• Apr 29th 2009 at 7:57PM
  • 62
Tesla Model S – Click above for high-res image gallery

Tesla Motors' charismatic frontman, Elon Musk, will be showing up on the Late Show with David Letterman tonight to dazzle America's TV audience with his gorgeous all-electric sedan. Tesla says that when the Model S goes on sale at an undefined point in the future, the cost for the base model will be just under $50,000 – $49,900 to be exact – after a $7,500 government tax break. Business Insider has a word for that: Horsefeathers.

BI teamed up with Mark Boyadjis, an auto analyst at iSuppli, and they did some math based on actual numbers used in the auto industry and a lot of educated guesses. The result? They didn't exactly find a lot of room for profit if the car sells for $57,400. Their math is based on at least one error – they say the replacement battery for the Roadster is $36,000, but that's a carry-over mistake from Edmunds – it's actually $30,000. Still, that's the equivalent to the base price of an entire "near luxury" sedan – one that conventional automakers have trouble making margins on. That big, sexy touchscreen? Estimated to cost $4,000. Add everything from chassis and body panel costs to in distribution, marketing, further engineering, and lest we forget – building a factory, and Musk's price target starts to look more and more implausible.

BI has a good point here – Tesla needs to be careful with their pricing predictions. The ambitious startup made big financial mistakes when pricing the original Roadster – which didn't make everyone happy – and there's not a lot of room left to goof up a second time.

[Source: Business Insider]

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    • 1 Second Ago
      • 6 Years Ago
      wow that touchscreen is 4k?
      bling bling.

      But im excited for the model S. REALLY EXCITED
      • 6 Years Ago
      Ok....so the car uses batteries that are not eco friendly. The touch screen is made-up of chemicals that are not eco friendly. The cost of the batteries out weighs the cost of the car. The date when the car is going going to be sold is unknown. There is no factory to build the car. At what point does this become a circus act with a guy in top hat luring me into a tent.
        • 6 Years Ago
        Hasn't it always been ?
        Most people who buy a Prius/Insight have no concept of how much pollution is created in the process of building the car. Let alone the consequences years from now when the batteries need replacing. It is all part of the hype. Just jump of the bandwagon with your eyes shut and don't ask questions.
        Don't get me wrong, hybrids certainly go a long way in reducing the amount of fuel we consume (provided people refrain from doing 90 in their Prius), but they are not without their flaws.
        (Ironic that the car who won the award for least waste produced during production is the Mercedes S class)
        Personally I would love to see this car make it into production; but something tells me that $49,900 is well baited hook (just think back to the roadster).
      • 6 Years Ago
      Hmmm ….. what are the owners in SOCAL going to do when there are rolling brown out’s or Black out’s? How are they going to charge up their Tesla’s, Fisker’s, or other Battery Pack vehicles. A battery pack doesn’t create energy, it’s a storage device!
      Also, the U.S. electrical grid is already overloaded and in need of drastic repair. What’s it going to look like when people get home from work and plug in their cars between 5-7pm? It won’t be pretty.
        • 6 Years Ago
        He's being sarcastic Ken. The internet just doesn't convey it well.
      • 6 Years Ago
      Has Tesla said whether they're doing a custom battery for the Model S or whether they're continuing with COTS notebook batteries as they used for the Roadster? If they do a custom battery they could probably bring the unit cost down considerably.
        • 6 Years Ago
        Tesla doesn't buy enough volume to cover the cost of designing a custom battery.

        Their best shot would be to let a bigger company design a battery and then buy a modified version of that.
      • 6 Years Ago
      It's impossible to compare the price of a startup electric to a mass produced internal combustion model. To compare horses, simply compare the total cost of materials and the number of parts. Logic says electrics will cost more initially, but due to far fewer parts, less maintenance and "free as the wind" fuel, blow ICE models out of the water in due course. Bring it on.
      • 6 Years Ago
      It will be profitable when you count the 400 million dollars in loans they're working for.

      I want electric cars to succeed, but it's plain to see that the federal loan is the only reason they're parading around this car. They dummied up the "concept" and set a nice-sounding price point, just so they can look more viable for the loan. Elon wants to get his investment out, and he can only get bought out if that loan comes in (that loan is actually probably the only way the company can survive).

      They're actually pretty smart, getting on TV right now. They're trying to give Obama a way to put some positive spin on the GM and Chryco bankruptcies. They're hoping he'll give them money to say "Look! There's viability in the American car industry after all!". I don't so much mind the loans going to a better place than GM and Chryco, but I just hate that Tesla is so obviously scamming the system...
      • 6 Years Ago
      I don't expect the Tesla, at launch, to meet it's anounced price. This is normal for any technological endeavour, marketing sugarcoating price and all that.

      It will still sell like hotcakes at 80k $, and I expect it to be less than that, unless the dollar tanks even more.

