Tesla, Inc.

Tesla Motors, Inc.

Tesla Motors
Tesla's global corporate headquarters in Palo Alto, California
Company type	Public
Traded as	Nasdaq: TSLA NASDAQ-100 Component
Industry	Automotive
Founded	2003
Founder	Elon Musk Martin Eberhard Marc Tarpenning JB Straubel Ian Wright
Headquarters	Palo Alto, California, USA
Area served	United States, Canada, Western Europe, Middle East, China, Japan, Australia, New Zealand
Key people	Elon Musk (Chairman and CEO) JB Straubel (CTO)
Products	Electric Luxury cars Automotive components
Revenue	US$2,013 million (2013)
Operating income	US$−61 million (2013)
Net income	US$−74 million (2013)
Total assets	US$2,417 million (2013)
Total equity	US$667 million (2013)
Owner	Elon Musk (27%) Toyota Group (0.27%) Daimler AG (0.14%)
Number of employees	6000 (Jan 2014)
Website	TeslaMotors.com
Footnotes / references

Tesla Motors, Inc. is an American company that designs, manufactures, and sells electric cars and electric vehicle powertrain components. Tesla Motors is a public company that trades on the NASDAQ stock exchange under the symbol TSLA. In the first quarter of 2013, Tesla posted profits for the first time in its ten year history.

Tesla Motors first gained widespread attention by producing the Tesla Roadster, the first fully electric sports car. The company's second vehicle was the Model S, a fully electric luxury sedan.

Tesla also markets electric powertrain components, including lithium-ion battery packs, to automakers, including Daimler and Toyota. Tesla's CEO, Elon Musk, has said he envisions Tesla as an independent automaker, aimed at eventually offering electric cars at a price affordable to the average consumer.

Overview

New Tesla Model S cars at the Tesla Factory in 2012

Tesla Motors is named after electrical engineer and physicist Nikola Tesla. The Tesla Roadster uses an AC motor descended directly from Tesla's original 1882 design. The Tesla Roadster, the company's first vehicle, is the first production automobile to use lithium-ion battery cells and the first production EV with a range greater than 200 miles (320 km) per charge. Between 2008 and March 2012, Tesla sold more than 2,250 Roadsters in 31 countries. Tesla stopped taking orders for the Roadster in the U.S. market in August 2011. Tesla unveiled the Tesla Model S all-electric sedan on March 26, 2009. As of March 2013, Tesla employed almost 3,000 full-time employees.

Corporate strategy

Tesla's strategy was to emulate consumer electronics' products and enter the automotive market with an expensive high-end product targeted at affluent buyers. As the company, its products and consumer acceptance matured, it would move into larger, more competitive markets at lower price points.

Aiming premium products at affluent "thought leaders" is a well known business strategy in Silicon Valley and the global technology industry, where prices for the first versions of cellular phones, laptop computers and flat-screen televisions start high but drop in subsequent product cycles. According to a blog post by Musk, "New technology in any field takes a few versions to optimize before reaching the mass market and in this case it is competing with 150 years and trillions of dollars spent on gasoline cars."

While the Roadster's base price was US$109,000, the Model S's base price was US$57,400 and the company plans to later launch a US$30,000 vehicle, codenamed BlueStar.

One of Tesla's stated goals is to increase the number and variety of EVs available to mainstream consumers by:

• selling its own vehicles in company-owned showrooms and online;
• selling powertrain components to other automakers
• serving as a catalyst and positive example to other automakers

Tesla focuses on pure electric propulsion technology, even for larger vehicle segments and ranges beyond 200 miles. Musk won the 2010 Automotive Executive of the Year Innovator Award for hastening the development of electric vehicles throughout the global automotive industry.

Business model, and automotive dealership disputes

Tesla operates stores or galleries, both of which are usually located in shopping malls, in 22 U.S. states and Washington DC. Customers cannot purchase vehicles from the stores; customers must order their vehicles on the Tesla Motors website. The stores act as showrooms that allow people to learn more about Tesla Motors and its vehicles. The galleries are located in states with more restrictive dealership protection laws, which prevent discussing prices, finances, test drives, and other restrictions.

Tesla's strategy of direct customer sales and owning its own stores and service centers is a significant departure from the dealership model in the U.S. marketplace. Tesla Motors is the only automaker that sells cars directly to consumers, with all other automakers using independently owned dealerships. 48 states have laws that limit or ban manufacturers from selling vehicles directly to consumers, and even though Tesla Motors has no independent dealerships, dealership associations in multiple states have filed numerous lawsuits against Tesla Motors, trying to block the company from selling cars in some states. North Carolina and New Hampshire sided with Tesla Motors while Virginia and Texas have taken the opposite position.

Texas currently has the most stringent dealership protection laws, which make purchasing a vehicle from Tesla Motors very difficult in the state. Texas requires all new cars to be purchased through third party dealerships, effectively blocking Tesla from selling cars in Texas. A resident of Texas may still purchase a vehicle from Tesla Motors, but purchasing the vehicle must be handled as an out-of-state transaction. This may result in loans with higher interest rates, the inability to include Texas state sales tax in the loan, and new owners cannot take advantage of the personal delivery of their Tesla to a Texas address. New owners must then register the vehicle with the state, pay the sales tax when taxes are filed, and go to a local service center if the new owner wants to learn more about their car. Tesla has lobbied the Texas Legislature to modify Texas law to allow Tesla to sell directly to consumers and specifically allow Tesla employees to discuss "financing, leasing, or purchasing options" at the firm's existing stores in Austin and Houston.

