To read the diary, Tesla Motors: The company we SHOULD give Billions to, we should be giving government money to Tesla since they have just announced a beautiful all-electric vehicle with a 300 mile range for under $50000.
Except they haven't...
You'd thing that at least we'd want to read Tesla's press release carefully before we fork over our tax dollars. If we would have, we would have learned that the diarist missed some details:
The $50,000 version of the Tesla S6 has a 160 mile range, not 300. From the press release:
The anticipated base price of the Model S is $49,900 after a federal tax credit of $7,500. The company has not released options pricing. Three battery pack choices will offer a range of 160, 230 or 300 miles per charge.
So 160 miles is the standard offering-- that's what you get for $50k, and they aren't telling us how much more it will cost as an option to get 300 miles of range. I would suspect there is a reason they have not released prices for that optional range.
And wait... there was something else in that paragraph:
The anticipated base price of the Model S is $49,900 after a federal tax credit of $7,500. The company has not released options pricing. Three battery pack choices will offer a range of 160, 230 or 300 miles per charge.
Okay, so we really are ALREADY subsidizing Tesla with significant tax credits. To arrive at the $50,000 figure, they included the government subsidy-- a somewhat sleazy marketing angle at best. Ron Cogan at greencar.com says this:
So, color us confused. Is the base price $49,900 or $57,400? And when did incentives become factored in as part of a vehicle’s official base price?
Here’s why this is an issue. A ‘base price,’ or Manufacturer’s Suggested Retail Price (MSRP), universally identifies the price of a new vehicle model. Enormous effort goes into setting a vehicle’s base price to ensure that it returns a profit and is competitive in the marketplace. For this reason, auto manufacturers typically wait until the very last minute before a model goes on sale to announce its MSRP, which allows weighing the state of the market and the price of competitive models.
If incentives are offered, as is often the case in new car marketing, these incentives are applied to a purchase to lower the transaction cost to below the vehicle’s base price, or MSRP. It’s a proven way to spur vehicles sales. No auto manufacturer ever factors an incentive into a vehicle’s base price because incentives come and go, while a base price remains a constant until economic conditions or a changing market prompt an automaker to announce a change in MSRP.
To factor an official base price predicated upon a financial incentive is odd. To do so when that incentive is, in fact, a government subsidy, is just wrong and sets the stage for resentment.
http://www.greencar.com/...
So what Tesla has is a very nice looking $57,400 electric vehicle with a 160 mile range. And that's if they can produce it to meet whatever limited demand there will be for such a pricey vehicle with such a limited range-- rich car enthusiasts and the most dedicated rich environmentalists making up the bulk of the market, I'd guess.
I don't know about you, but I think that's $25,000 away from even being close to the answer for a person of average means struggling to get by in this tough economy. It's also about 200 miles of range away from being a car I'd want or most anybody else who likes to take road trips.
The Tesla's price and specs as an everyday driver frankly don't compare favorably to the Chevy Volt, and even the Volt is expected to be too expensive for most mainstream car buyers. Worse for Tesla, China is already producing a plugin-hybrid Toyota Corolla look-alike, the BYD F3DM, that has a 62 mile range on battery and a 360 mile range on gas that sells there for $22k, and they have announced plans to get it into the US market in 2011. Many other established makers, foreign and domestic, will be getting plug-in hybrids and electric vehicles onto the US market within 2-4 years, at price points far below the Tesla... and they will be eligible for tax credits too, except they won't fudge their base price like Tesla has done.
Finally, I would say this: Don't give up on Detroit just yet. Even if the big three all go thru some sort of pre-arranged bankruptcies, as seems to be the plan now, these companies have plug-in hybrids and electric vehicles in the pipeline. It is in our national interest to give these companies a chance if they show that they can help themselves and be competitive. I do not believe they are so far behind technologically that they are not viable. I do not believe that Detroit can't make cars that aren't as good a quality as our fine imports are. I don't think that the Detroit automakers can't make a profit after they emerge from bankruptcy. I drive a Chevy now and I'd like to be driving a plug-in hybrid Chevy 5 years from now.
Mabe one day Tesla will be in the mix too. But with all due respect to Tesla, I think there's a much better chance that our next generation of energy efficient, American designed-and-made cars for the middle class will be ones that are already on the drawing boards and the test tracks of Detroit. If Tesla can prove me wrong, more power to them, but they need to do so with private investment, not more money from the government.