Ford Pays $199,950 Before Taxes for Tesla’s 64th Model X SUV

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Provided by Bloomberg

Ford Motor Co. paid $199,950 — $55,000 more than the sticker price — to buy one of the first sport utility vehicles made by Tesla Motors Inc., according to vehicle registration documents obtained by Bloomberg.

The white Model X is a Founders Series with a vehicle identification number indicating it was the 64th one made at Tesla’s factory in Fremont, California. The vehicle, with Michigan plates, has been spotted recently in the Detroit area. Registration records show that Ford purchased the vehicle March 1. The original owner, a California coin dealer, bought it as part of Tesla’s customer-referral promotion.

Automakers often buy cars made by competitors for road testing and for “tear-downs” to reveal components and materials and how they’re put together. But it’s unusual to pay such a high price — almost $212,000 after Michigan sales tax and title — for such an early model.

“Wow, I hope that investment pays off in some good intelligence,” Michelle Krebs, senior analyst for researcher Autotrader.com, said of the premium Ford paid. “If you’re going to be one of the early buyers, you’re probably going to pay well over list. But that’s significant.”

Krebs suspects other major automakers, such as General Motors Co. and Toyota Motor Corp., are also among early buyers of the Model X. Automakers are looking for ways to make highly profitable SUVs more fuel efficient as they race to meet a federal mandate to average 54.5 miles per gallon by 2025. Ford is investing $4.5 billion in electrified vehicles and will add 13 electric cars and hybrids by 2020.

Future SUVs

“We’re going to definitely see more electrification and light-weighting,” Krebs said. “Those are the things I suspect Ford would be taking special note of as they develop their sport utilities of the future.”

Krebs said she hopes Chief Executive Officer Mark Fields and Executive Chairman Bill Ford — as well as the automaker’s top engineers and designers — get some seat time in the Model X.

“Everybody should be exposed to one of your hottest competitors,” Krebs said.

Tesla’s first Model Xs are limited-edition Founders Series — fewer than 100 of them were made — that typically go to board members and close friends of the company like Google co-founder Sergey Brin. Those are followed by the Signature Series models, which require a $40,000 deposit from customers and start at $132,000. The window sticker price on the all-wheel-drive Model X P90D that Ford purchased is $144,950, including the $10,000 Ludicrous Speed Upgrade that boasts a 0-to-60 miles per hour time of 3.2 seconds.

Original Owner

The original owner of the Model X that was ultimately purchased by Ford was Wayne Skiles, 71, who owns and operates the Carousel Coin & Jewelry Exchange in San Bernardino, California. Skiles owns a Model S sedan and participated in Tesla’s Model S referral program. Customers who referred at least 10 friends to purchase a Model S were able to buy a Model X Founders Series for a base price of $116,700.

“I sold 11 Model Ss. So I got a Founders Model X and immediately flipped it for a profit,” said Skiles in a phone interview. “The car never came to California. I flew to Chicago, took physical delivery of the Model X, and immediately drove it to a dealer in Chicago and sold it.”

Ford bought the vehicle from Corporate Auto of Auburn Hills, Michigan, according to the documents.

“It is a common industry practice among many automakers to buy production vehicles for testing as soon as they are released,” said Ford in a statement. “Sometimes, this means automakers pay more than sticker price to acquire them as quickly as possible.”

Quality Concerns

Tesla officially launched the Model X at a splashy event in late September, years after the vehicle’s early 2012 unveiling. The company announced that it delivered 2,400 of the SUVs in the first quarter as it continues to ramp up production. But early models are not without flaws: Several customers have reported issues with sensors on the “falcon-wing” doors that open vertically. Consumer Reports on Tuesday published a report about quality problems on early models. Tesla shares slipped 2.6 percent on Tuesday to $247.37, paring their year-to-date gain to 3.1 percent.

“We are committed to making the world’s most reliable cars,” said Tesla in a statement Tuesday. “While we have seen some issues with early Model X builds, the issues are not widespread, and we are working closely with each owner to respond quickly and proactively to address any problems. We will continue to do so until each customer is fully satisfied. This commitment is one of the reasons why 98 percent of our customers say they will buy another Tesla as their next car.”

