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Tag: tesla

  • Tesla posts 70 percent rise in quarterly deliveries, backs 2016 target

    Tesla posts 70 percent rise in quarterly deliveries, backs 2016 target

    Tesla Motors Inc said on Sunday its third-quarter deliveries rose 70 percent to 24,500 cars, following production improvements, cheaper lease deals and reports of discounts on some vehicles.

    Deliveries are a key metric of performance for the luxury electric vehicle manufacturer, which had missed these targets in the previous two quarters.

    The improved deliveries for the third quarter bring Tesla closer to meeting its second-half 2016 target of 50,000 vehicles, which it reiterated on Sunday. It said in a statement that fourth-quarter deliveries would be “at or slightly above” the third quarter’s.

    However, the third-quarter figures included 5,150 vehicles in transit at the end of the second quarter, as Tesla reported in July. Another 5,500 cars in transit would be counted in the fourth quarter, it said.

    Meeting the third-quarter target was a priority for the money-losing Silicon Valley carmaker, which is hoping to raise funds from the equity market later this year for multiple efforts, including building out its factory for the Model 3 mass-market sedan due in late 2017 and the planned acquisition of SolarCity Corp (SCTY.O).

    Tesla experienced production problems earlier this year and began to resolve them in June. It said in July that production would improve from 2,000 cars a week to 2,200 in the third quarter and 2,400 in the fourth.

    Production rose in the third quarter to 25,185 vehicles, implying just shy of 2,000 vehicles per week.

    The company will release third-quarter financial results in early November.

    Chief Financial Officer Jason Wheeler said in August that if second-half production and delivery targets are met, the company had a “great chance of being non-GAAP profitable,” without specifying a time period.

    In September, Tesla began advertising its inventory cars, for showrooms or test drives, “at favorable prices and ready for expedited delivery.”

    Some analysts expressed concern that discounts, reported extensively on online Tesla forums, would undermine margins.

    Last week, Chief Executive Officer Elon Musk published a memo telling employees to follow the company’s policy of not offering discounts on new cars.

    Musk was responding to a research note published on Tuesday by Pacific Crest Securities analyst Brad Erickson criticizing Tesla for offering discounts on Model S inventory cars, not those built-to-order for specific customers, to boost third-quarter sales.

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  • LeEco India ready to roll out 1000 stores

    LeEco India ready to roll out 1000 stores

    Chinese tech firm LeEco India plans to open 1000 outlets across the subcontinent by the end of this year.

    Expecting half of its revenue in India to come from physical stores, LeEco filed an application five months ago with the Foreign Investment Promotion Board (FIPB) to open single-brand retail stores.

    These will be a mix of company-owned stores as well as franchise outlets, says LeEco India COO for smart electronics business Atul Jain. “This is in line with our aim to be among top three brands in the country by 2018.”

    LeEco, which also has an offline presence in China, has not revealed the cost of setting up the stores. However, it will be spending nearly US$10 million on marketing in the three months starting October.

    Already the company has tied up with multiple distributors across organised and unorganised channels in India and is already available in about 3000 outlets in cities including Bengaluru, Chennai, Delhi, Mumbai, Pune and Varanasi. It expects to reach 65 cities and have a presence in 6000 to 8000 outlets by December.

    No longer exclusive

    Launched exclusively on Flipkart, LeEco’s products will now be available on other eCommerce marketplaces such as Amazon India and Snapdeal. Flipkart has contributed nearly 75 per cent of LeEco’s sales in India.

    LeEco has invested Rs.50 crore (US$500 million) in setting up a smartphone assembly plant in the Greater Noida area, in partnership with Compal Electronics. The factory has an initial capacity of 60,000 units a month but this will be ramped up to 200,000 by the end of December.

    By the second half of next year, the company plans to start exporting products to Hong Kong, Indonesia, Malaysia, Russia and Singapore, says Jain. LeEco sold more than 70,000 phones and 2000 televisions last month alone.