On Monday, March 10, 2014, it was announced that New Jersey Motor Vehicle Commission, and the Governor Christie’s Administration would be holding a meeting to pass a new proposal into law. This new proposal PRN 2013-138 was announced one day before it was to be put into law. Tesla Motors responded saying that the proposal, "seeks to impose stringent licensing rules that would, among other things, require all new motor vehicles to be sold through middlemen and block Tesla’s direct sales model," and that "[Governor Christie’s] Administration has decided to go outside the legislative process by expediting a rule proposal that would completely change the law in New Jersey." The meeting was for 2pm the next day. The law was passed and "Tesla will no longer [be able to] sell electric cars in New Jersey, effective April 1". Diarmuid O’Connell Tesla Vice President of Business Development said, "Worse, it has done so without any reasonable notice or even a public hearing." Forbes contributor Mark Rogosky said "The state’s new rules protect its auto dealers from having to compete with Tesla’s direct sales model," he goes on to point out that this is a direct contrast from when Christie said earlier that “We are for a free-market society that allows your effort and ingenuity to determine your success, not the cold, hard hand of the government.” Kevin Roberts a spokesman for the Christie administration responded saying "it was the {Tesla Motors} company, not the governor's office, that was attempting to bypass normal procedures."

Technology

Tesla Motors builds electric powertrain components for vehicles from other automakers, including the lowest-priced car from Daimler, the Smart ForTwo electric drive, the Toyota RAV4 EV, and Freightliner's Custom Chassis Electric Van.

Battery technology

Unlike other automakers, Tesla does not use single-purpose, larger format cells. Tesla uses thousands of lithium-ion 18650 commodity cells. 18650 cells are small, cylindrical battery cells, which are usually found in laptops and other consumer electronics devices. Tesla Motors uses a unique version of these cells, designed to be cheaper to manufacture and to be lighter than the standard cells. The cost and weight savings were made by removing some safety features. According to Tesla Motors, the safety features are redundant because of the advanced thermal management system and a protective intumescent chemical in the battery pack. The chemical is supposed to prevent battery fires. Currently Panasonic, a Tesla Motors investor, is the sole supplier of the battery cells for the car company.

Tesla Motors may have the lowest rates for electric car batteries; the estimated battery costs for Tesla Motors is around US$200 dollars per kWh. Currently, Tesla Motors charges $10,000 dollars more for the 85kWh battery than the 60kWh battery, or $400 per kWh. At $200 per kWh, the battery in the 60kWh Model S would cost $12,000, while the 85kWh battery would cost $17,000.

In the Model S, Tesla Motors integrated the battery pack into the floor of the vehicle, unlike in the Roadster, which had the battery pack behind the seats. Because the battery is integrated into the floor of the Model S, no interior space is lost for batteries, unlike in other electric vehicles, which often lose trunk space or interior space to batteries. The location of the battery pack and the lower ride of the Model S does put the battery at a higher risk of being damaged by road debris or an impact. To protect the battery pack, the Model S has a quarter inch aluminum-alloy armor plate. The battery pack's location allows for quick battery swapping. A battery swap can take as little as 90 seconds in the Model S. There are currently no public Tesla battery swap locations.

Technology Sharing

Tesla CEO Elon Musk announced in a press release and conference call on June 12, 2014 that the company will allow its technology patents for use by anyone in good faith.. Reasons expressed for this stance include attracting and motivating talented employees, as well as to accelerate the mass market advancements of electric cars for sustainable transport. Elon Musk believes this application of open source philosophy will ultimately strengthen Tesla's position as a technology leader in the rapidly evolving electric vehicle industry. The patents Tesla holds encompass a diverse spectrum of technologies including the design of charging systems, crash energy management structures, door mechanisms, battery thermal management and monitoring, control for all-wheel drive, and motor winding.

Competition

General Motors' then-Vice Chairman Robert Lutz said in 2007 that the Tesla Roadster inspired him to push GM to develop the Chevrolet Volt, a plug-in hybrid sedan. In an August 2009 edition of The New Yorker, Lutz was quoted as saying, "All the geniuses here at General Motors kept saying lithium-ion technology is 10 years away, and Toyota agreed with us – and boom, along comes Tesla. So I said, 'How come some tiny little California startup, run by guys who know nothing about the car business, can do this, and we can't?' That was the crowbar that helped break up the log jam."

Car models

Tesla Roadster

Main article: Tesla Roadster

Tesla began producing right-hand drive Roadsters in January 2010 and sold them in the UK, Australia and parts of Asia.

Tesla Motors' first production vehicle, the Tesla Roadster, was an all-electric sports car. The Roadster was the first highway-capable all-electric vehicle in serial production for sale in the United States in the modern era. The Roadster was also the first production automobile to use lithium-ion battery cells and the first production BEV to travel more than 200 miles (320 km) per charge.

Tesla Roadster Sport 2.5, the company's fourth-generation Roadster

Prototypes were introduced to the public in July 2006. The Tesla Roadster was featured on the cover of Time in December 2006 as the recipient of the magazine's "Best Inventions 2006—Transportation Invention" award. The first "Signature One Hundred" set of fully equipped Roadsters sold out in less than three weeks, the second hundred sold out by October 2007, and general production began on March 17, 2008. Since February 2008 two new models were introduced, one in July 2009, and another in July 2010.