Earlier this month, Tesla issued a recall on 2,700 Model Xs made before March 26 to repair the third-row seats after strength tests done by the automaker found a potential defect. Tesla has advised customers not to let anyone sit in those seats while the car is in use.

Musk has said that the Model X’s unique features were difficult to engineer and relied heavily on parts suppliers. Tesla said this month that Model X deliveries missed first-quarter expectations because of parts shortages stemming from “Tesla’s hubris in adding far too much new technology” to the Model X.

Written by Dana Hull and Keith Naughton of Bloomberg

(Source: Bloomberg)

Tesla Might Use Loophole to get More Buyers a Big Discount

Tesla Model 3 in motion:   
Provided by MotorTrend

Some Tesla owners will be paying much less than others for their electric cars, thanks to tax credits offered by the federal government. A $7,500 credit is available to people buying one of the first 200,000 eligible vehicles made by an auto manufacturer.

As of a few days ago, there were 325,000 pre-orders of Tesla’s new Model 3, each reserved with a $1,000 deposit. Tesla has already sold tens of thousands of other models–roughly 25,000 Model S cars in 2015, for instance–and these too count toward the company reaching the 200,000-sale mark.

At first glance, one might assume that anyone buying a Tesla after the company has already sold 200,000 units would be out of luck and miss out on the $7,500 tax credit. But there’s a loophole. The law actually doesn’t say that the credit expires with 200,001st vehicle sold, but rather at the end of the quarter in which the company hits the 200,000th vehicle. There’s potentially some significant wiggle room here.

According to Automotive News, Tesla could hit that number on the first day of a quarter and then have a few months to pump out as many cars as possible–each eligible for the full $7,500 credit.

Asked by a Twitter user whether this move was on the table, Tesla CEO Elon Musk suggested he would potentially employ it.

With the enormous amount of pre-orders, which amount to $14 billion worth of automobiles, Tesla will have to balance lowering the cost to customers—via the tax credit—with making sure everything runs smoothly. Tesla is already sailing in uncharted waters and is playing a high-stakes game, and a botched car at this level of popularity could scare consumers and push back the electric car’s mainstream adoption for another decade.

Written by Ethan Wolff-Mann of Money

(Source: Time)

The Car Industry has Never Witnessed What Tesla is About to Go Through

People wait in line at a Tesla Motors dealership to place deposits on the electric car company’s mid-priced Model 3 in La Jolla, California, March 31, 2016. REUTERS/Mike Blake
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Most of the best selling cars in America, such as the Honda Accord or Nissan Altima, generally hit around 300,000 in sales every year.

Tesla saw 276,000 people sign-up to buy its newest all-electric Model 3 sedan — in two days.

That massive number, which far exceeded optimistic forecasts, upends traditional thinking about how to sell cars and is expected to spur the auto industry to shift more dramatically to market electric technology to consumers, analysts said.

“We’ve never seen anything quite like this in the auto industry,” said Jessica Caldwell, a senior analyst at Edmunds.com. “It is unprecedented.”

Mainstream car manufacturers have long dabbled in electric technology and some have made a bit of headway in getting such vehicles on the road. But the category was a niche, measured in thousands — not hundreds of thousands — of cars sold.

Tesla now appears to be doing what no other has so far been able to accomplish — sell electric cars to big crowds.

A Tesla Model 3 sedan, its first car aimed at the mass market, is displayed during its launch in Hawthorne, California, March 31. REUTERS/Joe White
Provided by WP Company LLC d/b/a The Washington Post

The company has received nearly as many Model 3 reservations in the past several days as some automakers produce in a single year. Mazda sold 319,000 vehicles in the United States in 2015, according Caldwell. Lexus sold 344,000.

Even if some pre-orders for the $35,000 Model 3 are cancelled — or if Tesla struggles to meet such demand, which many analysts say is likely — the company has shown that consumer appetite for a well-designed car can be robust, even if it is purely electric, said James McQuivey, an auto analyst at Forrester.

“It’s a watershed moment for rethinking vehicles all together. Tesla is putting together the idea a vehicle needs to be cutting edge and cool, more like an iPhone than like a Model T,” said McQuivey. “It’s changing what we mean when we buy a car and what it says about us.”

