Lyft raises $1.5 billion, GNA profiled as 25 year anniversary approaches

Newsworthy:  Lyft continues to see a very strong year, now finding that its initial plan to raise $1 billion has gone up to $1.5 billion from a group of investors. Backers include Fidelity Management & Research Company and Ontario Teachers’ Pension Plan. AllianceBernstein, Baillie Gifford, KKR, Janus Henderson Investors, and Rakuten. CapitalG led the billon-dollar round. The ride-hailing firm’s valuation is now at $11.5 billion. Alphabet, the Google parent company, played a key role in bringing in more investors for Lyft during October – after pulling away from financial support for arch-competitor Uber and filing its intellectual property theft lawsuit affecting its Waymo division……………..

A Morgan Stanley analyst expects that Tesla Inc. could lose attention from CEO Elon Musk, who may be devoting more time to his SpaceX intergalactic travel company. Morgan Stanley’s Adam Jonas wrote in a report Tuesday that we may see more of an alliance between Tesla and SpaceX in the future. “Investors widely expect Elon Musk to, over time, devote increasing amounts of his time and talents to SpaceX, raising the very real question of who could replace him at Tesla,” Jonas wrote. “A combination of efforts between the two firms could address this important issue.” The two companies will play on the alliance during an commercial in January. A SpaceX rocket will carry a Tesla Roadster sports car owned by Musk as payload when it travels toward Mars………….

Gladstein, Neandross & Associates was profiled in a newsletter article this week by California Natural Gas Vehicle Coalition. Along with putting on ACT Expo and other clean transportation events, GNA has played a key role in raising millions of dollars in grant funding for clients during its history. The consulting firm will celebrate its 25 year anniversary next year. The company has effectively supported the use of renewable fuels, and has provided research and analysis for all parts of the clean transportation industry. GNA also does emissions modeling, assists with technical fleet planning, monitors government affairs, and provide communications and media services to clients, CNGVC said.

GM ready to roll out profitable EVs by 2021, Will Elon Musk’s superstardom be enough for Tesla to overcome hurdles?

Newsworthy:  America’s largest automaker is poised to solve the quandary automakers face on making profits building and selling electric vehicles. General Motors CEO Mary Barra yesterday told investors at the Barclays Global Automotive Conference in New York that the company in 2021 will be launching a new, flexible platform for electric vehicle launches that will bring down costs and increase profits. The new EV platform will accommodate multiple sizes and segments, to be sold by different GM brands in the U.S. and China, she said. A new battery system will bring down costs 30% cheaper than the battery pack used in the Chevy Bolt, Barra said. The automaker will be building at least one million EVs a year by 2026, with most going into China to comply with new energy vehicle regulations. Last month, GM said it planned to launch 20 new electric vehicles by 2023, but did not provide details………… Clean Energy Fuels Corp. announced yesterday that Dallas Fort Worth International (DFW) Airport awarded Clean Energy a renewable natural gas (RNG) fueling contract for the airport’s vehicle fleet with its Redeem brand of RNG. The airport sees using the clean fuel as a way to potentially reduce its fleet emissions by about 70%…………… Daimler will be entering the electric bus market by end of 2018 with the beginning of series production of the all-electric Mercedes-Benz Citaro E-CELL. It will use modular lithium ion battery packs that can be tailored to each customer. The company thinks that by 2030, 70% of all newly-registered urban buses will have emissions-free drive systems.

State of the Company:  It’s been a year of mega-celebrity status for Tesla CEO Elon Musk – being recognized more than Warren Buffet, Jeff Bezos, Mark Zuckerberg, and Richard Branson combined. He’s been on the cover of Rolling Stone this month, as head of both SpaceX and Tesla, reaching rock star status. People Magazine was interested enough in his breakup with actress Amber Heard, who finalized her divorce from actor Johnny Depp in January. “I was really in love, and it hurt bad,” Musk said.

Musk continues to tease fans over the Thursday night unveiling of the electric semi-truck. The latest tweets have said it will “blow your mind clear out of your skull and into an alternate dimension.”

Reality has kept him out of the alternate dimension, with Tesla just announcing its largest quarterly loss ever and a three-month Model 3 manufacturing delay.

