Tesla Motors, one of the original electric vehicle start-up companies and currently the most important player out of the few that remain, recently reiterated its plans to end production of its all-electric sports car, the Tesla Roadster, by the end of 2011. The Tesla Roadster has been Tesla Motors’ main money-maker ever since it was released, with the first hundred units selling out in three weeks and the second hundred in just under a year from its release date.
Why then would Tesla end production of the vehicle that made them a household name in the electric car industry? It could have something to do with Tesla Motors’ primary stated goal as a company, which is not simply to make a profit and allow its CEOs to retire in style, but to increase the variety and popularity of electric vehicles on today’s car market. Selling its cars is only one of the three ways Tesla has declared as a strategy to accomplish this goal.
The other two involve selling the technology in Tesla’s electric motors to other car manufacturers to help them along the EV path, and providing a positive example to the auto industry that it is possible to create electric vehicles that are efficient, high-performance, and popular.
Although the Tesla Roadster has helped rocket Tesla Motors to international fame, possibly the geniuses behind the company have decided that it has completed its course. Tesla Motors is working on something even bigger than the amazing success of the Roadster. There has been a bit of buzz in the recent media about Tesla’s new EV, the Model X.
Although not much is known about the Model X, reports are that it will be in the wildly-popular crossover SUV genre and that the platform will be based on another Tesla model, the Model S. This brings to mind a strategy hit upon by the Big Three automakers, in the 1980s. They each developed a solid vehicle platform, just one was necessary, and began using it as a base for scores of different car models. With just one vehicle platform, these companies produced cars, trucks, SUVs, and crossovers of all shapes and sizes, dropping different body styles on top of the same platform. This strategy allowed them to quickly make a killing on the market.
Possibly, ending production on its Roadster is Tesla’s way of diverting necessary resources to this one-platform strategy. If they can perfect their Model S platform, they will be able to cheaply make many different electric models – SUVs, minivans, sedans, practically whatever they like – using the Model S as a base.
There is just the small matter of being able to keep their heads above water in the six month interim between the end of the Roadster and the beginning of the Model X. Tesla recently announced plans for an issuing of 5.3 million of their shares to the public to help them raise money and survive as an independent company until the Model X takes off. Could this strategy be the key that will finally allow them to reach their company’s goal of making electric vehicles a part of the everyday life of the mainstream consumer?