Modi visits Tesla Motors -- Will its E Smart Car make its bow in India?
New Delhi, September 27, 2015
The Narendra Modi government is committed to promoting alternate fuels and green technologies as part of its long term strategy to ensure sustainable development in keeping with the millennium goals, post 2015 UN development agenda and the latest 2030 Agenda.
So, one should understand the underlying significance of why Mr. Modi is visiting the Tesla factory in San Jose in California, better known for its IT software firms in the Silicon Valley.
It is apparent that the team that works with Prime Minister Modi has done its home work well on green automobile technology. Mr. Modi is tech savvy and is far ahead of his peer group in his vision for the future. Consider this, Tesla is ushering in a quiet revolution in the United States and elsewhere in green technology . It has got over the problems that a normal battery car usually faces -- space, size, style and speed.
Usually, battery-operated cars, like Reva, for instance, are known to be small, unconventional in looks , lacking in speed, considered a snail’s pace by most automobile enthusiasts, and not much boot space as the available room is taken by batteries.
But Tesla Motors has disproved all of this – it has the style and elegance of a BMW or an Audi, large boot space, stylish interiors and is an intelligent car, completely controlled by an onboard computer with a 17-inch large screen to view the actions. No wonder it is gaining in popularity not only in the USA but also the world over. They have now a Netherlands facility in Europe. Don’t be surprised if Modi gets Tesla to open a facility in India and a manufacturing centre in his home state of Gujarat.
If they do, India would be able to solve much of its automobile pollution – the only inhibiting factor is the price as it is upwards of US$ 35,000 for a small car and US$ 123,000 to US$205,000 for the bigger ones (which means in Indian rupee terms it is about Rs 22.75 lakhs excluding duties for the small car and Rs 79.95 lakhs to Rs 1.31 crore for the bigger versions). It’s a stiff price to pay for an E Car.
But, consider this; it’s a one-time price for a car. No gas filling, no petrol/diesel price, no maintenance charge, no servicing charges . It’s the car of the future.
What made Tesla famous in the world? Look at the pictures of its interiors and its size – it can not only give the latest in the series of BMWs and Audis a run for their money in sheer stunning looks, but has sensational performance for a battery-operated car, say its initial batch of users. It can race upto more than 100 miles or 160 kms an hour in city driving.
Here is the growth story of Tesla Motors, Inc. It was basically incorporated as an American automotive and energy storage company that designs, manufactures, and sells electric cars, electric vehicle powertrain components, and battery products.
It’s 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 history, claim its sponsors.
Tesla Roadster is the first fully electric sports car that attracted global attention. Its second offering was the Model S, a fully electric luxury sedan, and its next two vehicles, the Model X and Model 3, set the trend for its assembly lines. Global sales of Model S passed the 75,000-unit milestone in June 2015.
Tesla also markets electric powertrain components, including lithium-ion battery packs to automakers including Daimler and Toyota.
Tesla CEO Elon Musk says he envisions Tesla Motors as an independent automaker, aimed at eventually offering electric cars at prices affordable to the average consumer Pricing for the Tesla Model 3 is expected to start at US$35,000 before any government incentives and deliveries are expected to begin by 2017.
In 2015, Tesla announced the Powerwall, a battery product for home use.
Tesla Motors is named after the 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.It unveiled the Tesla Model S all-electric sedan on March 26, 2009. In December 2012,
Tesla employed almost 3,000 full-time employees. By January 2014, this number had grown to 6,000 employees.
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.
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-reinforced polymer 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.
Musk maintained, since his induction into the company, that Tesla's long-term strategic goal was to create affordable mass market electric vehicles. He received the Global Green 2006 product design award and the 2007 Index Design award for his design of the Tesla Roadster.
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. He 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 and 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.
By January 2009, Tesla had raised US$187 million and delivered 147 cars. Musk had contributed US$70 million of his own money to the company. 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.
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 which, according to Tesla Motors, are redundant because of the advanced thermal management system and a protective intumescent chemical in the battery pack. This chemical is intended 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 per kWh. Currently, Tesla Motors charges US$10,000 more for the 85 kWh battery than the 60 kWh battery, or US$400 per kWh. At US$200 per kWh, the battery in the 60 kWh Model S would cost US$12,000, while the 85 kWh battery would cost US$17,000. The price increase is closer to US$ 8,000, as supercharging is included in the higher price. It is a US$ 2,000 option for the 60 kWh version.
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 0.25 in (6 mm) aluminium-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. Tesla's first battery swap station is located at Harris Ranch, California, and is operational as of December 22, 2014.
T. N. Ashok is a freelance journalist based out of Delhi, writing on finance, economics, and commerce. Automobiles are a passion with him and he writes extensively on the latest trends in the industry.
A former Economics Editor with wire service Press Trust of India (PTI) and contributor to leading economic journals and newspapers, he has travelled widely. He has also done a brief stint as a corporate communications professional with leading multi-nationals.