In January 2010, Tesla began producing its first right-hand-drive Roadsters for the UK and Ireland, then began selling them in mid-2010 in Japan, Singapore, Hong Kong and Australia. Tesla produced the Roadster until early 2012, when its supply of Lotus Elise gliders ran out, as its contract with Lotus Cars for 2,500 gliders expired at the end of 2011. Tesla stopped taking orders for the Roadster in the U.S. market in August 2011. Featuring new options and enhanced features, the 2012 Tesla Roadster was sold in limited numbers only in Europe, Asia and Australia. The next generation is expected to be introduced in 2014, based on a shortened version of the platform developed for the Tesla Model S. Tesla sold more than 2,400 Roadsters in 31 countries through September 2012. Most of the remaining Roadsters were sold during the fourth quarter of 2012.

The car had an average range of 245 miles (394 km) per charge according to Tesla. On Oct. 27, 2009, the Roadster driven by Simon Hackett drove the entire 313-mile (504 km) segment of Australia's annual Global Green Challenge on a single charge, at an average speed of 25 mph (40 km/h). The Tesla Roadster can accelerate from zero to 60 mph (97 km/h) in under 4 seconds and has a top speed of 125 mph (201 km/h). The base price of the car is US$109,000 (€84,000 or £87,945). The Roadster Sport price started at US$128,500 in the United States and €112,000 (excluding VAT) in Europe. Deliveries began in July 2009. MotorTrend reported that the Roadster Sport recorded a 0–60 mph of 3.70 seconds and a quarter-mile test at 12.6 sec @ 102.6 mph (165.1 km/h), and stated "Tesla is the first maker to crack the EV legitimacy barrier in a century."

Model S

Main article: Tesla Model S

The Model S was announced in a press release on June 30, 2008. The sedan was originally code-named "Whitestar". Retail deliveries began in the U.S. on June 22, 2012. The first delivery of a Model S to a retail customer in Europe took place on 7 August 2013. Deliveries in China began on April 22, 2014. First deliveries of the right-hand-drive model destined for the UK, Australia, Hong Kong and Japan are scheduled to begin in the second quarter of 2014. The Model S was to have three battery pack options for a range of up to 265 miles (426 km) per charge, but this was reduced to two, due to lack of demand for the shortest range vehicle.

Tesla began production of its Tesla Model S sedan in 2012, and deliveries to retail customers began in June 2012.

A total of 2,650 Model S cars were sold in the North American market during 2012, mostly in the United States. Sales in Europe and North America totaled 22,477 units in 2013, surpassing Tesla's annual sales target of 21,500 units. Global sales reached over 25,000 units through December 2013, with the United States as the leading market with about 20,600 units, followed by Norway with 1,986 units, the Netherlands with 1,195 units sold through December 2013, and Canada with 733 units sold through December 2013. A total of 6,457 units were sold in North America and Europe during the first quarter of 2014. Tesla expects global sales of 35,000 units in 2014, a 55% increase over 2013, with combined sales in Europe and Asia expected to be almost twice that of North America by the end of 2014.

The Tesla Model S was the top selling new car in Norway in September 2013, thus becoming the first electric car to top the sales ranking in any country. The Model S captured a market share of 5.1% of all new car sales that month. In December 2013, and with a 4.9% market share, the Model S topped one more time the best selling new car list in Norway. In March 2014 Tesla Model S became the top selling car for one month ever in Norway. 10.8% of all new cars registered in Norway in March 2014 were Tesla Model S. Sales in the American market during 2013 totaled about 18,000 units, allowing the Model S to rank in 2013 as the third top selling plug-in electric car in the U.S. after the Chevrolet Volt (23,094) and the Nissan Leaf (22,610). Also in 2013, the Model S was the top selling car in the full-size luxury sedan category in the U.S., ahead of the Mercedes-Benz S-Class (13,303), the top selling car in the category in 2012, and also surpassing the BMW 7 Series (10,932), Lexus LS (10,727), Audi A8 (6,300) and Porsche Panamera (5,421).

Robotic manufacturing of the Model S at the Tesla Factory in Fremont, California.

Tesla manufactures the Model S in Fremont, California, in an assembly plant formerly operated by NUMMI, a defunct joint venture of Toyota and General Motors, now called Tesla Factory. Tesla purchased a stake in the site in May 2010 for US$42 million, and opened the facility in October 2010. For the European market, Tesla assembles and distributes the Model S from its European Distribution Center in Tilburg. Tesla chose Tilburg because of its location near the port of Rotterdam, where Models S components arrive from the U.S. The center also serves as a workshop and spare parts warehouse. Cars are built and tested in Fremont. Then, the battery pack, the electric motor and parts are disassembled and shipped separately to Tilburg, where the cars are reassembled. The United States Environmental Protection Agency range for the 85 kW·h battery pack model, the first trim launched in the United States market, is 265 mi (426 km), and 208 mi (335 km) for the model with the 60 kW·h battery.

Among other awards, the Model S won the 2013 "Motor Trend Car of the Year", the 2013 "World Green Car", Automobile Magazine's 2013 "Car of the Year", and Time Magazine Best 25 Inventions of the Year 2012 award.

Model X

Tesla Model X concept unveiled in Hawthorne California.

Main article: Tesla Model X

The Tesla Model X was unveiled at the company's design studios in Hawthorne, California February 9, 2012. Over a thousand people attended the unveiling, at which Musk said the car would enter production in 2013. In February 2013 Tesla announced that production had been rescheduled to begin by late 2014 in order to focus "on a commitment to bring profitability to the company in 2013" and to achieve their production target of 20,000 Model S cars in 2013. The company began taking reservations for the vehicle in 2013 and said that deliveries would begin in 2014.

