EoW November 2009

Whether this rarefied transaction will edify the battered auto makers of Detroit remains to be seen. Preliminary overtures by Mr Martin suggest an industry preoccupied, for now, with issues related to survival. But he is brimming with confidence and will renew his attack in six months or so, his views on the US vis-à-vis China intact. “China will grow, but China is not the whole world,” the Austrian-born Mr Martin told the Free Press . “I believe in the US economy. Some people in Europe think the American auto industry is done, but they are mistaken. The auto market and the overall economy will rebound.”

A breakthrough for the electric car: Tesla’s fast-off-the-mark ‘Roadster’ turns a monthly profit

In other news involving exotic automobiles, the technology- focused blog TechCrunch reported on 7 th August that, in July, the electric car manufacturer Tesla posted its first profit. The privately owned company, based in San Carlos, California, said it shipped 109 Roadsters in the month. The all-electric sports car with the homely name but the high price ($109,000) boosted Tesla to “approximately $1 million of earnings” on revenues of $20 million. The Roadster’s ability to reach a speed of 60 miles per hour in 4 seconds would make it competitive with some Porsches and Lamborghinis. Of more practical interest, the car’s reported fuel efficiency (100 miles per gallon of gasoline) is approximately double that of the hybrid Toyota Prius. Tesla’s introduction of the Roadster in June 2006 featured a test drive by California’s governor Arnold Schwarzenegger, and the company’s high-profile backers still lean toward showmanship. The latest Tesla dealership, in Manhattan, is located not on auto row but in the Chelsea art district – in a former art gallery inside a building full of galleries. But turning a profit on the Roadster represents a solid accomplishment, wrought from cost economies and stream- lined production methods. According to Andrew Heining of the ecology-centred blog Horizons, Tesla’s CEO Elon Musk has succeeded in bringing down materials costs for the high-performance car from $140,000 to $80,000. Steady production of 20 to 30 Roadsters per week will support the company’s expanding network of outlets in major US cities and Europe. Tesla will also offer an all-electric sedan – at half the price of the Roadster – for which it has received a $465 million loan under the US Department of Energy’s $25 billion programme to help auto manufacturers. The money will go towards completing the development of the Modern S and its electric power trains. The car’s battery packs are being licensed to other car makers such as Mercedes, whose parent company Daimler has just paid $50 million for a 10% Tesla stake.

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EuroWire – November 2009