Tesla Finally Unveiling Subsidized Model S

Tesla will show off its relatively affordable Model S today for the first time, and from a sneak peek, it looks almost as sleek as the company’s flagship Roadster.

Unlike Tesla’s sporty Roadster, though, the sedan will cost just $57,400. Throw in a $7,500 rebate from the government for electric car purchases and the price drops to $49,900, comparable with luxury cars like BMWs or Audis.

Tesla needs the Model S launch to be a success, because the company largely relies on taking deposits for both its cars for money at this point. If it can find customers that are impressed enough by the car, and not worried about Tesla’s spotty delivery record on the Roadster, there’ll be enough money to hold on until the Department of Energy, hopefully, approves its loan. The company expects the Department of Energy will loan it $350 million to build a factory in California to produce Model S cars.

The car that will be shown off today will just be a prototype which isn’t ready for mass consumption. According to the San Jose Mercury News, only the company’s engineers are allowed to drive the Model S. As the News, and others, point out, it’s a long way from a prototype to seeing a Model S on the road.

The spunky Silicon Valley startup has been bothered by a number of problems. Valleywag, the thorn constantly sticking in Tesla’s side, has reported a rumour that California governor Arnold Schwarzenegger wants to return his Roadster, as well as the fact that the company’s CEO is trying to track down employees that are leaking information–in particular, that it is extremely low on cash.

Rather than focus on leaks, Tesla needs to focus on ramping up its production and securing money. Earlier this month, Earth2Tech pointed out that the company was supposed to be producing 30 Roadsters a week by Spring, but that won’t happen until the end of summer. Earth2Tech also points out a bunch of other problems the company has:

  • Tesla says it will be able to sell components, but it’s only got one deal so far, selling 1,000 batteries to Diamler, who is also working on its own battery. That’s hardly a long-term, sustainable plan.
  • The Model S has hit a series of bumps on the way to production, and its $50,000 price tag is questionable. The Roadster was supposed to cost $92,000 but now costs $109,000 plus a $1,950 “destination charge” and possibly $9,300 more for previously standard features.
  • Tesla has 300 employees, and three showrooms in very posh areas, which are not cheap. While it’s not totally burning its cash, it’s not exactly playing it safe either.

Plus, the overarching problem with any electric car, is the fact that there is no national charging infrastructure for the cars.

But today’s Model S unveiling will provide a brief respite from the problems that dog the company, as they show off their newest handiwork. The company may have trouble running a business, but people sure like the look and feel of their cars.

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