There’s also been an employee lawsuit over the working environment at its Fremont, Calif., production plant. An African-American employee is seeking a class-action lawsuit against the company, where he calls the production floor a “hotbed for racist behavior,” where the suit claims black workers regularly face harassment.

The Tesla chief continues to take on extra projects like the Boring Company digging up an underground train tunnel in Los Angeles, developing the Model Y electric crossover, Autopilot software, and the Buffalo, N.Y.-based solar panel factory – all the while directing SpaceX flights to Mars and working to establish Tesla’s role China.

The company plans to leap five-fold in production by the end of next year — from about 100,000 electric vehicles expected to be produced this year to 500,000 next year. That will be led by the new Tesla Model 3. The upcoming Model Y crossover is expected to also play a key role in the company hitting its second grand target — producing 1 million new vehicles per year starting in 2020.

To get there, Tesla has to make it through a rite of passage on a few pivotal challenges:

  • Achieving profitability for the first time
  • Scaling up production 10 times within three years
  • Opening up more vehicle manufacturing and battery production plants
  • Worker relations as union organizers put on the pressure
  • Establishing a presence in China and Europe

Musk’s superstar status may not be impressive enough to maintain strong relations with major investment bankers. Tesla’s stock price has taken a major hit this year, and investors wonder if the company will need to make another junk-bond offering. Model 3 production and delivery will need to be steady to meet the expectations of most investors, who count on the Model 3, and later on with the Model Y.

 

For Today: Tesla recalling Model X electric SUV, Richard Branson investing in Hyperloop One

Tesla Model X recall:  Tesla is recalling about 11,000 Model X electric SUVs to correct a problem in the second-row seats. For the Model X units manufactured between Oct. 28, 2016, and Sept. 1, 2017 with a second row seat that folds down flat, Tesla will be correcting an error that could mean the second row seats would move forward in a crash. The problem stems from incorrectly adjusted seat cables and was discovered through internal testing. It only affects about 3% of those vehicles. The electric automaker is taking on the voluntary recall through a 10-minute procedure done by mobile service operators. The company hasn’t received reports of any issues or accidents related to the problem; customers were to be alerted starting yesterday.

What Ford learned from workplace charging:  Ford Motor Co. will be tripling its electric vehicle charging stations available to its employees in North America from 200 to 600 chargers over the next three years. The first 200 have been in place for three years and have been the source of data on charging habits used by the automaker in its electrification strategy. Ford reported that access to workplace charging appears to be crucian for EV owners and can influence their purchase decisions. Bringing more workplace charging will be part of mass market adoption of EV technology for Ford and the overall industry, the company said. Through early August, Ford’s charging network had provided about 2 million miles of electric driving to its employees.

VW electric trucks and buses:  Volkswagen Group’s truck and bus division will be investing about $1.7 billion into new technology to support battery electric commercial vehicles targeted at urban markets with growing concern over poor air quality. Andreas Renschler, head of the unit, said Wednesday that the investment will go into electric drivetrains, autonomous systems, and cloud-based software. The new technology will end up in systems used by the company’s U.S. truck affiliate, Navistar International. In Europe, it will go to the company’s MAN and Scania nameplates for all-electric buses that will come to European cities next year, he said. That goes with offerings to bus operators that include biodiesel, hybrid systems, and natural gas vehicles.

Clean vehicle jobs:  A new interactive map shows that the Midwest, Northeast, and California have been at the heart of job creation and economic growth in clean vehicles. As the federal standards for fuel economy and emissions are under review, the BlueGreen Alliance Foundation issued a study looking at what’s happened since the federal standards were finalized five years ago. The map highlights advanced vehicle, component, and material manufacturing facilities, and jobs across the U.S. It was done to provide a local-level view of innovation across the industry that supports energy security, economic growth, and global competitiveness.

California supports more clean vehicle programs:  On Tuesday, California Gov. Jerry Brown signed several bills to strengthen California’s zero- and near-zero-emission vehicles. One of them, A.B.739, requires at least 15% of specified heavy-duty vehicles newly purchased by state agencies to be zero emission vehicles beginning in 2025; and at least 30% of those vehicles to be ZEVs beginning in 2030. S.B.498 will require at least 50% of the state’s light-duty vehicle fleet to be ZEVs by 2025, up from the current goal of 25% by 2020. The bill also requires the California Air Resources Board to develop policies and programs that will increase ZEVs in private-sector fleets. Several other assembly bills were signed into law, including one that allow certain clean vehicles to access high-occupancy vehicle lanes, and another authorizing local jurisdictions to dedicate on-street parking spaces for electric vehicle charging.

