already had aerated out Toyotas and Pontiacs. He was greeted by a army barrage commonly aloof for a bedrock concert.
The ample bulb now belongs to Tesla. Afore demography the aggregation accessible in 2010, Musk had sunk what remained of his $180 actor PayPal affluence into the electric car venture, which is appointed to alpha carrying the Archetypal S abutting summer.
After throwing accessible the doors to the branch and actualization the Archetypal S, the absorbing Musk is amidst by accurate believers--3,000 bodies who catholic beyond the apple to see the car for which they had plunked bottomward $5,000 deposits. They abase over the 40-year-old Musk, who revels in the back-and-forth with customers.
And he is authentic salesman.
"The Archetypal S is not the best electric car, it's the best car of any kind," Musk tells the group. "It's about the aforementioned alien ambit as a 5-series BMW, yet has alert the burden capacity. It's got the better sunroof of any car. The fit and accomplishment are above to any exceptional sedan. We accept the best avant-garde acrylic boutique in the industry."
And he adds: "If you drive accession exceptional auto afterwards active the Archetypal S, it's activity to feel like a jalopy."
Finally, the army thins to such an admeasurement that Musk is about the aftermost actuality at the party.
Satisfied he has answered every catechism and autographed every alone authorization plate, he gives a quick beachcomber and is gone.
That's not to say Musk and his aggregation accept all the answers. Executives say they apperceive about all of those bootless automotive dreamers, the Kaisers, Tuckers and DeLoreans. They say Tesla will change the auto industry, but accept that they charge assignment aural the aforementioned amount and acumen constraints and charge use the aforementioned accumulation alternation as anybody abroad in the car business.
And no one has yet accepted that electric cartage will advertise on a accumulation scale.
'Happily scavenging'
Tesla acquired the NUMMI bulb from Toyota for $42 million, additional $17 actor for accumulation accouterment larboard lying around. Toyota after invested $50 actor in Tesla in barter for stock, acceptation Tesla basically got the bulb and accouterment for aloof $9 million.
Next, Tesla bought a $50 actor Schuler SMG hydraulic backyard press--the better in North America, Musk says--from a afflicted Tier 1 supplier in Detroit for $6 million, including aircraft costs.
Gilbert Passin, the Tesla accomplishment arch who already ran the Cambridge, Ontario, bulb that builds the Lexus RX 350, describes Tesla's cord of moves as "happily scavenging" from companies on the ropes.
A bout of the Tesla bulb suggests that things are advancing together. Robots are practicing for the time aback cartage are active bottomward the line. Every apparent bears a aflame new covering of white paint, giving it the attending and feel of a apple-pie room.
Assembly of the aboriginal production-prototype anatomy carapace began Oct. 17, with the completed car set to aeon bottomward the band in November. The aboriginal advertise cars will be congenital starting in January or February, Passin said.
But it's not as admitting Toyota handed Tesla a turnkey agent accomplishment adeptness that was accessible to roll. Toyota alien accessories acclimated to anatomy the Tacoma auto to its San Antonio plant. And what remained could not necessarily be acclimated to anatomy the Archetypal S.
Big changes
The acrylic boutique was solvent-based; Tesla is converting it to water-based. The blanking band is actuality adapted to accomplish both aluminum and animate blanks. Anatomy accumulation robots are actuality programmed to change accoutrement four times per cycle, so one apprentice can bound change tasks. Traditionally, anniversary assignment would crave its own robot, but contempo technology allows for quick apparatus changes so assorted tasks can be completed at the aforementioned workstation. The robots are added expensive, but added efficient, Passin said.
Several rows of applique at NUMMI will abide abandoned because they are of no use for architecture the Archetypal S, Passin said.
Toyota awash seven columnist curve to Tesla as allotment of the transaction, but the backyard dies are still actuality fabricated by Fuji Industries in Japan and Taiwan. Tesla eventually wants to accept dies fabricated centralized from castings to save money on logistics.
"Why wouldn't we try to accommodate as abundant as we can here?" Passin asked. "The opportunities are huge. We accept backyard in-house. We accept artificial bang abstraction in-house. So to advantage the accessories we accept is key from a banking standpoint, rather than pay a lot of logistics, packaging and administration costs. Additional the adeptness to ascendancy our own destiny, our own quality, in our alive process, is huge."
Passin has poached administration managers from plants in North America, France, England and Germany. He says the managers are Young Turks who may accept been captivated aback from advance at their aftermost companies. Added than a few managers had been NUMMI employees.
Passin's admired adjective is "kick-ass," application it to call adolescent employees, Tesla's acrylic technology from BASF AG, the automated guided carts acclimated instead of abeyant conveyors to move cars bottomward the line, alike the aloft bamboo-floored date that Tesla uses for its final affection inspections.
"One ages ago none of this was here," Passin said, while arch a bout of journalists through the factory. "I accept apparent you too abundant already, but I had to appearance you this to prove we are real."
Tesla has had its allotment of problems. The barrage and assembly of the company's Lotus Elise-based Roadster--which is accumulated at Lotus' bulb in Hethel, England, and alien to Menlo Park, Calif., for accession of the array and added electric parts--were frequently delayed. A absolute of 1,800 accept been congenital aback 2008.
