Tesla’s beautiful Model S is just a “glorified golf cart” right now writes the LA Times in a story that digs beneath the facade of Tesla’s futuristic sedan, to reveal the car is still very far from being ready for primetime.
This lovely, porpoise-sleek design study, unveiled to worldwide hoopla March 26, is just barely ambulatory — more like a glorified golf cart than a harbinger of tomorrow tech. The windows are fixed in their frames. The power-steering motor groans. The seating position and outward visibility make a Lamborghini feel spacious. The car’s signature design flourish — a 17-inch, touch-screen control panel with haptic feedback in the centre console — may not even make it to production, concedes Tesla designer Franz von Holzhausen. “The car is only about 90% there on the outside and about 40% there on the inside.”
If the car is so far from production, it makes us wonder how Tesla arrives at its estimated sticker price of $57,400 for the sedan. We set out to figure out what it might cost to build one.
Mark Boyadjis, auto analyst at iSuppli, estimates that the large touch screen–that might get cut from the car, according to the LA Times–would cost $4,000.
We are told by an auto industry source that high-end automakers such as Maserati typically allow 28% of their revenue for distribution, which is paid to dealers and importers. If Tesla is as efficient as Maserati, 28% of $57,400 goes to its stores and marketing and sales costs. So that’s $16,000 right there.
We’re at $20,000 in cost now.
Now for some more technical mathy section, where a source who’d prefer to be nameless helps us out.
The 160-mile, low-end battery is 42 kWh battery storage system. Tesla plans on using battery technology from the Roadster for the Model S. Musk says those batteries cost $36,000 today. The Roadster battery is 53 kWh. So $36,000/53 kWh = $680/kWh. Now multiply that by 42 kWh and the battery for the Model S looks like it will cost $28,528.
Now, we’re at $48,528 in cost. Subtract it from $57,400 and we’re left with $8,872 to pay for the rest of the car and turn a profit.
This isn’t a company that likes to pay it cheap either. The LA Times said, the body will be “aluminium or steel or a combination, but the Model S will have lightweight aluminium body panels. Tesla expects to make its own “hard tooling,” which are expensive stamping molds for the body panels.“
Throw in the cost of a chassis, seats, dashboard, power steering, you know, all the guts that makes up a car and its pretty tough to reconcile how this car will be profitable at $57,400 as Musk insists.
What could Tesla say to defend itself?
Its battery costs will come down. Maybe in the long run, but this isn’t just about technology. It’s about the actual packs themselves, which we’re told are quite fixed in price, and quite expensive.
Tesla might say the marketing costs aren’t that high. Again, tough to fathom, as the company plans on opening retail locations to sell its cars, rather than going through dealerships. This adds another cost. Below on the left is a picture of a Chicago location (via AutoBlogGreen) that will become Tesla’s retail shop. On the right is its Los Angeles location. Is it going to be cheap to get the Chicago location to look like the Los Angeles location? We doubt it.
In spite of the car just being a “far-from-real fibreglass prototype” as the LA Times puts it, Tesla, and its inimitable CEO, Elon Musk, are on a full-fledged publicity tour to hype it up. Tonight, Musk will grace the Ed Sullivan Theatre to chat with David Letterman–a car geek, and a Roadster owner–about the Model S.
The full court press is part of a larger strategy to get the public, and by extension, the DOE on board with Tesla’s plan. In doing so, the company could secure a loan from the government and stay in business.
We don’t expect Letterman reads this blog, but if he does, we’d love to hear him ask Musk to explain how the Model S will be sold for $57,400 and be profitable.
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