He added: “Years from now we’ll look back and say Tesla started an electric vehicle revolution. But that’s not because the people buying Tesla thought of it as an electric vehicle revolution.”

Some of the additional comfort consumers may now have with electric technology is due to advancements in the batteries as well as the public infrastructure, analysts said. Drivers generally no longer need to fear running out of juice on the road, stranded without a power outlet. The Model 3, for instance, has a range of 215 miles, similar to that of a rival from General Motors, called the Chevy Bolt, which is priced in the low $30,000s.

Here’s the Chevy Bolt, the main rival to the Tesla Model 3
AP Photo/Paul Sancya File

And the number of publicly-stationed superchargers — which can recharge a battery in a matter of minutes rather than hours — will double to 7,200 by the end of next year, Tesla said. The company also expects its network of car chargers to grow to roughly 20,000 locations by the same time.

Of course, some of the intense demand for the Model 3 may simply be the fruits of Tesla’s public relations strategy, which centers around its charismatic chief executive, Elon Musk. Interest in his newest creation was helped by the critically-acclaimed reviews of the company’s more expensive models as well as flashy presentations that featured his cars’ cutting-edge tech, such as the ability to summon the car, with no one inside, through a smartphone app.

“The Model 3’s huge reservation list should serve as a big wake-up call for the rest of the industry,” said Kelley Blue Book analyst Tony Lim. “Tesla just did a lot of heavy lifting to attract attention to the EV segment. Now is the time for competitive manufacturers to begin leveraging this momentum that Tesla created and building awareness to their fully electric vehicles that have comparable performance and appeal.”

The surge in orders is all the more impressive because most people will be paying an average of $42,000 for the Model 3, Musk said. The $35,000 model is a stripped down version.

By comparison, most of the best selling sedans in the country generally cost $25,000 or less.

Indeed, tens of thousands of customers lined up outside Tesla’s stores to order the car last week, with some camping out in tents to make sure they were among the first to put down their $1,000 deposits — even though Model 3 is not expected to be delivered until the end of next year.

“In regards to the recent news, we’re certainly pleased to see such strong demand for affordable long range EVs,” said GM spokesman Fred Ligouri. “We trust that the initial interest from consumers will continue when the Bolt begins production later this year.”

After the company announced its latest pre-order number on Monday, shares of Tesla jumped about 4 percent in regular trading.

Yet significant doubts linger over whether Tesla can ever manufacture that many cars. “Definitely going to need to rethink production planning,” a giddy Musk tweeted Friday when orders for the Model 3 had hit a mere 198,000. Tesla has never delivered more than 5,850 cars in a month, according to estimates by Inside EVs. And it has experienced delays in delivering its SUV, the Model X.

Tesla on Monday said that its “hubris in adding far too much new technology,” the lack of oversight over its suppliers, and not having enough internal capacity led to a shortage of parts for the Model X.

But Musk has expressed confidence in being able to meet demand for the Model 3, noting last week that Tesla’s Fremont, Calif. factory had produced 500,000 cars per year — albeit under a different owner.

Written by Brain Fung, Matt McFarland of The Washington Post

(Source: The Washington Post)

 

Apple Car Team Hit With Hiring Freeze

Apple Car
Provided by IBT US

Apple’s car project has hit another roadblock. The iPhone maker on Monday put the brakes on hiring more employees for its ambitious electric vehicle program, dubbed Project Titan, according to unnamed sources speaking to AppleInsider.

The staffing freeze came in part because Apple Chief Design Officer, Jony Ive, was unhappy with the progress of the development of the anticipated electric vehicle. That’s despite Apple’s aggressive recruiting which drew in talent from across the automotive industry and electric car rival, Tesla Motors.

Apple in September had previously given the project the go-ahead to triple its team of 600 employees, according to the Wall Street Journal. The move also comes just days after it was revealed that Steve Zadesky, the engineer tasked with leading the vehicle project, is expected to leave Apple for personal reasons.