    Other plans include a partnership with Hungama to offer music services from next month.
    Founded by billionaire Jia Yueting in 2004, LeEco positions itself as the Apple, Netflix and Tesla of China. Apart from smartphones and online content, the company sells TVs, electric vehicles and virtual-reality headsets.

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  • Tesla’s Musk says new Autopilot likely would have prevented death

    Tesla’s Musk says new Autopilot likely would have prevented death

    Tesla Motors Co Chief Executive Elon Musk said on Sunday the automaker was updating its semi-autonomous driving system Autopilot with new limits on hands-off driving and other improvements that likely would have prevented a fatality in May.

    Musk said the update, which will be available within a week or two through an “over-the-air” software update, would rely foremost on radar to give Tesla’s electric luxury cars a better sense of what is around them and when to brake.

    New restrictions of Autopilot 8.0 are a nod to widespread concerns that the system lulled users into a false sense of security through its “hands-off” driving capability. The updated system now will temporarily prevent drivers from using the system if they do not respond to audible warnings to take back control of the car.

    “We’re making much more effective use of radar,” Musk told journalists on a phone call. “It will be a dramatic improvement in the safety of the system done entirely through software.”

    Tesla’s Autopilot, introduced in October, has been the focus of intense scrutiny since it was revealed in July that a Tesla Model S driver, Joshua Brown, was killed while using the technology in a May 7 collision with a truck in Florida.

    The National Highway Traffic Safety Administration (NHTSA) has been investigating Tesla’s Autopilot system since June because of the fatal accident. The agency had been briefed on the changes by Tesla and would review them, spokesman Bryan Thomas said. He declined to offer an update on the Tesla investigation.

    Musk said it was “very likely” the improved Autopilot would have prevented the death of Brown, whose car sped into the trailer of a truck crossing a highway, but he cautioned that the update “doesn’t mean perfect safety.”

    “PROBABILITY OF SAFETY”

    “Perfect safety is really an impossible goal,” Musk said. “It’s about improving the probability of safety. There won’t ever be zero fatalities, there won’t ever be zero injuries.”

    One of the main challenges of using cameras and radars for a braking system is how to prevent so-called false positives, in which a car might think an overhead highway sign, for example, was an obstacle to be avoided.

    Using radar and fleet learning, rather than relying primarily on cameras, would solve that problem, Musk said.

    “Anything metallic or dense, the radar system we’re confident will be able to detect that and initiate a braking event,” he said.

    Silicon Valley-based Tesla is known for its innovation in luxury electric vehicles but some critics, including rival carmakers, have said it was hasty in rolling out Autopilot. Tesla stood by Autopilot after the fatality.

    The revised system will sound warnings if drivers take their hands off the wheel for more than a minute at speeds above 45 miles per hour (72 kph) when there is no vehicle ahead, Musk said.

    The warning will sound after the driver’s hands are off the wheel for more than three minutes when the Tesla is following another car at speeds above 45 mph. The dashboard also will flash a pulsing light.

    If the driver ignores three audible warnings in an hour, the system will temporarily shut off until it is parked, Musk said.

    Advanced Autopilot users, rather than new users, were most likely to ignore warnings to put their hands back on the wheel, Musk said.

    Besides the fallout from the fatality, Musk has had to prepare for the Model 3 mass-market vehicle due late next year and completion of its Nevada battery factory, while trying to sell skeptical investors on the merits of a proposed acquisition of SolarCity.

    On Sept. 1, SpaceX, where Musk serves as CEO, sustained what he later called “the most difficult and complex failure” in the commercial space company’s history when a Falcon 9 rocket exploded on its launch pad in Cape Canaveral, Florida.

    “One of the worst weeks ever, really,” he told reporters.

    Musk said he had wanted to improve Autopilot’s capabilities last year but was told it was impossible to do so without incurring more “false positives,” such as a car braking suddenly for a harmless tin can.

    In July tweeted publicly that he was encouraged by talks with supplier Bosch about improvements to radar.

