The real reason that Roadster development cost so much more than can be accounted for by typical entrepreneurial hubris is that we essentially had to spend the development money twice. After Eberhard was asked to step down from the CEO role two years ago, almost every major system on the car, including the body, HVAC, motor, power electronics, transmission and battery pack, had to be redesigned, retooled or switched to a new supplier.

Avoiding the cost of shipping a half ton pack from Asia also meant significant savings on shipping costs. This is a much bigger deal for a heavy and bulky product than a small consumer electronics device, where outsourcing to Asia makes a lot more sense. Very importantly, our supply chain went from a tectonically slow six months and having to pay for tens of millions of dollars of inventory in transit to a matter of a few weeks.