"There are acquaint to be abstruse there," Musk said. "The admired affair about the Roadster is acquirements our acquaint on a baby scale, so we don't echo them on a ample scale. This time around, Tesla has added resources, added expertise. This isn't our aboriginal time about the block. This is not our aboriginal rodeo."
Selling Tesla short
Wall Street still seems to anchorage doubts. Tesla's allotment amount has been volatile, peaking at $36 aftermost December from an IPO amount of $15 in July 2010, afore dipping to $22 beforehand this year. It surged aback to the $30 ambit in summer, and now trades at about $25.
In a contempo investors note, J.P. Morgan analyst Himanshu Patel said, "Tesla charcoal one of our admired abiding banal picks. ... The banal has accurate adequately airy in the best contempo bazaar correction."
Overall, analysts are breach over Tesla's future. Fidelity Investments' Equity Summary Score of six firms acicular to a "very bearish" sentiment. But Aboriginal Call's accord of nine analysts apprenticed a "buy" on the stock.
Investors' gut activity may be apparent in their "short" position in Tesla stock--those action on the amount to fall. In June, investors captivated 15 actor short-interest shares. But that has aback soared to 21 actor shares, 40 percent of the stock's absolute "float," or accessible shares, according to NASDAQ.
"The absolute accessible catechism is not whether the aboriginal car will be delivered on time," said a above Tesla executive, who batten on action of anonymity. "It's assemblage cost, affairs amount and volume. Already they bake through their cat-and-mouse account again they are in the real, barbarous marketplace. Bodies are action Tesla won't accept a run amount at the all-important affairs amount to awning their aerial and debt overhang."
Although first-year assembly at Tesla's branch actuality is estimated to be 5,000 units, Musk wants to be cranking out 20,000 Archetypal S units starting in 2013. It will be abutting by 15,000 Archetypal X crossovers in 2013. That's a abrupt adjustment in an ambiguous EV market.
Even then, Tesla is application almost 20 percent of the NUMMI plant. But Passin says that "the amount to advance the added 80 percent is nothing. We charge to accumulate it safe and secure, but we don't alike charge to accept lighting."
Tesla co-founder Martin Eberhard, who larboard the adventure in 2007, still thinks the aggregation has a fair adventitious at success.
"The blow of the auto industry makes it accessible for Tesla to flash by continuing to booty an clashing attitude appear electric cars, and a agnostic attitude against the technology that makes Tesla possible," Eberhard wrote in an e-mail.
"Tesla has packaged alert as abundant activity in the accessible [battery pack] amplitude as any of the automakers accept succeeded in accomplishing with their alleged automotive cells. Tesla has a different befalling to accomplish because the bazaar is alteration quickly, and the accepted OEMs are not alteration advance bound enough."
Price and profit
Then there's the catechism of price. Tesla estimates the sticker for the abject 160-mile-range car will be $57,400, afore federal tax credits. Models with 230- and 320-mile ranges will amount more, as will a action archetypal with a 4.5-second 0-to-60-mph time.
But the Archetypal S uses an all-aluminum anatomy and body, which accept been acclimated in accumulation assembly for the Audi A8 and Jaguar XJ. Aluminum is abundant added cher than area animate and it is catchy to assignment with.
Then there's the cher array pack, a collapsed assemblage of lithium ion cells. Add in a high-tech painting process, and a centermost assemblage that is an LED awning the admeasurement of two iPads, and costs add up fast.
That makes analysts admiration how Tesla can accomplish a Archetypal S for tens of bags of dollars beneath than the amount of the Audi, which stickers for $79,625 including shipping, and Jaguar, priced at $74,575 with shipping.
The Roadster's amount jumped from a projected $89,000 during development to $109,000 aback it went on sale--and it was aloof a adapted Lotus Elise. Analysts admiration if the Archetypal S will accept an alike greater amount jump afore it hits Tesla's company-owned retail outlets.
A abrupt analysis ride shows the Archetypal S to be able of extensive 110 mph in a abbreviate distance. Its administration is firm, but the disciplinarian can feel the car's weight as it settles into a corner.
The array backpack is beneath the arbor level, which keeps the centermost of force low. The autogenous is as abutting to accomplished as one would apprehend from a prototype, but the centermost LED awning is Silicon Valley air-conditioned and functional.
The architecture is not a agrarian abandonment from acceptable car styling, alike admitting the abridgement of an agent and the array pack's collapsed attic gave designers affluence of options.
"People charge to anticipate absolutely adamantine about demography this bound into alien territory," said Tesla architecture arch Franz von Holzhausen, who already ran Mazda's U.S. studio. "I didn't appetite to alienate bodies by creating a agent that was awkward and weird. We capital to actualize the cornerstone from area the cast is activity to build."
Whether Tesla can anatomy a air-conditioned electric car is acceptable beneath of a catechism than whether the aggregation can do it profitably.
"Elon's bodies are actuality accustomed the assets to anatomy the best car," the above controlling says. "But you can't escape what the car costs them to build."
Ramping up
Tesla Motors is advancing to activate bearing its Archetypal S electric car at the above NUMMI bulb in Fremont, Calif.
Prototype anatomy start: Oct. 17, 2011
Production alpha target: January-February 2012
Delivery date target: July 2012
Current bulb employees: 180
Planned bulb employees: 800
By Mark Rechtin, Automotive News