USPS going electric:  The U.S. Postal Service is getting ready to bring in electrified delivery trucks, according to photos received by Trucks.com. One of the publication’s readers sent in photo of a road tests being done about 30 miles northwest of Washington, D.C., of a USPS badged mail delivery truck likely coming from Workhorse Group and truck body manufacturer VT Hackney. They’re among five entries into the USPS’ Next Generation Delivery Vehicle Program. Workhorse confirmed it was their truck in a tweet Monday after the story was first published in Trucks.com. Workhorse will supply the powertrain and chassis, and VT Hackney will build the body if they win the contract with USPS.

Richard Branson investing in Hyperloop One:  Hyperloop One has gained funding from billionaire Richard Branson and will be changing its name to reflect it. The company announced Thursday it will be renamed Virgin Hyperloop One, and it followed a significant but undisclosed investment by the Virgin Group founder. Based in downtown Los Angeles, Hyperloop One comes from a concept released a few years ago by Tesla and SpaceX CEO Elon Musk. The transport system will carry passengers and cargo in pods through tubes at speeds of more than 250 miles per hour; and that could eventually go as high as 750 miles per hour. The company has been testing its pods in Nevada. Branson’s Virgin Galactic has been setting up office space in Southern California and will be directly competing with SpaceX in the space transport business.

For Today: Elon Musk gets Whitehouse greenlight for east coast tunnels, Chrysler only marketing Pacifica as a plug-in hybrid in California

Tesla CEO gaining support for fast train tunnels:  Elon Musk’s The Boring Company received approval from the White House to build a series of tunnels that could run from New York City to Washington, D.C. “Just received verbal govt approval for The Boring Company to build an underground NY-Phil-Balt-DC Hyperloop. NY-DC in 29 mins,” he tweeted yesterday. He later tweeted out that formal approval with the Trump administration is still needed, but after discussions they’ve had, he’s confident the project will be able to move forward. That could bring fast Hyperloop-like trains to Los Angeles and important transport routes on the east coast.

Freight haulers ask feds to keep SmartWay:  Major freight shippers, including Walmart, are asking U.S. House and Senate appropriations committees to restore funding for the voluntary SmartWay clean trucking program. Like several clean transportation programs, it had been cut from the Trump administration’s 2018 federal budget proposal. SmarWay has been working with freight haulers to save an estimated eight billion gallons of fuel and significantly reduce diesel trucks’ emissions of NOx and carcinogenic fine particulate matter. The coalition of companies said in a July 14 letter that the program has saved companies about $27.8 billion in fuel costs since it started in 2004.

Chrysler Pacifica plugging into California:  Chrysler is marketing its Pacifica minivan as a hybrid – and not what it really is, a plug-in hybrid – in every state except California. The Fiat Chrysler Automobiles division is concerned that most U.S. consumers will be confused or concerned about having to charge for the first time and be subject to range anxiety. Plugging in is less of a worry in California, which has made up about half of U.S. plug-in vehicle sales. Still, it is possible to occasionally see Chrysler billboard ads in the state that only identify the Pacifica as a hybrid.

For Today: Lux study on Trump’s impact on energy, Volkswagen claims it can beat Tesla Model 3 price by $8K

Lux study on impact of Trump administration:  No matter what the Trump administration’s agenda becomes on energy and environmental issues, the market is filling some of that void, according to a Lux Research analysis paper. Lux examined Trump’s America First Energy Plan and found that renewables and energy storage are well positioned to continue seeing strong growth. State-level policies have been drivers and will continue. Renewable fuels are most vulnerable to Trump’s agenda. “With uncertainty looming and the administration continuing to consider oil-and gas-friendly policies, Trump’s decision to remove the renewable fuel obligation could alter a decade-old ethanol industry,” the report said.