Together the two developments add up to a growing number of setbacks to Apple’s car, which is anticipated to ship by 2019 at the earliest. Apple had also faced problems finding a manufacturing site and at the time had considered the possibility of partnering with an existing automotive manufacturer, according to a September AppleInsider report. In July, Apple also had exploratory meetings with BMW, in part to learn how it manufactures its i3 electric cars, according to Reuters. But no partnership materialized from the meeting.

The rumored Apple Car isn’t the only new project where Apple has run into snags. While the company was expected to debut its own standalone live TV service in 2015, the subscription service failed to materialize in part due to stalled negotiations between the iPhone maker and content providers, according to the New York Times.

Written by Luke Villapaz of International Business Times

(Source: International Business Times)

China Forecast to Become World’s Biggest Electric Car Market

An employee assembles an electric car along a production line at a factory in Qingzhou
REUTERS/China

China is forecast to become the world’s biggest electric car market this year, with sales estimated at 220,000 to 250,000 vehicles, the official news agency Xinhua said on Sunday, quoting the China Association of Automobile Manufacturers.

Worldwide electric cars sales are expected to increase to 600,000 this year, association deputy secretary-general Xu Yanhua told an industry conference.

China is tipped to surpass the United States as the world’s biggest electric car market, she said, putting the U.S. market at an estimated 180,000 vehicles.

China’s electric-car industry is developing rapidly, but quality and not just quantity should be the focus for the development to be sustainable, Xu said.

Safety and the quality of batteries should be carefully supervised, she added.

The industry saw explosive growth in the past two years, thanks to supportive government policies, including subsidies and tax cuts.

In the first 10 months of this year, sales of electric cars surged 290 percent year-on-year to 171,145, according to the association’s data.

Written by Reuters

(Source: Reuters)

Porsche Plans an All-Electric Car to Rival Tesla

75_Porsche e Mission Frankfurt - 04 copy: The new electric model will be based on the low-slung Mission E concept unveiled in September at the Frankfurt auto show.
Provided by Motoring Research

Porsche committed to making its first all-electric vehicle, taking on Tesla Motors Inc. with a model that’s set to accelerate faster than the German company’s 911 sports car and recharge in 15 minutes.

Porsche green-lighted a 1 billion-euro ($1.09 billion) project to produce the battery-powered sports car, which will be manufactured near division headquarters in Stuttgart and create 1,000 jobs, the Volkswagen AG unit said Friday in a statement. The model, based on the low-slung Mission E concept unveiled in September at the Frankfurt auto show, will enter showrooms at the end of the decade, it said.

“With Mission E, we are making a clear statement about the future of the brand,” Chairman Wolfgang Porsche said in the statement. “Even in a greatly changing motoring world, Porsche will maintain its front-row position with this fascinating sports car.”

The step is part of efforts by Volkswagen, Europe’s largest automaker, to move beyond a scandal over rigged car-emissions tests. Chief Executive Officer Matthias Mueller, who ran Porsche until late September, has vowed to accelerate and widen development of electric cars amid a reorganization that delegates more decision-making to the Volkswagen group’s brands and regional units.

Porsche caused a stir at the Frankfurt show with the four- seat Mission E electric sports-car concept, whose acceleration to 100 kilometers (62 miles) per hour in less than 3.5 seconds beats the 911’s 4.2 seconds to reach that speed. The new electric vehicle will complement a lineup comprising the 911, the smaller Cayman sports car, the Boxster roadster, the four- door Panamera coupe and the Cayenne and Macan sport utility vehicles. Porsche’s high-performance 918 Spyder has been sold out as production was limited to safeguard exclusivity.

The division is set to sell more than 200,000 vehicles for the first time this year, driven by demand for the $52,600 compact Macan. Palo Alto, California-based Tesla, maker of the battery-powered Model S sedan and Model X SUV, is targeting 50,000 to 55,000 deliveries in 2015.

The 600-horsepower Mission E will be designed to drive more than 500 kilometers before needing a recharge, Porsche said. The battery can reach 80 percent of capacity in about 15 minutes, about half the time needed by Tesla’s Model S to recharge for a 270-kilometer driving range.

Written by Christoph Rauwald of Bloomberg

(Source: Bloomberg)