Hertz has announced that it will sell off roughly 30%, or 20,000 vehicles, of its EV fleet.  The move came after it announced a scale-back from its original goal of electrifying 25% of the rental fleet. Hertz's original goal was to acquire 100,000 Tesla and 65,000 from Polestar over five years. Teslas make up roughly 80% of the Hertz EV fleet. At the time of this writing, there are 631 Teslas for sale on Hertz's website and only 40 EVs from other brands.

In a statement, Hertz cited substantially higher than average repair costs "for EVs" with extended wait times for parts availability. Additionally, Hertz reported that manufacturers' new lower retail prices hurt the resale values of the existing fleet, leading to substantial depreciation losses. Hertz is expecting to take a $245 million write-down on the vehicles, or an average loss of $12,250 per vehicle. Unlike other brands, Teslas purchased by Hertz were purchased at the same retail price the general public pays without any volume discount.

Our take

While many in the anti-EV crowd see this as an indictment against EVs, it is really more of an indictment against Tesla.  Tesla's use of the Gigapress, while revolutionary technology, means that even minor collisions can be catastrophic to the vehicle. But this technology is coming to other brands as well. General Motors has purchased a Gigapress manufacturer and Volkswagen is planning on using Gigapress in their future vehicles. Additionally, Tesla does not have a deep reserve of spare parts, leading to long wait times for repairs. Tesla's erratic pricing moves have also made it difficult to accurately predict resale value of their vehicles.  For an individual, it is an annoyance but for a corporation that buys 100,000 vehicles, it can cost hundreds of millions of dollars.

But Hertz's loss could be your gain.  If you have been looking at purchasing an EV but don't want to pay the high prices of a new one, a wave of Tesla Model-3 and Model-Y are about to hit the market. Couple that with a $4,000 tax credit for pre-owned EVs and there will be good deals to be had.  Even if you do not buy one of the Teslas from Hertz, this move will likely drop the price of used EVs on the market, so keep your eyes open for a deal.

The National Highway Safety Administration (NHTSA) has received a recall from Tesla covering 2,031,220 vehicles. Products affected span from the 2012-2023 Model S, 2016-2023 Model X, 2020-2023 Model Y, and 2017-2023 Model 3. These recalls are for those vehicles with Autosteer. Tesla's Autosteer system, in certain scenarios, would fail to consider driver awareness or emergency driver intervention. This leads to potential misuse or cancellation issues. 

After testing the Autosteer technology, the NHTSA stated, "In certain circumstances when Autosteer is engaged, the prominence and scope of the feature's controls may not be sufficient to prevent driver misuse of the SAE Level 2 advanced driver-assistance feature." 

Tesla's response to the problems will be to send out an over-the-air (OTA) software update to address these issues. This update will include additional alerts and control beyond what the current system has. When Autosteer is activated, there will be more checks on the driver outside controlled-access highways. There is a possibility that Tesla will suspend Autosteer for those driving irresponsibly. 

As of midday on December 7th, 2023, Tesla's fleet has received a soft release to incorporate the necessary updates and enhancements. 

December 2021 possible customers and existing customers noticed that the production date for the Cybertruck had dropped off the reservation page at Tesla.com. The CEO later sent out on social media that he would have an update in the near future.

Seems Reuters.com got the 411 on this info as now per a person familiar with the matter informed Reuters yesterday that production is pushed back to the end of 2022 with initial deliveries to be done at the end of the first quarter of 2023.

Tesla as an electric car and suv builder has talked about electric semi-trucks and in 2019 revealed the Tesla Cybertruck to a much-flawed introduction, but a very successful reservation of the truck. Production was originally to begin in 2021 with deliveries by the end of the year. Due to the pandemic, Tesla delayed the truck as well as the semi to 2022. Now we learn that the removal of production dates means at the earliest 2023 with some insider revealing that production is supposed to begin at the end of 2022 with deliveries by the end of the first quarter of 2023 or end of March 2023.

Yet, no test mules have been seen, the Texas assembly plant that is to be used for the Tesla Y and Cybertruck is still under construction. Latest picture from 1-11-2022, and as folks know, having the walls up is one thing, installing a production line, testing it and starting production has not been a smooth thing for Tesla.

