I was stoked to hear 60 Minutes was doing a piece on a company I keep an eye on here locally, Tesla Motors. I was interested in potentially joining Tesla and it didn’t work out, but I came away really impressed with the vision, the people, and the passion I saw when I visited the offices. I know they have an uphill climb, a unique one we have never seen before here in Silicon Valley, but they’re far enough away from base camp where you’re kind of thinking/hoping that they are going to make it as a company and more importantly make a social impact. I applaud anyone who works there or invested money in the company. Anyways, below is the video. Kudos to CBS for letting bloggers embed it.
So the piece as you can see (only 12 minutes long) is not solely about Tesla but rather the idea that Tesla and maybe someone else in Silicon Valley starups can embarrass the hell out of the Detroit auto industry. It paints Detroit and particular GM/Chevy as a bunch of stubborn old dinosaurs/old boys network too set in their ways create a new wave of innovative more eco friendly automobiles. Trying to quell that notion is really old (76) GM Vice Chairman of Global Product Development, Bob Lutz.
Some background on Lutz to consider…
- He hasn’t worked in Green tech at all….He called global warming, a crock of sh%t
- He got a MBA from Berkeley in the 60’s. Would love to hear about that….
- He has 2 helicopters and a plane (not sure why this was relevant but it was interesting)
- Lutz has a blog. Good for him.
So now back to the real meat of this story. Its huge billionaire company vs tech startup who apparently does not like hiring people who work at car companies (has since switched this philosophy).
The Volt is supposed to come out in 2010. They billed it initially as an every man’s car at around 20k. Their up to 40k now and they will lose money it for sure.
Lets compare to Tesla. Tesla has dealerships company owned stores. Tesla has cars on the road. Tesla has good will. Tesla has endorsements from stars from Hollywood (Damon, Clooney, Flea) to Silicon Valley power brokers, to the Governator.
Tesla’s beauty below costs 109k and I would say maybe 100-200 are on the road, but I am picking that number out of the air. Maybe higher.
The plan is to launch their luxury sedan in 2010 and for them to be mass produced and sold through a growing dealership distribution channel. Profits from these cars (to be sold around 60k) will then hopefully allow them to produce a true every man’s car by 2012 for around 20-30k. The plan sounds good, but they will have to execute on all sides at a high level (engineering, qa testing, sales, marketing). Most likely they will slip a bit in terms of the plan laid out, but if 2010 comes at Telsa has modest sales to America’s green tech savvy white collar professionals in their Sedan and the Volt is still not out, then its officially game over.
Goliath admits they will look like idiots if they can’t enter the market effectively. If their car does not perform or sell well, this will only add fuel to the fire that Detroit has completely deteriorated to a bunch of under performing, unimaginative, out of touch, bureaucratic idiots. If Silicon Valley/Tesla make the impact they predict, then its a big win for Silicon Valley in general as lots of local VC’s and Millionaire CEO’s are invested in the company.
It would be a message to the world, that we have great ideas, visionary people who are willing to take risks, and some of the hardest working people in the world killing themselves to roll this ball up a mountain. I am rooting that they get there, because I really liked what I saw when I visited the HQ. The car is amazing, and we just straight up need less dependence on oil (foreign, domestic, vegetable, olive, peanut, virgin, Sesame etc).
Also Below is a table on how much revenue Tesla would make in 2009 with assumptions that each car would be $109,000. I am guessing they will be able to produce and sell 3-4 a day in 2009 (aggressive maybe)
1,000 produced and sold ( 2.73 a day)- $109,000,000 (not shabby, probably likely?)
3,650 Produced and sold ( 10 a day) – $397,850,000 (freaking sweet, small longshot?)
Links to previous Tesla articles……