Koo’s Corner

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.

Lutz came off as genuine and did an admirable job touting GM’s efforts to release a hybrid/ electric car named the Volt (below by 2010).

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……

San Jose Lands Tesla Motors Facility….Sweet Deal for Tesla

Governator Out Muscles New Mexico for Tesla Production Facility

California Green Transportation Updates- High Speed Trains and Tesla Motors Updates

LA- Where Silicon Valley Rolls out Luxury

Vudu Arrives, First Impression (and subsquent Who Killed the Electric Car Review)

I would have had no clue today was Earth Day, but thankfully the major online search engine and portals remembered. Its become the industry standard of late for online portals to create event specific banners to celebrate holidays. Below are some examples of the Earth Day banners. Ask.com had a similar one , but its too big and also who really goes to ask.com.

So rather than pointing out how online companies utilize graphics to get in the spirit of holidays, I thought it would be a good time to bring attention to a couple of interesting investments in Green Technology.

Its clear that corporate America has come around in acknowledging the need to be viewed as a environmentally responsible company. At the forefront of this is GM and Chevron, who are spending millions touting their green technology initiatives. Unfortunately I view most of this self proclamation of a change of heart, as being too little too late.

2 initiatives that do stick out as being whole hearted attempts to be more eco friendly is Tesla Motors and Boone Picken’s recent investment in wind energy.

Pickens, a billionaire oil kingpin (manages BP), recently announced a 10 billion dollar investment to setup the world’s largest wind farm.

Below is a video from a year ago highlighting the initial proposal.

Picken’s wind farm upon completion will be about 5x the largest wind farm in the world, will cover 200,000 acres, and will generate enough electricity to power one million homes.

Yeah this should have been done years ago, but its encouraging to see one of the world’s most notorious oil tycoons turning the corner and investing in a cleaner form of energy.

Next up is Tesla Motors who makes the car below.

The Tesla Roadster is lightning quick going 0-60 in under 4 seconds, has RPM redline of 13,000, and is the premier car for Silicon Valley CEO’s and Hollywood’s A list. Why you ask? Because its electric.

With a 220 mile range and a MPG equivalency of 135 mpg, the Roadster doesn’t sacrifice much and has been compared very favorably to other sports cars (MotoTrend review below)

[youtube=http://youtube.com/watch?v=j6b4qbBvkAc]

Tesla is slowly rolling out the Roadster to those who have pre purchased and hopes to ramp up production through out 2008. The good news is that Tesla is hoping to release a luxury sedan and an economy car in the coming years.

While building a car company from the ground up is nearly impossible, Tesla is well funded and is backed by a powerful assortment of VC firms and Silicon Valley CEO’s. Below is a recent video of the first Roadster being assembled in San Carlos.

I have been following Tesla for awhile and have even met a couple of their employees. I am an avid fan of what they are doing and am optimistic that the future is bright for them as they begin to ship more cars and develop different cars. Clearly the idea of $4 gas is going to drastically change our buying preferences for cars, and Tesla has the product and vision to deliver on this unfulfilled market.