Rivian has started to in small numbers build the R1T truck and R1S SUV in limited numbers as they look to avoid the quality flaws that Tesla is still dealing with. Ford Motor company is on track to start deliveries of production trucks this spring as they fine tune things with the vast number of F150 Lighting pickup mules they have out. GM has started production of their Hummer pickup mules with production to start fall 2022 with deliveries planned before xmas 2022. Chevrolet and GMC will then have their F150 competitor out in 2023 around the same time as Tesla.

This begs many questions that could be asked as Ford has seen their company stock for the first time ever breach the $100 billion market value surpassing GM at a time that GM is also reaching to break this major company milestone.

CEO Elon Musk has now stated that a detailed product road map will be presented Jan 26th, 2022, at the earning call.

Musk has blamed much of the FAILURE TO LAUNCH on the supply chain nightmare as he tweeted in late November 2021.

Musk has also stated that Model Y production will begin at the Texas assembly plant in early 2022, yet as Tesla has proven, that could mean June 30th which would still be early 2022 as it falls in the first half of the year based on how Tesla tends to stretch things out.

Exclusive: Tesla delays initial production of Cybertruck to early 2023 - source | Reuters

Norway has been in the news lately and not just a little but across a wide range of news organizations. Norway has been very embracing of the move to EVs supporting just about every version that has come out from small EVs that would remind one of a Golf cart and illegal on the roads in the US to the luxury level of Tesla with the X and S auto's.

Norway has even been leading the world in the change over of their countries taxi fleet to EVs. One benefit to the taxi owner is the ability to write off half of the auto cost in the first year and the rest in the second year as long as the taxi travels over 100,000 kilometers per year. This allows private taxi drivers to purchase their own luxury ride to use as their work tool every day.

Tesla was the first to build out a very extensive network of charging infrastructure to support their auto's allowing owners to drive their EVs in any type of weather even very cold snowy winter.

As anyone in sales would know and to help everyone else understand, single month sales, and quarterly sales sales cannot always clearly show a trend about the success of a company. Even bi-yearly sales numbers while getting close to be considered a trend by some is not enough to state that a company has been a long term success.

Tesla ever since they started to sell auto's in Norway back in 2009 with just 13 sold has pretty much had a captured market to themselves especially since Norway has been trying various ways to push a clean green agenda going back into the 1990's. Tesla sales spiked in 2019 at 18,798 EVs sold before plummeting as VW introduced the much more affordable ID.4 and other luxury makers such as Audi with their e-tron came on the market in 2020.

As per the jalopnik story, Tesla did not sell many auto's in association with other auto choices till recently making the sample size very small in auto markets around the world. Norway then becomes an even more important picture on EV sales as a country that was in many ways the first to embrace EVs, will be the first to phase out all new ICE auto sales starting January 1st 2025. Currently contrast Diesel auto's that sold in 2011 with a 75.7% market share to only 8.6% market share in 2020.  A market where there are more EV options at various price points than any other market has transformed their auto market.

Lately, Tesla sales have not been that great and Ford Motor Company is off to a hot start with their Mustang Mach-e. Yes one can contribute this to the Ford EV being a new model but keep in mind that a year ago new auto sales had BEVs make up 43.1% of sales, this year, BEVs are averaging 60.4% of new auto sales with Ford having sold 1,384 Mach-e in May for a 10% share of Norways auto market. Toyota RAV4 hybrid is in second place and Skoda's electric Enyaq is in third. Currently in the top ten EVs sold in Norway, Tesla is coming in at 6th place.

Let's let the monthly numbers speak for what is being sold in Norway:

May 2021 top 10 best-selling auto's in Norway.

April 2021 top 10 best-selling auto's in Norway.

March 2021 top 10 best-selling auto's in Norway.

We then have no numbers, but a list was produced of the top 10 auto sales and unlike March, Tesla was in 8th place for auto sales in February:

The clear observation is that Tesla is NOT the dominant auto company in Norway and a concern for the CEO and company one would think. Clearly now that real competition is showing up, Tesla is going to have to address concerns about fit n finish, service, warranty issues, etc.