    “I wish we could have done it earlier,” he said on Sunday. “The perfect is the enemy of the good.”

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  • Tesla opens website for online reservations in Korea

    Tesla opens website for online reservations in Korea

    Tesla Motors has begun taking online reservations in Korea for its electric cars, Model S, Model X, and Model 3, the company said Friday.

    With a deposit of 2 million won ($1,800) for the Model S, 5 million won for Model X and 1 million won for model 3, customers can make a reservation, it said in the first statement released for Korean press.

    “Korean customers have already shown a great interest in Tesla through reservations for Model 3,” it said. The model 3 is a Tesla electric vehicle that will be available starting at $35,000 in 2017.

    Test drives of the Model S in Korea will be available at its retail stores and events at the end of this year, the US carmaker said, without naming the location of stores. The model X will be showcased at the beginning of 2017, it added.

  • Tesla may open first dealership in Korea

    Tesla may open first dealership in Korea

    Tesla Motors, the Silicon Valley-grown electric vehicle manufacturer, may open its first Korea dealership in a Shinsegae Group shopping complex within this year.

    “The talks are positive, for sure, but the final confirmation has yet to be reached,” said a Shinsegae Group spokesperson.

    “If the final confirmation is made, Shinsegae Property, which is pursuing the deal with Tesla, will give us notice,” he added.

    According to industry sources Thursday, if negotiations succeed, Tesla will open its first Korean dealership in Shinsegae’s Starfield Hanam shopping complex in Gyeonggi as early as November. The complex is a 30-minute drive from Seoul’s Gangnam District.

    Tesla CEO Elon Musk also confirmed Seoul as one of his next targets along with Taipei and Mexico City for the company’s high-end electric vehicles.

    “We are also accelerating store openings and plan to add a new retail location every four days on average during the remainder of Q3 and through Q4,” said Musk in an earnings report distributed Wednesday.

    “We are adding stores in new population-dense markets like Taipei, Seoul, and Mexico City, while also adding stores in our most mature markets like California,” he added.

    Scheduled to open early next month, Starfield Hanam is Shinsegae Group Vice Chairman Chung Yong-jin’s ambitious project to make a retail complex that includes not only shopping venues but all sorts of entertainment- and leisure-related facilities such as a waterpark, cinema and aquarium. Korea doesn’t have such a complex.

    In addition to offering some 750 retail brands, the complex will also house Asia’s first BMW dealership that handles both the original BMW and Mini vehicles. Luxury motorcycle brand Harley Davidson will have a store that displays not only vehicles but also its clothes and accessories lines.

    Since last December, Tesla has been gearing up to enter Korea by registering the corporate name Tesla Korea Limited and sending out job advertisements for car dealers and mechanics.

    Korea’s retail giants have been sending out feelers to the prestige car company, counting on its attractiveness to the general public.
    Lotte World Mall in Jamsil District, eastern Seoul was considered a candidate to house a Tesla shop, but the negotiation fell apart early this year.

    Opening an independent dealership in Gangnam District was raised as another possible choice and Tesla is still reported to be considering that option.

    Tesla is known for a unique way of directly operating and managing its branches, instead of franchising dealerships as most carmakers do.

    Its first New York showroom, which Musk located in the funky Red Hook neighborhood of Brooklyn earlier this year, symbolizes the concept. It shows that a Tesla shop is not exclusively for car shoppers but is open to anyone interested in futuristic car technology. That also explains why many Tesla dealerships are in U.S. shopping malls.

    “The quality of our new locations is also improving as many shopping malls now consider us the new standard for an anchor tenant based on the amount of foot traffic that we draw and our very high revenue per square foot,” said Musk in the earnings report released Wednesday.

    If Shinsegae’s negotiations with Tesla succeed, its shop in Starfield Hanam will operate as a display until the Korean government allows the luxury electric vehicles on Korean roads

    In the meantime, Tesla’s second quarter earnings announced on Wednesday fell short of analysts’ expectations. It posted a $293 million net loss in the second quarter, a more than 60 percent drop compared to last year’s Q2 operating loss of $184 million.