      What is happening here is the people who are being paid by the petrochemical wing of the current oligarchy are trying to bury a technology and a competitor which they don't, yet, control. A few shills in the media and you get a lot of negative press. You never get negative press for sponsors in this messed up biased and honourless world.

      And as has been mentioned, 4000$ for the touchscreen? Is that counting the computer behind it and the unit cost of all the viehicle's software? The screen itself is probably a lot less than 200$ unit cost in bulk. The battery packs will also come down in price, providing competition in this sector is maintained so technology can be developed. The battery really is key, as this is where the parasites will try and drive up the total cost of ownership of these otherwise elegant transport solutions.

      Capitalism sickens me. So much stupid math preventing people from just doing what is right.
        • 6 Years Ago
        So telling the truth about companies is shilling? Would reprinting misleading press releases be a better thing?
        • 6 Years Ago
        Where I live, apartment complexes typically have car ports or detached garages. Getting 15KW (Tesla wants 220V, 70A) of power into each stall is a HUGE issue. It would require running 220 to the garages (which they don't have right now), and each stall would require a dedicated run and circuit. Additionally, since they are detached and the electric costs will be VERY high, they require installation of individual meters for each stall.

        This is not at all trivial to do.

        Additionally there is the problem that your landlord is not required to put in electric power in your garage. And them not doing so is not even grounds for breaking your lease. So if they say no, you are just stuck.

        I have no idea how you think long-range EVs are going to get cheap soon. Batteries are very expensive and prices are not going to drop off a cliff soon, LIons are not new technology, they have been around for over 10 years. And the EV business doesn't even expand the market for LIons all that much, as so many are used in portable phones and music players right now.

        LIon progress will be continual and continue to be slow. It is unrealistic to think that a 200+ mile pack for a family car is going to cost under $25,000 soon. So how are EVs to become cheap?
        • 6 Years Ago
        People want reasonable total cost of ownership cars with decent range. Electrics will be better than gasoline or diesel for this, within a few years. Yes, they do have their issues now, but they are not as big as the pro oil crowd make them. Apartment complexes generally have garages, electrifying them is no big deal. Inner city folks without garages will have to use charging points, when available. Untill then electric is not for them I guess, can't be everything for everyone.

        This is not specifically about Tesla, it's about the technology. Tesla is a corporation, and corporations tend to go horribly wrong over time, and fall into monopoly behaviour and develop fascist tendancies. I am not in love with any corporation. As a start up tesla just seems to have a decent shot at making this work.

        But I would be just as happy converting most cars to run on ethanol 100 being made by independent farmers. Anything not feeding the tyranny is good for me, there is a political and social dimension which is defined by the technological situation.

        Break artificial scarcity of energy with an environmentally friendly method and you're automatically my friend...
        • 6 Years Ago
        Oh yes, it's the big oil conspiracy... right.
        • 6 Years Ago
        "Capitalism sickens me. So much stupid math preventing people from just doing what is right. "

        That's the problem - what is right? We've debated this since the beginning of mankind, yet nobody has come up with a credible solution.

        Sure we can build a gazillion-mile electric car that costs $10. We just don't have the technology to do so yet.
        • 6 Years Ago
        Well, starting up in the modern auto industry isn't cheap, as it's a oligopoly maintained by pretty hefty regulamentation. If they get the funding they'll make it, if they don't they won't, I can agree with that. But it's no different than any other startup, the money has to come from somewhere.

        It might take them the better part of a decade to make money, or they may never make it... but untill it all pans out I think they have a decent shot. They are making something people want to buy, as the orders for the S showed. This isn't a mainstream automaker, to get that many orders means something.

        And let's remember that whatever happens, the current market is shaped by the credit rug being pulled out from under everyone's feet by an engineered financial crisis, so it's hardly a fair and free market out there.

        I say best of luck to them and hope they make it. I would rather see GM go under than Tesla, at least in this scenario the industry is reshaping itself into something closer to what the buyers want.

        My 5c
        • 6 Years Ago
        After 8 years of Bush rule, after nearly 15 years of internet spreading information freely, after so many examples of suppression of technology, after so many patents being shelved... how the hell can you doubt a big oil conspiracy? Or even have a pavlovian response negating conspiracy a priori?

        This only happens because you, and most people, have been conditioned to (not) think this way.

        And thus the status quo trundles on, smashing the bones of humanity as black smoke blows out it's billions of exaust pipes.
        • 6 Years Ago
        Tesla has a decent shot? I don't agree. They were founded in 2004, and have lost money every year since then. They are nowhere near being profitable. The Roadster is still losing money on every car they ship, and that does not include recovering the cost of engineering.

        Now they are looking to spend hundreds of millions of dollars on the Model S, which won't bring in revenue for at least 2 more years. Their projections on cost and delivery have been off in the past, and production of the Roadster is far simpler than the Model S. So it is safe to say that the Model S will be late as well, and over budget.

