Detroit Auto Show: Tesla to make batteries for Smart EV
While Tesla's major-auto-show debut may have lacked style and free espresso, it more than made up for that with actual news (something painfully absent in most press conferences in Detroit this week).
The San Carlos-based electric-car maker said today that it has been selected to provide the batteries and chargers for Daimler's Smart EV and that the company would deliver 1,000 of the batteries this year and next.
"Daimler just gave me permission this morning to announce the news," said Elon Musk, best known as the co-founder of Paypal. He said he had been in discussions with Daimler, maker of the Smart car and Mercedes-Benz, since mid-2007, and that Tesla delivered its first prototype a year ago. If the program develops, Musk said, it could lead to the production of "tens of thousands" of the batteries.
A fleet of electric Smart cars now being tested in London does not use the Tesla batteries, Musk said. The final version of Tesla's battery, which will be built in California, is still in development.
According to a company spokesperson, Tesla's powertrain business, as distinct from its full-fledged electric-vehicle unit (which sells the $109,000 electric Roadster) is "cash-flow positive." Musk said that although the company as a whole is not yet profitable, he expects to find the black on operations by "the middle of this year."
In addition to the Roadster, Tesla is also developing a high-end sedan, the Model S...
It will be built in San Jose, and, according to Musk, will cost $49,900, after a $7,500 tax credit for electric vehicles that was passed by Congress last fall. That is, the Model S will have a sticker price of $57,400. Musk said the company hopes to produce 20,000 of the vehicles, on an annualized basis, by mid-2011.
To fund development of the Model S, Tesla has applied for two sets of government-backed low-cost loans, both from the Department of Energy. One, for $250 million in Title 17 loan guarantees, "is a when, not an if" proposition, Musk said. The other, loans under the much-publicized $25-billion program for development of advanced automotive technology, would be for $350 million, but that is pending.
Additionally, Musk said the company has a "sub-application" of $100 million in loans to construct a plant that would build powertrain components for other auto manufacturers.
In other news, Mike Donoughe, Tesla's executive vice president for vehicle engineering and manufacturing, said Tesla had opened a new office in Auburn Hills, Mich. Staffed with about 15 people, mostly engineers, it will work mainly on development of the Model S.
In October, the company announced it would close its office in Rochester Hills, Mich., at the same time that Musk removed the then-chief executive and put himself in the position, raising concerns about the company's financial situation.
To date, Donoughe said, Tesla has delivered more than 150 of its Roadsters. Later this year, it will begin selling a souped-up, more expensive ($128,500) version called the Roadster Sport, and will begin selling the Roadster in Europe in June.
Tesla's chief rival, Irvine-based Fisker, revealed the production version of its Karma plug-in hybrid sedan in Detroit this week, and continued to pledge to deliver it late this year. The company also revealed a concept convertible coupe that would also be a plug-in hybrid.
-- Ken Bensinger
Photo: A Smart Car electric car display at the North American International Auto Show. Credit: Stan Honda/AFP/Getty Images)
Yeah right. Tesla has been nothing but lots of hot air. Once other car companies ramp up, they will buy batteries from some other source and Tesla will die!
Posted by: Enlightenment | January 13, 2009 at 12:23 PM
so tesla wants to operate by borrowing taxpayers money? no way.
Posted by: ferenc | January 13, 2009 at 07:40 PM
The government should give loans to any manufacturer of electric vehicles.
Posted by: Steelerfan | January 15, 2009 at 10:49 AM