     

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  • Tesla in talks for store in Korea’s biggest mall

    Tesla in talks for store in Korea’s biggest mall

    Tesla Motors Inc. is in talks to open its first store in what will be South Korea’s biggest mall, according to the shopping complex’s owner Shinsegae Group.

    The two parties are negotiating over an outlet at Starfield Hanam, which is set to be the country’s largest mall when it opens in September, according to Shinsegae Group. Built jointly by Shinsegae Group and Taubman Asia, the four-story complex occupies an area the equivalent of 70 football fields and is located about six miles east of Seoul.

    Premium automakers including BMW are opening showrooms in retail districts to attract walk-in customers who wouldn’t otherwise visit car dealerships. Shinsegae Group owns Shinsegae Co. and E-MART Inc. and is South Korea’s second-largest retail conglomerate, behind Lotte Group.

    Atsuko Doi, a spokeswoman for Tesla in Tokyo, didn’t immediately reply to an email request for comment. Tesla said last month it plans to set up an office in Seoul, without giving further details. The U.S. electric vehicle maker advertised positions in sales, engineering, service and marketing in Seoul on its website. South Korea would be Tesla’s fourth market in Asia after China, Hong Kong and Japan.

    Separately, Hyundai Motor Co. said in an email that it will open its first premium Genesis brand store in the Starfield mall later this year.

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  • BMW to develop driverless car technology with Intel, Mobileye

    BMW to develop driverless car technology with Intel, Mobileye

    BMW is teaming up with Intel and Mobileye to develop new technology for the auto industry that could put self-driving cars on the road by around 2021.

    The alliance highlights a shift in the dynamics of research and development in the car industry, which until recently saw automakers largely dictating terms for suppliers to manufacture their proprietary technologies at specified volumes and prices.

    Now carmakers are increasingly striking up partnerships with technology firms using open technology standards, seeking to harness their expertise in areas including machine learning and mapping as they race against Silicon Valley companies such as Google, Tesla and Apple to develop driverless vehicles.

    “Highly autonomous cars and everything they connect to will require powerful and reliable electronic brains to make them smart enough to navigate traffic and avoid accidents,” Intel Chief Executive Brian Krzanich said on Friday at a joint news conference announcing the alliance.

    The three companies said their new platform would be made available to multiple carmakers and they expected vehicles with highly and fully-automated driving would be brought into mass production by 2021. It is too early to say which other carmakers would join the alliance, BMW Chief Executive Harald Krueger said at a news conference on the outskirts of Munich on Friday.

    Sophisticated cruise control systems already enable “hands off” driving as cameras and computers allow cars to automatically brake, steer and accelerate in traffic at low speeds. But drivers are required to stay in control.

    Now BMW, Intel and Mobileye will develop cars with even higher levels of automation described as “eyes off,” “mind off,” and “driver off”. This requires much more computing power and software know-how, forcing traditional carmakers to collaborate more closely with technology specialists.

    Both industries see huge revenue opportunities in the market for autonomous vehicles, although it is unclear how many drivers will be prepared to relinquish control and how quickly laws will be put in place to allow fully autonomous vehicles on the roads.

    But creating common technology standards would help all manufacturers update their vehicles faster, Intel Chief Executive Brian Krzanich said. “That will be critical for advancing the safety aspects of this.”

    A common approach to standards will also make it easier for regulators to understand and approve the roadworthiness of a vehicle while still leaving enough scope for individual car manufacturers to customize their cars, Mobileye Chairman Amnon Shashua said.

    Beyond technological hurdles there are legal questions over who is responsible when a crash occurs. On Thursday, the driver of a Tesla Model S car, operating in Autopilot mode, was killed in a collision with a truck in the United States, prompting an investigation by federal highway safety regulators.

    When asked about the crash, BMW CEO Harald Krueger said: “The accident is very sad …. We believe today the technologies are not ready for series production,” he added, explaining the alliance had not forecast that until 2021.