In 2019 Tesla dominated the market for BEVs:

Per Norways largest news covering the auto industry, December pretty much saved the year, but even then shows some very interesting changes from 2019.

This on top of the full 2020 year showing that Tesla is only #6 in auto sales in Norway.

At this point, Tesla needs to deliver on a low end solution of BEVs for Norway and the world if they are to remain competitive and survive it would seem. This would be the time for a Model 2 and even maybe 1 to come out of Tesla giving low end solutions for auto buyers that currently cannot afford higher priced auto's.

Ford Is Beating Tesla In One Of The Most EV-Saturated Markets In The World (jalopnik.com)

• Norway: Tesla car sales 2009-2020 | Statista

Ford's electric Mustang tops Norway car sales in May | Reuters

Ford's electric Mustang tops Norway car sales in May | Nasdaq

Historic December saved car sales | Dn

Tesla current owners are wanting change in the state of Texas and especially Elon Musk wants this change to happen as well. Musk became aware of the issue when a local owner posted this on twitter and tagged Elon Musk.

According to a beginners guide to the Texas legislature, at the end of the civil war, Texans were rewriting the state constitution and it was made very clear they hated government. The old joke goes that they wanted to have the state legislature meet for 2 days every 140 years. they had to settle for 140 days meeting every two years. As such the state house and senate members get paid their yearly salary, but only work 140 years every two years for this salary. The house is made up of 150 members serving a 2 year term. The Senate is made up of 31 members serving a 4 year term.

Texas also still has what is called the Blue laws, a set of laws that came into existence during prohibition and has been added to over the years so that the state has every other county dry, you can only buy auto's, meat, liquor on specific days, etc. All this adds to a confusion for people who come to the state of Texas to live and or work and need to buy items such as an Auto.

Now that you have a basic understanding of the political structure in Texas. No this is not a political discuss, but one focused on the challenges Tesla will have selling auto's.

Gigafactory Texas is in Austin Texas and as such the local house and senate members presented this working bi-annual 140 day session bill H.B. #4379.

These representatives of the area that Tesla is building a new manufacturing site that will build semi trucks, trucks and suvs on electrical battery platforms wanted to add the following to state law:

Tesla's company-owned outlets cannot legally sell and or deliver an auto in Texas if bought by a state citizen. The so called galleries are open to the public where one can go to review the auto's Tesla makes and discuss questions with staff about Tesla auto's, but no pricing is allowed to be discussed or how one would go about buying a Tesla auto.

On the other hand, any citizen of Texas can go online and order a tesla from their web site. The process is a very convoluted process as no order is allowed to be processed within Texas or any Texas facility owned by Tesla. 

So how does one purchase a Tesla in the state of Texas?

Per multiple postings from Tesla owners in Texas, their paperwork was FedExed to them from Tesla Gallery stores in other states such as Nevada, Colorado, etc. Once they received their paper work, they had to sign everything and send it back to the gallery store that is processing their order. The buyer then has to pay for the auto online, which must be done outside of the facility grounds in advance. The newly purchased vehicle is then shipped to one of Tesla's eight Texas Service Centers where the owner can then pick up their auto as an existing owner. At this point, Texas is very happy to then collect Sales Tax and register the auto that the owner will have to do themselves either at the local DMV or online.

Tesla has moved ahead since they anounced in July 2020 that they had choosen Austin Texas for their newest assembly plant and will be employing an estimated 5,000 people.

According to the details per thedrive.com story, representatives introduced H.B. 4379 on March 12th 2021, two months later it was reviewed by the house transportation committee on May 11th 2021 being a win for the Austin representatives. Yet this is where it turns sad for Tesla as a company dropping Billions into the state had no handshake, no deal, etc. about allowing them to sell direct. The seven step process of presenting a bill, reviewing a bill, voting on the bill, negotiating the changes between house and senate and all the other steps must be done within the 140 day session. As such, the 2021 legislation session came to a close with the bill not getting out of the committee and moving forward and as such, must be taken up again in 2023 legislation session. Stalled before it could even get off the start line.