Despite the administration’s political agenda, the president’s actual influence will have an overall moderate impact in the U.S. energy landscape, the paper said. That seems to be the case with plug-in electrified vehicles sales in the U.S. and two other key global markets – demand is up even if federal government support may go away and the Trump administration has backed away from supporting the Paris climate accord. According to yesterday’s Green Auto Market Extended Edition, U.S., plug-in hybrid sales were up about 44% for the first half of 2017 versus that time period in 2016. Battery electric vehicle sales were up 29.2% for that period. Europe is up 27% in plug-in vehicle sales for this year (through May), with plug-in vehicle share at 1.4% of new vehicle sales during that period. In China, “new energy vehicle” sales, aka plug-in vehicle sales, reached about 195,000 sold in the first half of the year, up 14.4% year-over-year. June saw a real rebound in the China market, which had been down earlier in the year. June sales hit about 59,000 units sold, up 33.0% year-over-year. PEV sales made up about 2.7% of new vehicle sales in China during June.

Musk on AI and state sales bans:  Tesla CEO Elon Musk warned a meeting of U.S. governors on Saturday that government regulation of artificial intelligence is needed because it’s a “fundamental risk to the existence of human civilization.” Musk has taken a cautious approach to the AI question in recent years, using his experience with SpaceX missions and developing automated Tesla vehicles as reference. He addressed questions on space travel, self-driving cars, and solar power, at the summer conference of the National Governors Association in Rhode Island. He also brought up the controversial topic of states getting rid of laws blocking Tesla from selling its cars at corporate stores instead of through a franchised dealer network.

VW versus Tesla:  Volkswagen is tapping into its mass production, economies of scale advantage to sell its ID concept vehicles at a much cheaper price than the upcoming Tesla Model 3. VW’s Chief of Corporate Strategy Thomas Sedran said in an interview with German site Automobil Produktion that the starting price for an ID will be down to $27,000 before incentives – $8,000 cheaper than the $35,000 Model 3. That will still take a while as the German automaker’s ID portfolio is still in the early development phase; it will take a few years for the first one to show up at dealerships.

For Today: Hyperloop One ready to move forward, OPEC and oil companies see electric cars taking away oil demand

Hyperloop One test:  Hyperloop One is getting ready to test out its 28-foot-long pod in Nevada in the next few weeks, the startup said. Inspired by Tesla CEO Elon Musk in 2013, Los Angeles-based Hyperloop One is ready to take the pod transport through vacuum tubes in what could someday be a very fast ride between San Francisco and LA. The goal is to reach 250 miles per hour, which would shorten the car trip quite a bit.

Automated trucks:  Speakers at the Automated Vehicles Symposium in San Francisco on Wednesday expect that autonomous heavy-duty trucks will on the road in as little as three years – sooner than expected for light-duty passenger vehicles. Going to fully autonomous mode will take a while longer for commercial trucks, as it will for cars. Trucking companies are fascinated with the technology for its potential to make truck transport safer, improve customer service, and to help drivers become more productive. “A lot of the technology is driver assist or safety enhancement”, said Max Fuller, executive chairman of U.S. Xpress, a major U.S. trucking company. “If you look at [autonomous vehicles], it will come in pieces.”

Electric cars and oil demand:  Bloomberg New Energy Finance released a study today forecasting that electric cars will be reducing oil demand significantly by 2040. That comes from forecasts presented by OPEC, Exxon Mobil, and BP. OPEC quintupled its forecast for sales of plug-in sales, while Exxon Mobil, BP, and other oil producers also revised up their outlooks in the past year.

For Today: Musk taking first Model 3 as birthday present, PEVs offer way for automakers to hit fuel economy target

Musk gets birthday present: Tesla started production of the Model 3 on Friday, and CEO Elon Musk will be taking the very first one off the line. Musk tweeted on Saturday with two photos of the first model to roll off the production line. Tesla board member Ira Ehrenpreis had been the first make a down payment on the Model 3, but had turned over his rights to the first production model to Musk as a birthday gift. Musk, who turned 46, had previously purchased the very first Tesla Roadster and Model X, but not the Model S. The company is scheduled to deliver 30 of these units by the end of this month and aims to reach 20,000 units per month by December.

Oregon offers rebates:  Oregon is offering a plug-in vehicle incentive similar to California’s. Cars with batteries up to 10 kilowatt-hours, will receive a $1,500 rebate and electric cars with larger batteries will get $2,500. It’s part of a larger $5.3 billion transportation funding. It took the state a few years to get there, with purchase rebates having failed a few times in previous legislative sessions. This time, $12 million was included for rebates of six years for all-electric and plug-in hybrid vehicles with a base price of $50,000 or less.