    “For the BMW group, safety comes first,” he said.

    As part of the new alliance, Intel, the world’s largest computer chip maker which has been looking to expand into the automotive electronics market, will supply the microprocessors – or central processing units – to control an array of sensors.

    Auto camera and software maker Mobileye will supply its Road Experience Management (REM) technology and make its latest EyeQ5 chip available to be deployed on Intel computing platforms.

    The three companies said they would demonstrate their technology in a prototype in the near future.

  • Tesla Motors introduces two less costly Model S versions

    Tesla Motors introduces two less costly Model S versions

    Electric carmaker Tesla Motors Inc said on Thursday it would offer two slightly lower-priced versions of its electric Model S sedan, starting at $66,000 in the U.S. market.

    The current Model S starts around $76,000 and is often delivered to customers at a price of about $100,000.

    Prices are before tax incentives are applied.

    The new versions, the rear-wheel drive Model S 60 and the all-wheel drive Model S 60D, will have slightly less range than the Model S already sold. The Model S 60D starts at $71,000 in the U.S. market.

    The newer models will have a range of more than 200 miles, Tesla said in a statement.

    The Model S 60 and Model S 60D will be sold with a battery pack with a capacity of 75 kilowatt-hours, but will be limited to a capacity of 60 kWh. Tesla said owners will have the option to get a software upgrade to allow the car to have a capacity of 75 kWh and the longer range it provides.

    Analyst Joseph Spak of RBC Capital said the upgrade option will cost $8,500 at purchase or $9,000 after purchase.

    A 60 kWh battery has an estimated range of 218 miles for the rear-wheel drive Model S 60 and 210 miles for the Model S 60D, Tesla’a website shows.

    The upgrade to the 75 kWh battery pack will add about 40 miles of range to each model.

    Tesla in 2012 offered a 60 kWh Model S version priced starting about $70,000 but it was discontinued last year. Tesla says the two newer Model S versions offer more capabilities than the discontinued one.

    Tesla has said it will produce between 80,000 and 90,000 electric cars in 2016 and that it can make 500,000 by 2018. Most of those are expected to be Model S cars. In the first quarter, Tesla produced 14,820 vehicles, of which 12,851 were Model S and 2,659 were Model X sports utility vehicle.

    Tesla plans a new car, the Model 3, which is to be a more affordable sedan, starting around $35,000, to go to market in late 2017.

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  • Tesla calls out to build a million all-electric cars a year by 2020

    Tesla calls out to build a million all-electric cars a year by 2020

    Technology entrepreneur Elon Musk gave a public shout-out to the sharpest minds in manufacturing this week, calling on them to come help Tesla Motors Inc build a million all-electric cars a year by 2020.

    Musk says he is “hell-bent” on making the Silicon Valley automotive upstart a manufacturing powerhouse, but his vision relies on finding veteran auto engineers to ramp up volume ten-fold in four years – a challenge even for established carmakers.

    Tesla on Wednesday said it would build 500,000 cars in 2018, two years ahead of schedule, and close to 1 million by 2020. The same day Tesla said its vice presidents in charge of production and manufacturing were leaving.

    “You’re looking at a company with significant levels of management turnover at the highest ends, people without experience in the planning, design or build of vehicles, and you expect to crank it up at those kinds of volumes?” asked Michigan-based auto manufacturing consultant Michael Tracy.

    Putting aside the issue of capital requirements, auto experts point to a shortage of manufacturing engineers, whose ranks were thinning out even before the U.S. auto crisis hit in 2008.

    “It’s a constant issue we have in this country,” said Garth Motschenbacher, director of employer relations at Michigan State University’s College of Engineering.

    “For the longest time manufacturing was seen as the dirty end of engineering,” he said.

    At the same time, Alphabet’s Google and Apple are working on car programs and courting the same potential employees. So are established auto names like Ford Motor Co, General Motors Co and Toyota Motor Corp .