In November 2013, Tesla confirmed the company expected to deliver the Model X in small numbers by end of 2014, with high volume production planned for the second quarter of 2015. However, Tesla announced in February 2014 that in order to focus on overseas roll outs of the Model S during 2014, the company expects to have production design Model X prototypes by the end of 2014, to begin high volume deliveries for retail customers in the second quarter of 2015.

Third generation car

The Tesla BlueStar was a codename for a proposed electric car to be manufactured by Tesla Motors, although more recently it has been referred to merely as the "third-generation car" or the "yet-to-be-named model".

This US$35,000–US$40,000 car with a range of 200 miles (320 km) is expected to begin deliveries by 2017.

The third-generation car, as it is officially called by Tesla, will, according to design chief Franz von Holzhausen, "be an Audi A4, BMW 3-series, Mercedes-Benz C-Class type of vehicle that will offer everything: range, affordability, and performance with a starting price of US$30,000" that is targeted towards the mass-market. Tesla intends the car to have a price under US$40,000 and have a range of about 200 miles (320 km). Technology from Tesla's Model S line may also make its way into the BlueStar line. "It would be quite similar to the Model S but scaled down." Although the Model S is generally a standard looking car, the third generation vehicle will have more distinctive style.

The company had plans for the "BlueStar" as part of its three step strategy, where the battery and electric drivetrain technology would be developed and paid for through sales of the Tesla Roadster and Tesla Model S vehicles. Step one was making the Tesla Roadster, high price, low volume. The Model S is step two with mid price, mid volume. The third genereration will be low price, high volume. It will be 20% smaller than the Model S.

Future models

Tesla Motors announced in June 2009, along with their loans from the DOE, plans to build electric minivans, crossover SUVs and electric fleet vans for municipal governments. The utility van and cabriolet are expected to be based on the Model S platform, along with the Tesla Model X crossover SUV. Besides the third generation car, other projects under discussion include an electric truck and a self-driving car. Future models may also reach a 400 miles (640 km) range because of a new patented battery system, pairing metal-air and lithium-ion batteries.

History

Tesla Motors was incorporated in July 2003 by Martin Eberhard and Marc Tarpenning, who financed the company until the Series A round of funding. Both men played active roles in the company's early development prior to Elon Musk's involvement. Musk led the Series A round of investment in February 2004, joining Tesla's Board of Directors as its Chairman. Tesla's primary goal was to commercialize electric vehicles, starting with a premium sports car aimed at early adopters and then moving as rapidly as possible into more mainstream vehicles, including sedans and affordable compacts.

The insignia of Tesla Motors as seen on a Tesla Roadster Sport.

Musk took an active role within the company and oversaw Roadster product design at a detailed level, but was not deeply involved in day-to-day business operations; Eberhard acknowledged that Musk was the person who insisted from the beginning on a carbon fiber body and he led design of components ranging from the power electronics module to the headlamps and other styling. In addition to his daily operational roles, Musk was the controlling investor in Tesla from the first financing round, funding the large majority of the Series A capital investment round of US$7.5 million with personal funds. From the beginning, Musk consistently maintained that Tesla's long-term strategic goal was to create affordable mass market electric vehicles. Musk received the Global Green 2006 product design award for his design of the Tesla Roadster, presented by Mikhail Gorbachev, and he received the 2007 Index Design award for his design of the Tesla Roadster.

The Tesla obelisk is used to identify the Supercharger network sites in California.

Musk's Series A round included Compass Technology Partners and SDL Ventures, as well as many private investors. Musk later led Tesla Motors' Series B, US$13 million, investment round that added Valor Equity Partners to the funding team. Musk co-led the third, US$40 million round in May 2006 along with Technology Partners. Tesla's third round included investment from prominent entrepreneurs including Google co-founders Sergey Brin & Larry Page, former eBay President Jeff Skoll, Hyatt heir Nick Pritzker and added the VC firms Draper Fisher Jurvetson, Capricorn Management and The Bay Area Equity Fund managed by JPMorgan Chase. The fourth round in May 2007 added another US$45 million and brought the total investments to over US$105 million through private financing.

In December 2007, Ze'ev Drori became CEO and President. In January 2008, Tesla fired several key personnel who had been involved from the inception after a performance review by the new CEO. According to Musk, Tesla was forced to reduce the company workforce by about 10% to lower its burn rate, which was out of control in 2007. The fifth round in February 2008 added another US$40 million. Musk had contributed US$70 million of his own money to the company by this time. In October 2008, Musk succeeded Drori as CEO. Drori became Vice Chairman, but then left the company in December. By January 2009, Tesla had raised US$187 million and delivered 147 cars. On May 19, 2009, Germany's Daimler AG, maker of Mercedes-Benz, acquired an equity stake of less than 10% of Tesla for a reported US$50 million. In July 2009, Daimler announced that Abu Dhabi's Aabar Investments bought 40% of Daimler's interest in Tesla.

In June 2009 Tesla was approved to receive US$465 million in interest-bearing loans from the United States Department of Energy. The funding, part of the US$8 billion Advanced Technology Vehicles Manufacturing Loan Program, supports engineering and production of the Model S sedan, as well as the development of commercial powertrain technology. The low-interest loans are not related to the "bailout" funds that GM and Chrysler received, nor are they related to the 2009 economic stimulus package. The loan program was created in 2007 during the George W. Bush administration. Tesla repaid the loan in May 2013. Tesla was the first car company to have fully repaid the government, while Ford, Nissan and Fisker had not.

