Auto critic Lawrence Ulrich
tells us to "get ready to pull the plug" on Tesla motors. Mr. Ulrich says that transmission glitches and the delayed roll out of its model "S" roadster is proof that the demise of Tesla is around the corner:
While the fledgling electrocar specialists haven’t hung a “gone fishing” sign on the front door just yet, it might be just a matter of time. That isn’t changing anytime soon, regardless of how much money company founder and newly appointed CEO Elon Musk can scare up for his pet project. And this group of Silicon Valley geniuses isn’t alone. You can simply add Tesla’s name to the long list of electric car builders that have talked a big game and failed to deliver.
Yes, the production delays and the issues with the model S's transmission have made Tesla motor's customers, fans, and followers like myself a little anxious. We want to see this company succeed and live to be a model for 21st Century American auto manufacturing. One reason I think Ulrich is too quick to write off Tesla motors is the man behind the company - Elon Musk. I've read several interviews and stories about him in magazines such as Fast Company. He may come off to some as arrogant but you can't argue with success - and someone who puts his money where his mouth is. In
his latest interview Musk discloses that has invested $55 million of his personal money in the company, which has raised close to $200 million overall. Musk also listed a string of his accomplishments and successes, which include PayPal, which he co-founded, and
added "I've never had a failure, and I'm not going to add one now." Do you think that this guy would let Tesla Motors fail this early in the game?
Ulrich does expect them to fail, and it is clear that he doesn't think tech geeks belong in the auto industry. He says that starting a real car company takes billions. Well, eventually, yes, it does, but a brief history lesson is in order here. If Mr. Ulrich studied some history of the struggles of Henry Ford he would realize that starting a car company from scratch is a journey of ups and downs, and, as Ford showed, it takes perseverance and dedication to see it through. In fact, Ford's first auto company, The Detroit Automobile Company, failed soon after it was started due to financing issues.
So, while the road has been bumpy and the company is already on CEO #4, there are plenty of reasons to be optimistic. First, Tesla Motors will survive the devastation of our capital markets. The company did have to lay off a lot of its employees and delay its production of its 4 door $70k Sedan, but it was recently able to secure
another round of financing and will soon be on the receiving end of a DOE loan, and may very well see a small slice ($400mm) of the proposed $25 billion auto industry bailout. Secondly - they are rolling vehicles off the production line, and they are still taking orders and
offering test drives for potential customers. These facts seem to be absent from Ulrich's column, and while he does think GM's Volt is more likely to be accepted by consumers than Tesla's pure plug-in vehicle, he is also skeptical of GM having much success with the Volt, even saying that sales of 10,000 units in its first full year would be a "monumental success." I doubt
this guy feels the same way, and I have a strong feeling that if GM can stay afloat and produce the Volt closer to the $30k price point, they will have difficulty producing enough vehicles to meet demand. The Volt is really the future of GM, they are putting all their chips on its success, and if you combine that with the Volt's range extending gasoline/E85 tank, not to mention a federal tax credit of $7500, it is difficult to think that the Volt will be a flop. Forget Ulrich's column where he is trying to hard to be a contrarian, and forget about the demise of the electric car, because the revenge of the electric car is around right around the corner!
