Thursday, March 22, 2012

Test Driving the Tesla Business Model

By Joel Blake
Menlo Oak Staff


Beamer, Benz, or Bentley? That’s the question the modern luxury car buyer asks when he or she is in the market for a new car.
The Tesla  Model S (front) and Roadster (back).
Californians all too accustomed to an elite standard of automobile. With gas prices rising and a job rates declining, these West Coast drivers are also trying to avoid the pump, and find alternative means of transportation. In the Atherton-Menlo Park area, these alternatives are easy to spot--Caltrain is just down the street, Samtrans bus stops line El Camino. But if you take a walk just a little bit further you will find Tesla Motors.
            Tesla Motors was founded in 2003 by a group of Silicon Valley entrepreneurs. From its Palo Alto-based headquarters, the company has expanded to 21 store locations worldwide. The company’s success has been powered by electricity; creating cars that lessen the global dependency on petroleum-based transportation and instead run completely on electricity.
         When visiting the Palo Alto Store, the first person you may speak to is Manager Neil Joseph.
        “Tesla is leading the way in sustainable transportation,” Joseph said.  We are making compelling electric cars that are usable in the real world, and they perform better than their gasoline counterparts.  This is helping create a new industry, and charging infrastructure that will produce thousands of jobs.”
            “Public transit is minimal because of the vast size of our country, its important to try and make personal transportation as efficient as possible,” Joseph added.
            “Since Tesla makes compelling electric cars, it also creates a brand that is highly iconic like Apple.  We are changing the way people interact with a car company and helping make a brand that is as iconic as the classics,” Joseph continued.  He added that all of Tesla’s services and repairs are all done at the dealership and customer relations are a major part of Tesla’s operations.
            Currently Tesla offers a line of three vehicles. The Roadster, a two door sports coupe. The Model X, its SUV vehicle; and its newest release, the Model S, which is a sporty sedan. These cars statistically outperform the competition, and offer an eco-friendly solution to one of the world’s biggest problems, carbon emissions. The federal government is providing a half a billion-dollar loan to Tesla, and the new Model S should be available in late 2012 with a price tag of $57,400. Wholesale all models are being offered under $130,000.
A Car and Driver magazine  review stated  that, “The Roadster proved that Tesla could deliver an electric. But that’s a tin toy compared with the Model S.”
Journalist Kim Reynolds of MotorTrend.com said, “When reviewing the Model S outside of Tesla’s Fremont factory, I had one solitary thought: this is it.”
 In addition to offering its own line of cars, Tesla helps other car manufacturers in developing electric powertrains.
            If successful, Joseph said, how Tesla could help improve the American economy.
“We’re going to make transport, energy production, and consumption as efficient and sustainable as possible, aiding in a eco-friendly environment.”   

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