The company announced in early August 2009 that it had achieved overall corporate profitability for the month of July 2009. The company said it earned approximately US$1 million on revenue of US$20 million. Profitability arose primarily from improved gross margin on the 2010 Roadster, the second iteration of Tesla’s award-winning sports car. Tesla, which like all automakers records revenue when products are delivered, shipped a record 109 vehicles in July and reported a surge in new Roadster purchases. In September 2009, Tesla announced an US$82.5 million round to accelerate Tesla's retail expansion. Daimler participated in the round to maintain equity ownership from its initial investment.

Tesla Motors signed a production contract on 11 July 2005 with Group Lotus to produce "gliders" (complete cars minus powertrain). The contract ran through March 2011, but the two automakers extended the deal to keep the electric Roadster in production through December 2011 with a minimum number of 2,400 units, when production ended, mostly because of tooling changes orchestrated by one of its suppliers. In June 2010, it was reported that Tesla sold a total of US$12.2 million zero emission vehicle credits to other automakers, including Honda, up to March 31, 2010.

2010 initial public offering

On 29 January 2010, Tesla Motors filed Form S-1 with the U.S. Securities and Exchange Commission, as a preliminary prospectus indicating its intention to file an initial public offering (IPO) underwritten by Goldman Sachs, Morgan Stanley, J. P. Morgan, and Deutsche Bank Securities. On May 21, 2010, Tesla announced a "strategic partnership" with Toyota, which agreed to purchase US$50 million in Tesla common stock issued in a private placement to close immediately after the IPO. Executives at both companies said that they would cooperate on "the development of electric vehicles, parts, and production system and engineering support." Less than two months later, Toyota and Tesla confirmed that their first platform collaboration would be to build an electric version of the RAV4 EV.

On June 29, 2010 Tesla Motors launched its initial public offering on NASDAQ. The IPO raised US$226 million for the company. It was the first American car maker to go public since the Ford Motor Company had its IPO in 1956. During November 2013, Tesla's stock fell more than 20 percent, following news of a third Model S fire. Despite the drop, Tesla was still the top performer on the Nasdaq 100 index in 2013. Tesla is seeking to sell 40,000 electric vehicles worldwide in 2014, adding China to its export plans.

Facilities

Tesla Motors' headquarters are located in Palo Alto, California. As of August 2013, Tesla operates over 50 company-owned showrooms worldwide. In July 2010, Tesla hired former Apple and Gap Executive George Blankenship as Vice President of Design and Store Development to build Tesla's retail strategy.

United States

Tesla was founded in San Carlos, California, in Silicon Valley. Tesla opened its first retail store in Los Angeles, California, in April 2008 and a second in Menlo Park, California, in July 2008. The company opened a display showroom in New York City's Chelsea art district in July 2009. It also opened a Seattle, Washington store in July 2009. Tesla subsequently opened stores in Washington, D.C.; New York City; Chicago; Dania Beach, Florida; Boulder, Colorado; Orange County, California; San Jose, California and Denver, Colorado. In 2010 Tesla moved its corporate headquarters and opened a powertrain development facility at 3500 Deer Creek Road, in the Stanford Research Park in Palo Alto. Tesla financed the project in part through US$100 million of the federal low-interest loans. The new facility occupies 369,000 sq ft (34,300 m²) on a 23-acre (93,000 m²) parcel previously occupied by Agilent Technologies. About 350 employees were expected to be based at the Stanford site initially, potentially increasing to 650.

Tesla Factory

Main article: Tesla Factory

Tesla built its Model S assembly plant in California with a fully ramped-up annual output of 20,000 sedans. Tesla partnered with Toyota to produce the Model S at the former NUMMI plant in Fremont, California, which opened on October 27, 2010 and was rechristened the Tesla Factory.

Supercharger network

In 2012, Tesla Motors began building a network of 480-volt fast charging Supercharger stations to facilitate longer distance journeys in the Model S. As of mid May 2014, there are 90 stations operating in the United States and 16 in Europe and 3 in China. The initial network was planned to be available in high-traffic corridors across North America, followed by networks in Europe and Asia in the second half of 2013. The first Supercharger corridor in the U.S. opened with free access in October 2012. This corridor included six stations placed along routes connecting San Francisco, Lake Tahoe, Los Angeles and Las Vegas. A second corridor was opened in December 2012 along the Northeast megalopolis, connecting Washington, D.C., New York City and Boston; it includes three stations located in highway rest areas in Delaware and Connecticut.

Tesla Model S charging at the Supercharger network station in Delaware.

The Supercharger is a proprietary direct current (DC) rapid-charging station that provides almost 120 kW of power, giving the 85 kWh Model S an additional 150 miles (240 km) of range in about 20 minutes, or 200 miles (320 km) of range in about 30 minutes. The electricity used by the Supercharger in the West Coast corridor comes from a solar carport system provided by SolarCity. Eventually, all Supercharger stations were to be supplied by solar power. The network is exclusive to compatible Model S sedans. Supercharging hardware is standard on Model S vehicles equipped with an 85 kWh battery and optional on Model S vehicles equipped with a 60 kWh battery. The Roadster is not equipped to charge from the Superchargers, but according to the automaker, all future Tesla models will be. According to Musk, “...we expect all of the United States to be covered by the end of next year [2013]”. He also said that Tesla owners’ use of the network would be free forever.

As of May 2014, there are 100 supercharger stations.

Battery swapping

Main article: Tesla station

Panoramic view of Tesla Supercharger rapid charging station in Tejon Ranch, California.