    A 2015 Deloitte report found it takes three months to hire skilled engineers, and the shortage is crimping manufacturers.

    Robust early reservations for the upcoming Model 3 mass-market car may have assured Musk of demand, but now comes the execution, said automotive recruiter Stephen Parkford.

    “It’s like reservations for a restaurant that’s not open yet. You got the menu, but you don’t have a chef!” he said.

    Hiring a highly proven production engineer from a traditional carmaker who arrived with his entire team could speed the process, Parkford said.

    But while young engineers will jump at the chance to work for Tesla, the “by-the-numbers, disciplined manufacturing guys” with 15-20 years experience will be harder to nab, said Cuneyt Oge, president of the Society of Automotive Engineers. One key obstacle is the high price of living in Silicon Valley.

    Musk needs a visionary auto industry veteran, Oge said. “But anyone with that kind of experience is going to say, ‘Hey, Elon, you can’t do this in two years.’”

    Tesla is known for pushing the envelope on design and technology but has stumbled in manufacturing, with prior launches marked by delays and quality issues.

    Traditional automakers have more human and financial resources than cash-burning Tesla: Tracy pointed to Nissan Motor Co Ltd’s ability in 2004 to bring in 200 engineers from Japan to help fix quality issues at its recently opened assembly plant in Canton, Mississippi.

    “Greybeards” are crucial to build and run factory systems, said Oge. “You can’t just defy the laws of business physics which require you to go down a learning curve collectively to build that systems know-how,” he said.

    While Tesla employees may cite Musk’s tirelessness and attention to detail, even bedding down inside his Fremont, California factory, others like consultant Tracy see a worrying sign.

    “If Elon is sleeping in a sleeping bag in a conference room off of the final assembly line, then there’s an awful lot happening in that factory that’s wrong,” Tracy said.

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  • Apple explores charging stations for electric vehicles

    Apple explores charging stations for electric vehicles

    Apple is investigating how to charge electric cars, talking to charging station companies and hiring engineers with expertise in the area, according to people familiar with the matter and a review of LinkedIn profiles.

    For more than a year, Silicon Valley has been buzzing about Apple’s plan to build an electric car. Now the company appears to be laying the groundwork for the infrastructure and related software crucial to powering such a product.
    The moves show Apple responding to a key shortcoming of electric vehicles: “filling up” the batteries. A shortage of public charging stations, and the hours wasted in charging a car, could be an opportunity for Apple, whose simple designs have transformed consumer electronics.

    Apple, which has never publicly acknowledged a car project, declined to comment for this story. Neither the LinkedIn profiles nor sources said specifically that Apple was building charging stations for electric cars.
    But automotive sources last year told Reuters that Apple was studying a self-driving electric vehicle (EV), as the Silicon Valley icon looks for new sources of revenue amid a maturing market for its iPhone.

    Apple is now asking charging station companies about their underlying technology, one person with knowledge of the matter said. The talks, which have not been reported, do not concern charging for electric cars of Apple employees, a service the company already provides. They indicate that Apple is focused on a car, the person added.

    Charging firms are treading carefully, the person added, wary of sharing too much with a company they view as a potential rival.
    It is unclear whether Apple would want its own proprietary technology, such as Tesla Motors’ Supercharger network, or would design a system compatible with offerings from other market players.

    Several charging station suppliers contacted by Reuters declined to comment about any dealings with Apple, which typically requires potential partners to sign non-disclosure agreements.

    Arun Banskota, president of NRG Energy electric vehicle charging business, EVgo, did not respond directly to questions about Apple, but said repeatedly that his company was “in discussions with every manufacturer of today and every potential manufacturer of tomorrow.”

    Apple has hired at least four electric vehicle charging specialists, including former BMW employee Rónán Ó Braonáin, who worked on integrating charging infrastructure into home energy systems as well as communication between EVs, BMW and utilities, according to a LinkedIn review.