Hitting the federal mpg standard:  Plug-in electrified vehicles may be the way that automakers hit the federal standards for corporate average fuel economy, according to a new study. A team from the University of Central Florida and MIT has found that the federal fuel economy standard offers an effective policy solution that will increase adoption of PEVs. That will be the case whether implemented alone or with another policy such as government incentives, according to the study. The current standards determine an automaker’s compliance based on annual production volume-weighted average fuel economy of the automaker’s fleet of total vehicles manufactured. The Trump administration is expected to wait until the original deadline of April 2018 to finalize the second phase of rules through 2025; and will probably soften the standards. Selling much higher volumes of PEVs would resolve that problem; automakers will be motivated to build a wide selection of PEV models and market them effectively to hit federal targets, even if softened by the Trump administration.

This Week’s Top 10: September plug-in sales, $200K ticket to Mars with SpaceX

Here’s my take on the 10 most significant and interesting occurrences during the past week…….

  1. 2016 Chevrolet VoltSeptember sales: The Chevy Volt continues to be the best selling plug-in hybrid, by far, on the market with 2,031 units sold in the U.S. during September. At 16,326 Volts so far this year, there’s a thin chance it could catch up to 2013’s 23,094 units sold, if not also 2012’s 23,461. The Volt redesign seems to have taken off very well. The all-electric Nissan Leaf saw its first increase in year-over-year sales since December 2014. In September, there were 1,316 Leafs sold, a 5.5% improvement over September 2015. Tesla Motors just reported its third quarter deliveries, which were up 70% over the second quarter. Of the 25,185 units sold and delivered during the third quarter, 15,800 were Model S and 8,700 were Model X. For September sales, one estimate shows the Model S and Model X well ahead of the Chevy Volt and all other plug-ins sold in the U.S.
  2. Ticket to Mars: Elon Musk gave a speech last week topping the Gigafactory and Hyperloop announcements. As SpaceX chief, he spoke last week at the 67th annual International Astronautical Congress in Guadalajara, Mexico. Once the company’s Interplanetary Transport System is fully operational, he estimates that a person will be able to travel to Mars for about $200,000 – much cheaper than the $10 billion it would cost you to buy a rocket that you fly to the red planet. One hundred passengers will ride to Mars with 42 Raptor engines, carbon fiber fuel tanks, reusable rockets, and other features. Musk was making the pitch to gain financial backing from current client NASA and others attending the event.
  3. Uber and Otto: Self-driving truck startup Otto talked about its strategy now that ride-hailing giant Uber owns the new company. Uber plans to make Otto the leader in self-driving truck technologies in freight hauling. The ride-hailing company has started the process of selling services directly to shippers, trucks fleets, and independent truck drivers. Otto is expanding its fleet from six to 15 trucks, and is bringing in independent truckers to manage the trips. Those freight hauling trips will start next year with deliveries to warehouses and stores. Uber made the acquisition in August for an estimated $680 million. It ties into Uber’s strategy of developing self-driving car systems through its Pittsburgh test drive project.