Tesla designed its Model S to allow fast battery swapping. This feature facilitated the assembly process. In June 2013, Tesla announced their goal to deploy a battery swapping station in each of its stations. Musk demonstrated a 90-second battery swap operation. Each swapping station was expected to cost US$500,000. Each station will initially have about 50 batteries available and will not require reservations. The service would be offered for the price of about 15 US gallons (57 L; 12 imp gal) of gasoline at the current local rate, around US$60 to US$80 at June 2013 prices. Owners can pick up their original battery pack fully charged on the return trip for the same price as the pack swap. Tesla would also offer the option to keep the pack received in the swap for the difference in price if the battery received is newer. Alternately, Tesla would return the original pack for a transport fee.

Canada

Tesla opened its first "new design" store in Canada on November 16, 2012 in the Yorkdale Shopping Centre in Toronto, Ontario. The store features interactive displays and design studios allowing customers to customize the Model S and viewing the result on an 85-inch wall. As of March 2014, there are four Tesla stores/galleries in Canada: one in Montreal, two in Toronto, and one in Vancouver.

Europe

Tesla showroom in Munich, Germany.

Tesla opened its first store in Europe in June 2009 in London's Knightsbridge district, followed by Munich in September. The London dealer relocated to the Westfield London shopping centre in October 2013. Tesla has 24 "galleries" and stores around Europe by the start of 2014. Tesla's European headquarters are in Amsterdam, the Netherlands. The Roadster's chassis was assembled by Lotus Cars in Hethel, Norfolk, England. The 62,000 sq ft (5,800 m²) European distribution centre and final assembly facility was established in 2013 in Tilburg in the Netherlands.

Asia

Tesla Motor's Japanese showroom in Aoyama, which was the first showroom opened in the country.

Tesla opened its first Japanese showroom in Aoyama on November 2010. Another showroom was subsequently opened in Osaka. Roadsters sold in Japan were either in left- or right-hand drive configurations, although Model S vehicles will only be available in right-hand drive configurations by 2014. According to Kevin Yu, the director of Tesla Motors Asia Pacific, Roadsters in Japan sell at an average price of between ¥12,800,000 and ¥20,000,000.

Tesla Motors established a Hong Kong branch and showroom in 2011. Roadsters were previously sold in Hong Kong for HK$1,200,000. The Hong Kong showroom consists of a "Design Studio" where prospective buyers can design their vehicle on a large touchscreen. The official Hong Kong service center opened in September 2011.

A Tesla branch existed in Singapore from July 2010 to February 2011, but the company ceased its operations in the country due to a lack of tax exemptions. Without tax breaks, the Roadster retailed between S$400,000 and S$500,000 rather than the much lower price of S$250,000.

Tesla's Chinese website was launched on December 16, 2013 to sell the Model S and Model X and set a February 2014 date for the distribution of both vehicles in China. The launch followed the opening of a Tesla showroom in Beijing in November 2013.

Australia

Tesla Motors opened a showroom in Sydney in 2010. A Roadster was driven by Country Manager Jay McCormack along the entire eastern seaboard covering a distance of more than 2,500 miles (4,000 km), the longest distance traveled by an electric vehicle in Australia.

Partners

Unlike many traditional manufacturers Tesla operates as an original equipment manufacturer (OEM), manufacturing powertrain components for other automakers. Tesla has confirmed partnerships with Daimler and Toyota. Tesla also works closely with Panasonic as a partner in battery research and development. The company also supplies battery packs for Freightliner Trucks' Custom Chassis Electric Van.

Daimler

Starting in late 2007, Daimler and Tesla began working together. The two companies were expected to collaborate further, including on the Tesla Model S sedan. On May 19, 2009, Daimler acquired an equity stake of less than 10% in Tesla for a reported US$50 million. As part of the collaboration, Herbert Kohler, Vice President E-Drive and Future Mobility at Daimler, took a seat on Tesla’s board of directors. On July 13, 2009, Daimler AG sold 40% of their May acquisition to Aabar Investments PJSC. Aabar is an investment company controlled by the International Petroleum Investment Company (IPIC), which is wholly owned by the Government of Abu Dhabi. In March 2009, Aabar purchased a 9% stake in Daimler for €1,95 billion.

Mercedes-Benz A-Class

Main article: Mercedes-Benz A-Class E-Cell

The second generationSmart electric drive uses a battery pack developed by Tesla.

Tesla, in collaboration with Mercedes-Benz, is building electric powertrain components for the Mercedes-Benz A-Class E-Cell, an electric car with a range of 200 km (124 mi) and 290 N⋅m (214 ft⋅lbf) of torque. The 36 kWh battery pack would contain approximately 4,000 individual lithium-ion cells. Daimler was not expected to lease the electric version outside of Europe. The Mercedes-Benz A-Class E-Cell was unveiled at the 2010 Paris Motor Show. Only 500 cars would be built for trial purposes in Europe beginning in September 2011.

Smart Fortwo

Main article: Smart electric drive

In January 2009, Tesla announced that it would produce the battery packs and chargers for an initial 1,000-unit test fleet of Smart EVs.

Toyota

On May 20, 2010, Tesla and Toyota announced a partnership to work on electric vehicle development, which included Toyota's US$50 million future conditional investment in Tesla and Tesla's US$42 million purchase of a portion of the former NUMMI factory. Tesla cooperated on the development of electric vehicles, parts, and production system and engineering support. It was announced that an electric version of the Toyota RAV4 would be mass-produced in 2012 at Toyota's Woodstock, Ontario plant.

