Tesla previews three new models
In a presentation to prospective investors ahead of its IPO, Tesla previewed three new vehicles it plans to build on the forthcoming Model S platform.
In a presentation to prospective investors ahead of its IPO, Tesla previewed three new vehicles it plans to build on the forthcoming Model S platform. CEO Elon Musk said Tesla intends to build three body styles on the chassis -- a convertible, a crossover, and a van -- in addition to the Model S sedan.
"Each one of these cars is going to be frickin' bad ass," said Musk.
He said Tesla's aim is to exceed the build quality of Lexus, which is generally regarded as one of the best in the luxury segment. Musk said design and material quality are essential to attracting customers. "Every nuance of this car has to be perfect," he said.
Musk also spoke about the competitive advantages of Tesla's business structure. While virtually all automakers rely on franchised dealers to sell their cars, Tesla will own and operate its stores. Musk says franchised dealers create a "fundamental economic inefficiency" because dealers attempt to profit from service and repairs, while automakers struggle to police warranty spending. He said franchising is a "one way street ... once you've franchised, you can't go back."
In addition to reduced costs, operating company-owned stores will allow Tesla to control the customer experience. Musk said most consumers find the car buying process to be one of the worst retail experiences they encounter. "It's something on par with going to the dentist," joked Musk. Tesla wants to "make the car ownership experience as pleasant as possible," he added. The company will have stores in the top 50 metropolitan areas in the world at the time the Model S launches, he said.
Speaking about the upcoming Model S, Musk said Tesla wants to make the car the most desirable luxury sedan in the segment. He said unique features, like the touchscreen center console, will help set it apart.
"It's literally like having a MacBook Pro embedded in your center console," he said. The car will feature 4G cellular internet access, enabling occupants to browse web and have email read aloud using text-to-speech software. Musk said Tesla will allow third-party software developers write apps for the center console, similar to the apps available for Apple and Android cell phones.
"This is mind blowing for the car business, but par for the course for Silicon Valley," said Musk. "There will not be anyone who brings technology faster to market than Tesla. We don't have to go through seven committees to get something to market."
CFO Deepak Ahuja, who also spoke at the event, assured investors Tesla can reach profitability at fairly low volume. While Tesla expects to build 20,000 Model S units per year, the company will cross the break-even mark at the 10,000 units.