  4. Lyft drivers getting Bolts: Lyft drivers will be the first to receive key fobs for their Chevy Bolt when it arrives at dealerships later this year. “Drivers on the Lyft platform will be receiving Bolts to drive first,” said Emily Castor, Lyft’s director of transportation. Castor spoke last week at the World Mobility Leadership Forum at Metro Airport in Detroit. Ride-hailing service Lyft links riders with about 315,000 contractor drivers in about 200 U.S. cities. General Motors and Lyft created the Express Drive rental program for Lyft drivers earlier this year after GM’s $500 million investment in the company. Express Drive offers Lyft drivers the opportunity to rent the GMC Terrain, Chevrolet Equinox, Malibu, Volt and, by the end of this year, the 2017 Bolt EV.
  5. First driver’s license for autonomous vehicle: Nevada last week granted the first autonomous vehicle-related driver’s license to Sam Schmidt, a former race car driver and The state granted Schmidt a license to drive a semi-autonomous test car on public roads under restricted conditions. Earlier this year, Schmidt drove more than 150 mph in the Arrow SAM Car during demonstration laps at the Indy 500. Arrow Electronics designed the SAM car for Schmidt in 2014, and they worked together to get the state to revise regulations allowing Schmidt to drive on roads in addition to race tracks. Schmidt used to be a race car driver, but lost his ability to drive years ago during a near-fatal speedway crash. Schmidt is able to control the car, a modified Corvette Z06, using his voice, head, and breath to steer, accelerate, and brake.
  6. No price cutting: Tesla CEO Elon Musk sent out an email to employees last week asking them to stop offering discounts to drive up sales numbers for the Model S and Model X. Discounts are appropriate for when for Tesla vehicles that had been used in test drives or that were damaged before delivery, he said. Musk asked them to stay away from price cutting and to adhere to a sales approach he called “fundamental to our integrity.”
  7. USPS test project: The U.S. Postal Service has identified six “prime suppliers” that will be producing 50 prototype vehicles from which a Next Generation Delivery Vehicle (NGDV) will be chosen. The companies are: AM General, Mahindra, Oshkosh, Utilimaster, VT Hackney, and Karsan. The new prime suppliers’ contracts total $37.4 million in business. It may lead to an electric or hybrid design, according to recent reports and USPS.
  8. DMV supports fully autonomous: The California Department of Motor Vehicles revised its recommended policy on fully autonomous vehicles. While the agency had supported having steering wheels and pedals in autonomous vehicles for drivers to take over in case emergency conditions came up, that policy recommendation has changed. DMV revised draft regulations that the most advanced self-driving cars would no longer be required to have a licensed driver if federal officials deem them safe enough.
  9. Report on mobility services: Navigant Research released a report examining trends associated with emerging mobility services most likely to influence the future transportation market, including automated systems and shared vehicle services. A nexus of trends related to emerging mobility services is converging to influence the future transportation market: autonomous vehicles, the consumer shift, multimodal integration solutions, and urban versus rural/suburban population distribution. From parking habits to the number of vehicles in operation, these trends and related factors will have far ranging effects on the transportation landscape, according to Navigant Research.
  10. Testing e-trikes: UPS is testing electric-assist cargo tricycles and several other clean transportation and alternative fuel options in various scenarios around the world as part of a “rolling laboratory” project. The company is looking to resolve a serious challenge: how to keep up with the boom in e-commerce while at the same time reducing its impact on the environment. The e-trikes have a range of 21 miles and a top speed of 15 miles per hour and ample cargo capacity, They’re ideal for narrow European streets, but UPS customers in Portland, Ore., will soon see drivers pedaling around their neighborhoods in a similar model.