    As recently as January Apple hired Nan Liu, an engineer who researched a form of wireless charging for electric vehicles, for instance. Quartz earlier this month reported that Apple had hired former Google charging expert Kurt Adelberger.
    Electric vehicle charging stations are manufactured, installed and operated under varying business models. Players in the space include Car Charging Group and privately held ChargePoint, SemaConnect and ClipperCreek, infrastructure companies such as Black & Veatch and AECOM as well as General Electric, Siemens and Delta Electronics.
    The three largest utilities in California also have plans to install charging stations.

    CHARGER SHORTFALL

    The electric car industry has faced a chicken-and-egg paradox with the installation of charging stations. Property owners have been reluctant to install the stations before EVs hit the road en masse, and drivers are wary of buying EVs until charging stations are widely available.

    Apple’s home state of California by 2020 will need about 13 to 25 times the roughly 8,000 work and public chargers it currently has, to support a projected 1 million zero-emission vehicles on the road, according to an estimate by the National Renewable Energy Laboratory.

    Tesla recently goosed electric vehicle demand, unveiling its more affordable Model 3 sedan, generating hundreds of thousands of reservations from potential buyers and leading many experts to calculate the number of EVs will soon outstrip the charging station supply.

    Tesla has led the way with a proprietary network for customers, who also can use public chargers. Tesla’s more than 600 “Supercharger” stations juice up a car in about 30 minutes, more than twice as fast as the standard “fast charger,” called Level 2.
    One global engineering and construction firm already has reached out to Apple to offer its services, a person at the firm said.
    “It would be natural to assume if Apple is going to have a full battery electric vehicle that creates a seamless consumer experience the way Apple does, the charging infrastructure and its availability would be of paramount importance,” the source said.

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  • Tesla Opens 17th Experience Store In China

    Tesla Opens 17th Experience Store In China

    U.S.-based electric car maker Tesla has opened a new experience center, which is the company’s largest experience center in North China and its fifth owned sales site in Beijing.

    Tesla will reportedly build ten new stores in China in 2016. At the same time, the company will stick to a direct sales model, which is the core model of Tesla. At present, Tesla’s new cars need to be booked via its official website and the cars will be delivered to physical stores.

    So far, Tesla has opened 17 experience centers in China, covering North China, East China, and South China. Those experience centers are mainly located in first-tier cities, including Beijing, Shanghai, Guangzhou, and Shenzhen, and some are in Hangzhou, Chengdu, and Xi’an.

    Zhu Xiaotong, head of Tesla China, said that the company will continue to develop within the market of first-tier cities in the future. On one hand, the potential of those super cities has not been fully explored and they can still digest Tesla’s capacity; on the other hand, it is complicated to expand into a new city. Therefore, Tesla will seek stable development based on existing sites.

    During the opening ceremony of this new store, Tesla’s new Model S also made its debut in China.

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  • Tesla’s new Model X will cost you an arm and a leg in China

    Tesla’s new Model X will cost you an arm and a leg in China

    Fans of affordable electric vehicles, avert your eyes. Tesla has announced its mainland China pricing for high-end models of its upcoming SUV, the Model X, and the numbers are not pretty. The 90D model, which will cost around US$100,000 in most other markets, will run Chinese consumers a whopping US$146,000. Chinese Tesla fans who want the fancy P90D Signature Red limited edition model can expect to pay almost US$225,000 (the Signature P90D reportedly costs US$132,000 in the US).

    This news shouldn’t come as a huge surprise. Prices for other Tesla models in China, like the Model S 70D it announced last year, feature similar markups.

    It’s not clear exactly who Tesla fans should blame for the consistently high prices. China does charge high import duties on luxury cars, reportedly around 25 percent. But Chinese state media has accused foreign automakers of price-gouging in China, and a 25 percent tariff doesn’t explain how the P90D Signature model seems to double in price somewhere between Tesla’s US home and Beijing.

