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| Joined: | Mon Nov 21st, 2005 |
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The real challenges for Tesla – and the true test of Musk’s mettle – will come over the next three years, as it makes the risky transition from a niche producer of about 1,000 cars a year priced at $100,000 to a high-volume manufacturer of about 20 times that many cars, selling at half that price and destined for a much more crowded middle-premium market. The company’s main concern will not be breakthrough propulsion technology, but the more routinely brutal demands of the car business. From a quirky start-up whose growing pains were chronicled in excruciating detail, Tesla is taking a much bigger step into the public eye as a mass-market carmaker benefiting from a taxpayer-funded loan for closely watched new technology. The status may put new demands on the amount of transparency and accountability required of the company – and on the gravitas demanded of its straight-talking CEO. “Tesla’s not a private company any more if they’re taking public funds,” says Siry. “It’s a big leap,” Musk acknowledges in Knightsbridge. But “every company goes through transformations”.
Rival electric or plug-in cars produced by Renault/Nissan, Toyota, GM and other carmakers will have hit the road by 2011, when Tesla’s Model S saloon launches. The biggest question – and not just for Tesla – will be whether consumers with less money than the rich first-adopters are ready to buy. Like other carmakers, the company will need to persuade people that the higher price tag of a plug-in car will be recouped in the lower running costs of petrol-free driving. But Tesla’s saloon will also be competing against petrol-engined luxury cars of similar quality that cost about half as much. Daimler will be taking a seat on Tesla’s board, and helping it in areas like supply, production and vehicle engineering. Musk says that he still plans an IPO, “probably a couple of years from now”.