Toyota RAV4 EV

Main article: RAV4 EV Second generation

Toyota RAV4 EV second generation

Tesla Motors and Toyota announced in July 2010 an agreement to develop a second generation of the compact Toyota RAV4 EV. At the time, Toyota planned to introduce the model into the market by 2012. A second generation RAV4 EV demonstrator was unveiled at the October 2010 Los Angeles Auto Show. Toyota built 35 of these converted RAV4s (Phase Zero vehicles) for a demonstration and evaluation program that ran through 2011. The lithium metal-oxide battery and other powertrain components were supplied by Tesla Motors. In August 2012, the production version RAV4 EV was unveiled; the battery pack, electronics and powertrain components are similar to those used in the Tesla Model S sedan launched in June 2012, and the Phase Zero vehicles used components from the Tesla Roadster.

Freightliner Electric Van

The company is supplying battery packs for Freightliner Trucks' Custom Chassis Electric Van.

Panasonic

Panasonic Energy Company President Naoto Noguchi presented Tesla CTO JB Straubel with the first production run of lithium-ion cells from Panasonic's facility in Suminoe, Japan.

On January 7, 2010, Tesla and battery cell maker Panasonic announced that they would together develop nickel-based lithium-ion battery cells for electric vehicles. Naoto Noguchi, President of Panasonic’s Energy Company, said the Japanese firm’s cells will be used for Tesla’s “current and next-generation EV battery pack.” The partnership was part of Panasonic's US$1 billion investment over three years in facilities for lithium-ion cell research, development and production. Tesla disclosed that the new cell resulting from its collaboration with Panasonic will allow Tesla to continue using cells from multiple suppliers.

In April 2010, Noguchi presented Tesla Chief Technology Officer J. B. Straubel with the first production cells manufactured at the new facility in Suminoe, Japan. The Suminoe factory produced 3.1Ah battery cells, the highest energy density cells in the market. The facility produces more than 300 million cells per year. On 5 November 2010, Panasonic invested US$30 million for a multi-year collaboration on next generation cells designed specifically for electric vehicles.

Other suppliers

The Roadster sourced parts from multiple countries from dozens of suppliers, including carbon fiber body panels, which are made in France by Sotira. The panels were sent to England, where Tesla contracts with Lotus to build its chassis in Hethel, U.K. The cars were then sent to Menlo Park for final assembly. The battery pack is assembled in Palo Alto, California, using cells from Japan. The single-speed gearbox is built in Michigan by USA-based supplier BorgWarner. When the company began in 2003, Tesla licensed AC Propulsion's Reductive Charging patent, which integrates charging electronics into the inverter for reduced mass and complexity. Later Tesla went its own way and no longer employs AC Propulsion's Reductive Charging feature.

Mercedes, Wells Fargo, and Omnivision amongst many other companies are amongst Tesla's top suppliers according to Spiderbook's Tesla suppliers list.

Lawsuits

Magna International

In March 2008, Magna International sued Tesla claiming that it was never paid for services rendered. Tesla had hired Magna to help design a 2-speed transmission for its Roadster.

Fisker Automotive

On April 14, 2008, Tesla Motors sued Fisker Automotive, alleging that Henrik Fisker "stole design ideas and confidential information related to the design of hybrid and electric cars" and was using that information to develop the Fisker Karma, which was announced at the North American International Auto Show in January 2008. Tesla had hired Fisker Coachbuild to design the WhiteStar sedan but dropped the design that Musk considered "substandard". On November 3, 2008, Fisker Automotive Inc. issued a press release indicating that an arbiter had issued an interim award finding in Fisker's favor on all claims. Tesla said the ruling was binding and that it would not pursue the case.

Founder dispute

The founding of the company was the subject of a lawsuit that was later dropped after an out-of-court settlement. On May 26, 2009, Eberhard filed suit in San Mateo County, California, against Tesla and Musk (Chairman and CEO of Tesla) for slander, libel and breach of contract. Musk wrote a lengthy blog post that included original source documents, including emails between senior executives and other artifacts demonstrating that Eberhard was unanimously fired by Tesla's board of directors. On July 29, 2009, a judge in San Mateo County, California, Superior Court struck down a claim by former CEO Eberhard, who asked to be declared one of only two company founders. Tesla said in a statement that the ruling is "consistent with Tesla’s belief in a team of founders, including the company’s current CEO and Product Architect Elon Musk, and Chief Technology Officer JB Straubel, who were both fundamental to the creation of Tesla from inception." In early August, Eberhard withdrew the case, and the parties reached a final settlement on September 21. One public provision stated that the parties will consider Eberhard, Musk, Straubel, Tarpenning, and Wright to be the five co-founders. Eberhard also issued a statement about Musk's foundational role in the company: "As a co-founder of the company, Elon's contributions to Tesla have been extraordinary."

Top Gear

Tesla unsuccessfully sued British television show Top Gear for their review of the Roadster in a 2008 episode in which Jeremy Clarkson could be seen driving one around the Top Gear test track, complaining about a range of only 55 miles (89 km), before showing workers pushing it into the garage, supposedly out of charge. Tesla filed a lawsuit against the BBC for libel and malicious falsehood, claiming that two cars were provided and that at any point, at least one was ready to drive. In addition, Tesla claimed that neither car ever dropped below 25% charge, and that the scene was staged. On October 19, 2011, the High Court in London rejected Tesla's libel claim. The falsehood claims were also struck out by February 2012, with Justice Tugendhat describing Tesla's malicious falsehood claim as "so 'gravely deficient' it too could not be allowed to proceed."

Ecotricity

Tesla reportedly tried to break the exclusivity agreement their charging partner in the UK had for locations along the UK's freeways, Ecotricity replied by taking an injunction against them.