    On the other hand, Tesla claims that it charges the same prices for all of its cars after accounting for transportation costs and import duties. And Tesla’s prices are pretty reasonable compared to other imported luxury cars. Tesla’s China markup for the Model X 90D is 53.7 percent. That’s nothing compared to the whopping 188.4 percent markup Chinese consumers pay to buy the BMW M5, for example, which costs under US$100,000 in the US and nearly US$300,000 in China. The China markup on a luxury SUV, the Porsche Cayenne Turbo, is even worse (194 percent).

    Even with the high costs, the Model X could do well in China. A fan tally (which almost certainly doesn’t account for all reservations) suggests the company has over 2,600 Model X units reserved in China already. Moreover, the car features an air-filtering biodefense system that could be a boon to urban Chinese drivers who want to ensure they’re not breathing in Beijing’s toxic haze.

    Lower costs coming?

    It will be interesting to see how Tesla prices its lower-cost Model 3 when that hits the market next year (or later). Currently, its offerings are all luxury-tier, and although the China prices are inflated, China’s luxury car consumers can generally afford to pay them. China has more than a million millionaires, after all. But the Model 3 is intended to be accessible to the middle class, at least in Western markets. Will Tesla price it aggressively to go after that market in China too, or will it become a low-end luxury offering thanks to China price inflation?

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  • Tesla Posts Wider Loss, Highlights Energy Storage Demand

    Tesla Posts Wider Loss, Highlights Energy Storage Demand

    Tesla Motors reported a wider first-quarter net loss on Wednesday, but outperformed expectations and stuck to key milestones for the year ahead, despite pressure on margins.

    Chief executive officer Elon Musk said during a conference call that demand for the company’s new line of stationary energy storage systems, unveiled last week, is “off the hook.”

    Over time, it was possible stationary storage could be a bigger business for Tesla than selling cars, he added.

    Tesla said in a letter to shareholders on Wednesday that “total addressable market size for Tesla Energy products is enormous and much easier to scale globally than vehicle sales.”

    Musk said last week that the stationary battery storage systems could be “materially profitable” sometime next year.

    The shares of the Silicon Valley electric car maker rose about 2 percent after hours from their close of $230.43.

    The challenges confronting Tesla’s auto business were illustrated by the company’s continued cash burn and signs of pressure on profit margins.

    Tesla’s cash reserves fell to $1.5 billion as of March 31 from $1.9 billion at the end of 2014. The company said it plans a total of $1.5 billion in capital spending this year, much of it to buy production tools for the Model X, complete its large battery “gigafactory” in Nevada, and for other facilities.

    Musk said Tesla’s cash flow should turn positive later in the year.

    “It’s extremely likely cash flow is really good” by the end of the fourth quarter, he said.

    Chief financial officer Deepak Ahuja said Tesla is looking at establishing asset backed lines of credit to “assure we have a strong balance sheet.”

    Tesla reported an adjusted net loss of 36 cents a share in the latest quarter, excluding certain expenses, compared with a profit of 14 cents a share on the same basis a year ago. Analysts had expected a loss of 50 cents a share on that adjusted basis.

    Tesla had a net loss in the first quarter of $154.2 million, or $1.22 a share, on revenues of $939.9 million. A year ago, Tesla reported a net loss of $49.8 million, on revenues of $620.5 million.

    However, the automaker warned that a “less rich product mix” could push down average selling prices for the Model S sedan, which now starts at $76,200.

    Tesla delivered 10,045 Model S sedans in the first quarter, a 55 percent increase from the year before. The company forecast deliveries of 10,000 to 11,000 vehicles in the second quarter.

    Tesla could face more competition in the future as established automakers field new electric vehicles with longer driving ranges. There is also the potential other well capitalized Silicon Valley companies such as Apple Inc or Google Inc will move into the market.

    Asked about that, Musk said: “I certainly hope Apple gets into the car business. That would be great.”

    Tesla said it will start delivering its Model X sport utility vehicle late in the third quarter, still within the window the company promised earlier this year. The Model X is critical to Tesla’s goal of delivering 55,000 vehicles this year.

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