Snapshot of where things really stand with Tesla Motors

Elon Musk on investor conference callAs seen in Green Auto Market and automotive media in general, Tesla Motors can seize center stage for periods of time and then do it again. In the past few years, other automakers (like Subaru, Hyundai, and Kia) have surged forward in sales and market presence; but their brand imaging pales in comparison. That being said, here’s my latest reality check on Tesla’s performance:

  • Stock prices have dropped. The share price closed at $151.04 on Friday after having hovered around the $200 per share mark for several weeks. The high point reached in the past year was $286.65 per share. The fourth quarter earnings report last week was strong enough to get shares to jump nearly 6% to 10% on Thursday, but they declined again on Friday. The upcoming launch of its Model 3 and strong results from its energy storage division have helped, but analysts and large investors now think that prior price targets needed to be adjusted downward. Tesla’s market cap is now at about $20 billion.
  • Company has yet to be profitable. On Wednesday of last week, Tesla posted its eleventh straight quarterly loss. Last year at the Detroit Auto Show, CEO Elon Musk said it won’t be until 2020 that the company becomes profitable (on a basis that includes charges and executive compensation). During last week’s investor conference call, Musk told investors that the carmaker will start turning profits this year. The company is forecasting a 60% to 80% increase in vehicle sales this year and promised to turn a profit on an adjusted basis. The company also reported that it planned $1.5 billion in capital spending this year but had just $1.2 billion in the bank – but investors where enthusiastic enough to drive up stock prices up to 10% that day in after-hours trading. How does this come to be? “Investors look at Elon, and some say he’s a promoter or that he steps over bounds with what he promises,” said Robert W. Baird analyst Ben Kallo. “But his track record is pretty good. That’s why he still attracts the type of institutional investors he does.”
  • By the numbers. Tesla said net loss nearly tripled to $320.4 million, or $2.44 per share, in the fourth quarter from $107.6 million a year earlier. The cost of launching its Model X crossover has taken its toll. The company will be spending $1.5 billion on machinery and equipment to manufacture the Model 3, and to enhance cell production at the Gigafactory.
  • Status of Gigafactory: Tesla Motors has been criticized in the media lately for falling way behind on its commitment to build advanced lithium ion batteries at its Nevada plant – and to support the local economy and hire more workers. Musk scoffed at the recent news coverage, and once again defended the $1.3 billion tax incentive package the company was awarded by Nevada lawmakers. Tesla and partner company Panasonic have started up the one-million square foot factory near Reno, and permanent jobs have been created in line with what the companies reported would be in place by now. However, the job creation number is significantly smaller than what state-hired economists projected during the 2014 special session to pass the tax breaks. Musk said the Gigafactory is “moving at a very good pace.”
  • Competitive pricing on Model 3: Tesla will begin taking pre-orders of its Model 3 next month, which will be selling for $35,000. With incentives, that could drop down to as little as $25,000 in its closing price. That will be price competitive with the upcoming Chevrolet Bolt battery electric car, which may open at $30,000 before incentives. Tesla has managed to do very well selling its Model S in the $80,000 to $90,000 price range; and its newly launched Model X crossover is starting at around $80,000. Tesla’s creative leasing programs with bank partners such as Wells Fargo have helped close sales transactions. Eyes will be on Tesla on March 31 when it reveals the design and details of the upcoming Model 3.
  • Performance in 2015: Last year did look good in sales performance for Tesla with revenue up 59% over 2014. Model S sales increased 35% in the fourth quarter compared to Q4 2014. The company set a record for deliveries in the fourth quarter even though gasoline prices were way down. To better service its electric cars, Tesla will be opening about 80 retail locations and service centers and adding 300 more Supercharger locations.
  • Energy storage: During its quarterly report, the company announced that its Energy division has installed its first Powerwall home-battery storage units in the U.S., Australia, and Germany.

 

 

Tesla-Orama!: The latest on the luxury electric sports carmaker

  • Tesla storeCEO Elon Musk posted a comment on the Tesla Motors blog that the Model S drive unit warranty has been increased to match that of the battery pack. The 85 kWh model now has an eight year, infinite mile warranty on both the battery pack and drive unit. There’s no limit on the number of owners during that period.
  • Tesla Motors is now offering a replacement battery for the 2008-2012 Tesla Roadster, its first production electric cars. Musk said that the Roadsters range will be increasing from its original range (rated at 245 miles by the US Environmental Protection Agency) to about 400 miles. The company hasn’t offered prices, schedules, and any other information yet.
  • While staff at Consumer Reports initially fell in love while driving the Model S, the honeymoon has waned. One driver had the center screen go blank at a little over 12,000 miles, and Tesla had to repair it. Other quirks needed to be ironed out and it followed a report by Edmunds.com; the Edmunds team recently reported problems with its Model S test drives that included replacing the main battery pack after incidents in which the car stalled; a frozen touchscreen; a creaky steering wheel; and difficulties opening the car’s sunroof.
  • California may exempt Tesla Motors from some of its toughest environmental regulations as part of an incentive package to get the “Gigafactory” set up in the state. Tesla may get waivers on some of California’s legendary and controversial California Environmental Quality Act (CEQA), which is alarming to some environmentalists. The pitch by the governor’s office also includes tax breaks that could be worth up to $500 million, or about 10% of the project’s total costs. California is working hard to compete with Nevada, Arizona, New Mexico, and Texas to bring the Gigafactory within its borders.
  • Saleen Automotive is best known for making customized American muscle cars from the Ford Mustang, Chevrolet Camaro, and Dodge Challenger. The company just unveiled its first electric car, the 4Sixteen, based on the Tesla Model S. Founder and CEO, Steve Saleen, says it has him sold on electric cars.
  • Tesla stock closed at $259.94 yesterday. The price range has gone from $116.10 to a high point of $267.26 during the past year. The Consumer Reports coverage doesn’t seem to have hurt stock prices.