Product issues

Recalls

In May 2009, Tesla issued a safety recall for 345 Roadsters manufactured before April 22, 2009. Tesla sent technicians to customers' homes to tighten the rear, inner hub flange bolts. Using wording from the National Highway Traffic and Safety Administration, Tesla told customers that without this adjustment, the driver could lose control of the car. The problem originated at the Lotus assembly line, where the Roadster glider was built. Lotus also recalled some Elise and Exige vehicles for the same reason.

On October 1, 2010, Tesla issued a second product safety recall in the USA affecting 439 Roadsters. The recall involved the 12V low-voltage auxiliary cable from a redundant back-up system. The recall followed an incident where the low voltage auxiliary cable in a vehicle chafed against the edge of a carbon fiber panel, causing a short, smoke and a possible fire behind the right front headlamp. This issue was limited to the 12V low-voltage auxiliary cable and did not involve the main battery pack or main power system.

Crashes and fire

See also: Tesla Model S fire incidents

On October 1, 2013 a Model S caught fire after the vehicle hit metal debris on a highway in Kent, Washington. A Tesla spokeswoman confirmed the fire began in the battery pack and was caused by the “direct impact of a large metallic object to one of the 16 modules within the Model S battery pack.” The company spokeswoman said that, “Because each module within the battery pack is, by design, isolated by fire barriers to limit any potential damage, the fire in the battery pack was contained to a small section in the front of the vehicle.” The car owner was able to exit the highway, stop and leave the vehicle without injury, as instructed by the onboard alert system. Tesla's share price lost about 12% within two days and decreased the company's market capitalization by about US$3 billion. However, the share price increased about 4.5% three days after the crash.

Tesla claimed that a curved section fell off a semi-trailer and impaled the vehicle with a peak force on the order of 25 tons, creating a 3 inch hole through the quarter inch armor plate under the vehicle. A fire began in the front battery module, one of 16 such modules, but was contained within the front section by internal firewalls. Battery pack vents directed the flames down towards the road and away from the vehicle and that the passenger compartment was undamaged.

The company also claimed that conventional gasoline-powered cars were much more vulnerable to such a situation, because they have less underbody protection. It also noted that the battery pack holds only about 10% of the energy contained in a gasoline tank and is spread across 16 firewalled modules, meaning that the combustion potential is only about 1% as much. Based on U.S. statistics from the National Fire Protection Association, Musk claimed that a driver is "5 times more likely to experience a fire in a conventional gasoline car than a Tesla.

A second reported fire occurred on October 18, 2013 in Merida, Mexico. In this case the vehicle was being driven at high speed through a roundabout and crashed through a wall and into a tree. The NHTSA did not investigate this incident because it occurred outside the U.S. On November 6, 2013, a Tesla Model S on Interstate 24 near Murfreesboro, Tennessee, caught fire after it struck a tow hitch on the roadway, causing damage beneath the vehicle. Tesla stated that it would conduct its own investigation, and as a result of these incidents, announced its decision to extend its current vehicle warranty to cover fire damage.

On November 18, 2013, Tesla released a software update to the air suspension system to increase the ground clearance at highway speeds and requested that the NHTSA conduct an investigation into the fire incidents. On November 19, 2013, NHTSA opened a preliminary evaluation to determine "the potential risks associated with undercarriage strikes on model year 2013 Tesla Model S vehicles." An estimated population of 13,108 Model S cars were part of this initial investigation. Another fire incident took place in Toronto, Canada, in early February 2014. The Model S was parked in a garage and it was not plugged in or charging when the fire started. As of February 14, 2014, the origin of the fire was still unknown. According to Tesla “in this particular case, we don’t yet know the precise cause, but have definitively determined that it did not originate in the battery, the charging system, the adapter or the electrical receptacle, as these components were untouched by the fire.”

On March 28, 2014, the NHTSA announced that it had closed the investigation into whether the Model S design was making the electric car prone to catch fire, after the automaker said it would provide more protection to its lithium-ion batteries. All Model S cars manufactured after March 6 have the .25-inch (6.4 mm) aluminum shield over the battery pack replaced with a new three-layer shield designed to protect the battery and charging circuitry from being punctured even in very high speed impacts. The new shielding features a hollow aluminum tube to deflect impacting objects, a titanium shield to protect sensitive components from puncture damage, and an aluminum extrusion to absorb impact energy. The new shields, which decrease vehicle range by 0.1%, will be installed free-of-charge in existing Model S vehicles by request or during the next scheduled maintenance. According to the NHTSA, the titanium underbody shield and aluminum deflector plates, along with increased ground clearance, “should reduce both the frequency of underbody strikes and the resultant fire risk.”

Board of directors

As of 2014, the Tesla Motors board of directors consists of:

• Elon Musk—Chairman of the board of directors, CEO and Product Architect of Tesla; former President of PayPal, founder, CEO and CTO of SpaceX; Chairman of the board, SolarCity
• Brad Buss—CFO, Cypress Semiconductor Corp
• Ira Ehrenpreis—General Partner, Technology Partners
• Antonio J. Gracias—CEO and Chairman of the Investment Committee at Valor Equity Partners
• Steve Jurvetson—Managing Director, Draper Fisher Jurvetson.
• Harold Kroeger—Mercedes-Benz Vice President, responsible for electrics and electronics
• Kimbal Musk—CEO of Medium, Inc., Co-founder Zip2

See also

• Battery electric vehicle
• Gigafactory
• List of production battery electric vehicles

External links

• Official website
• Template:Official blog
• Tesla Motors official Vimeo page