        Tesla will go under within two years unless they receive significant additional funding.
        • 6 Years Ago
        Musk's day job is firing off rockets which have far more toxic (and voluminous) exhaust than a gas far. Although thankfully there are far fewer of them than cars. I'm not sure Musk's motivation is ecology.

        I do agree with your argument that iSuppli is often full of crap. They did a breakdown of a product I knew the actual cost on and they were FAR FAR off. Their BS estimate caused a huge s***storm and it disgusted me.

        I guess I was more speaking in the general. Not questioning Tesla is much more easy to interpret as shilling than trying to refute or confirm their statements based upon independent data. That was my point. I guess it falls a little flat in this case if you see iSuppli doing dumb-dumb things like finding the ratio between this screen size and the iPhone screen size and then just multiplying their estimate of the iPhone screen cost by that.

        Musk is taking a .com tack with Tesla. They're losing money, lots of it and hoping somehow it will turn around with more customers. Larger companies like GM/Mercedes/VW/Ford/etc. have to make a product people want. And unfortunately for you, people don't want what you want them to want. People want affordable, long-range cars that they can use even if they live in an apartment. Tesla cannot meet these needs, but larger companies who are in this for the money and not just as a hobby have to meet them. This is why the EV1 is gone. This is why you see half-steps like the Prius and (hopefully) the Volt.

        There is plenty of room to critique Tesla's business model and numbers. Defending them on every point just because you like their goals doesn't make sense to me.
        • 6 Years Ago
        "I consider electrifying a garage space a trivial matter, you seem to think it's a major technological and financial endeavour."

        It costs money (probably $500-$1000 per space), and given the small market for electric cars, there simply won't be the demand to justify it. The owner of a 50 unit apartment building would never make back the investment.

        Electric cars are city cars, and it is quite a paradox that cities are the places where it will be most difficult to plug one in.
        • 6 Years Ago


        Capitalism...the one institution that has raised living standards and brought more people OUT of poverty and tryannical control than any other system on Earth...is to blame?

        I suppose your solution is communism? Because we all know that will save the earth.
        At least place your blame in a suitable direction. No system is perfect yet the free market will find a solution better than any other - assuming that solution currently exists or is not being hampered by the government- someone on the planet will find the solution EVENTUALLY.
        No system will give you the eden you seem to think you will reach through electric cars, although I too beleive that fossil fuel cars should be fazed out eventually....and just think, we should be the ones who start the trend...oh wait....that makes money too....I guess it may not be such a good idea.
        People are the problem, not one specific "capitalistic" group pf them.
        • 6 Years Ago
        One, no truth is being told here, just another hit piece based on assmatics, ie, the mathmatics the author took out of his posterior.

        Two, no, missleading press releases don't help much either, but I am quicker to forgive an ecocompany in the middle of a process of creation stretching the truth a bit than I am to a guy who is outside the process spouting negativity, which supports an industry that is destroying the environment, financing war and basically monopolising energy.
        • 6 Years Ago

        "I've been soundly beaten by logic and can't form a rebuttal to that point so I'll shrug it off" isn't exactly a common debate club tactic. I guess it was inevitable as RZ is clearly full of crap.
      • 6 Years Ago
      Let's take a look at what they did wrong. A: the battery. Actually that's all they did wrong. They're using the base model cost of $50k and using the premium battery cost to do their math. The base battery is a smaller unit than in the Roadster with only a hundred or so miles to it per charge. This battery will undoubtedly be cheaper than the high performance 250 mile battery in the roadster and 300 mile battery touted as the high end Model S battery. I'd guess this battery would cost closer to $15k than $30k. The power-electronics systems should be cheaper to because it won't have to handle as much current at any given time to accelerate the car in under 6 seconds compared to the roadster in under 4.
        • 6 Years Ago
        Yeah but the Model S doesn't have anywhere near equivalent acceleration rates...?
        BTW the standard Roadster goes from 0 to 60 in 3.9 seconds - if my math is correct that still (fractionally) puts it under 4 seconds.
        Thanks for replying though, I appreciate it!
      • 6 Years Ago
      Profitable or not....Damn that thing is sexy!
      • 6 Years Ago
      1. I hope it is not going to run under microsoft whatever

      2. even if it is 100k there are plenty of rich people on the world willing to buy just for fun, and for beginning that is enough to create profit and growth

      3. how much lithium is on the planet ? = how many batteries (cars) can be produced ?
      • 6 Years Ago
      The touch display is red herring. Read the article. They don't know if that will even make production.

      The Tesla Newsletter specs price of the current 53KWh battery at $30K, not $36K.

      So 40KWh/53KWh *30k = $22K in todays price for the model S battery.

      57K-22K = 35K.

      You can't build a sedan for 35K without an ICE/transmission?? I think that is easily doable.

      • 6 Years Ago
      Tesla is not using the battery from the roadster. My guess is that they will be installing the Eestor ultracapacitor that costs much less and has better performance. That is how Tesla is able to make the Model S cheaper and have better performance than the roadster. Check out Eestor on google.
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