Tesla Motors in the Fast Lane?

Tesla-saleenElectric car manufacturer Tesla Motors Inc. is back in the news. The company just released the first few renderings of their new Model S, designed by high-performance sports car manufacturer Saleen. This is Saleen’s first-ever electric car. Early reviews are positive−−touting the vehicle’s new front and rear aero kit, huge wheels and ceramic brakes.

In an earlier post Zintro experts discussed the decision by Tesla Motors Inc. to invest as much as $5 billion before 2020 in a ‘Gigafactory’ to mass produce the lithium ion batteries that power their electric cars. Since that post, Tesla Motors Inc. has been on a reported downward slide, losing almost 20 percent of its value (due in part to the industry-wide tech stock selloff in last two weeks).

Zintro expert and vice president of engineering Paul Gifford, Ph.D. joins the conversation about Tesla’s huge undertaking. “While I can appreciate the desire to vertically integrate and have a secure supplier base for a critical component such as batteries, I wonder if Tesla understands the magnitude of the task,” says Gifford. “Based on my experience, they are looking at a capital expenditure of well of $100 million over a project span of several years. The technology and required expertise to design and build a high quality Li Ion battery is not trivial and not readily available in the US. Any early quality problems could completely derail Tesla’s efforts− think of Fisker and A123. In my opinion, Tesla would be far better off to form a strategic alliance with a capable supplier rather than trying to go independent.”

Chief technology officer William Chapin says, “I own an electric vehicle (EV) and I do not believe I will ever buy an internal combustion engine vehicle again. Fuel cell cars may trump EV someday, but the economics of EVs today are overwhelming− not to mention the green benefits. Currently almost all lithium batteries come from China. Battery technology will vastly improve over the next decade. Tesla’s on-shoring will accelerate the process.”

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