For Decades the Dealer association has been very protective of their turf and spent considerable time and money lobbying the politicians and won this round. Cody Harris the local representative who presented the bill says that he still considers it a win due to the fact that it was presented before the members and as such, will help to open the eyes of the politicians about needed changes to the way auto's are sold.

President of the Dealer association says it is all about protecting the buyers as to why it is illegal for Tesla to sell direct.

QUOTE:

Illegal for Tesla to sell vehicles to them:

1. Tesla owners would be left helpless if the company failed, closing its service centers—whereas dealerships service cars even if they’re no longer made;
2. Tesla has better things on which to spend its capital than brick-and-mortar stores and service centers (an interesting assessment for a state dealer lobby, but whatever); and
3. The good reputation of all auto dealers would be deeply damaged if Tesla were to fail, leaving their owners high and dry.

So one can make their own assessment if you agree with or disagree with the Dealer Association about Tesla selling direct.

So how will Tesla which has stated they plan to start production of the Tesla Y and Cybertruck in 2021 sell their auto's in Texas home of their production?

End result is that Tesla will have to build their auto's and ship them out of state to other states where the gallery store will take possession of the auto. Sell the auto online to the Texas citizen, handle all the paperwork via FedEx or UPS and payment online, then reship the auto to Texas gallery store for pickup.

So what do you think about this and is it fair to Tesla, the citizens of Texas and the future of direct auto sales?

Texas House of Representatives - About Us

A Beginner’s Guide To The Texas Legislature – Houston Public Media

Do 'blue laws' still exist in the Lone Star State? Curious Texas investigates (dallasnews.com)

87(R) HB 4379 - Introduced version - Bill Text (texas.gov)

Tesla Will Have to Ship Its Texas-Built Cars Out of State to Sell Back to Residents (thedrive.com)

The Tesla Model 3 nearly broke into the top 10 best selling vehicles in Europe for September 2019, missing the mark by just 217 units.  Overall, sales growth in the EU is strong with 14 markets reporting positive numbers.  Germany came in at 9.1 percent and Italy came in at 6.5 percent.  Battery electric vehicles were up sharply, increasing 119 percent, of which Tesla controlled nearly 50% of that number.  Total Tesla registrations were 19,500 out of the 40,700 BEVs registered.  That put the Tesla Model 3 as the best selling BEV in Europe. 

For September, the Volkwagen Golf was the best selling vehicle in Europe with 32,398 units registered. 

Tesla shares jumped 18 percent yesterday after a surprise profit for Q3 of $1.86 per share, up from an expected loss of 42 cents per share. 

After seeing its sales slide during the first quarter of this year, Tesla needed to come up with an incentive to help boost sales of the sagging Model-X and Model-S.   In that effort, Tesla is returning the offer of free SuperCharging on all Model-S and Model-X sold.  The plan was last offered in 2018 and then ended after Elon Musk called the plan unsustainable. 

Telsa has been making changes to their lineup and pricing almost monthly since the beginning of 2019, so this could be a short term offer or it could stick around longer. Tesla buyers who already purchased their car are out of luck though, the offer only extends to new purchases. 

Over the weekend, Tesla CEO Elon Musk commented on Model Y production.  Originally thought to be slated for production at Tesla's Gigafactory in Nevada, Tesla appears to have changed course. 

Reported by Bloomberg, Musk said "Right now our default plan is to produce the Y at Fremont." during an interview on the "Ride the Lightning" podcast. "I was skeptical about whether this made sense at first, but my team convinced me the fastest way to get volume production is to do the Y at Fremont."

In order to free up space in the factory, Tesla plans to move Model S and Model X to a single line, according to current and former employees. Both models have seen sales tumble over the last 6 months as Model 3 sales increased.

Model Y sits on the same platform as the Model 3 and production is set to start in late 2020. 

In the same podcast, Tesla made some claims about the upcoming Tesla truck.  He said "It won't look like a normal truck. It's going to be pretty sci-fi" adding "It's going to be a truck that is more capable than other trucks. It will be a better truck than an equivalent F-150 in terms of truck-like functionality. That's the aspiration."  

After much speculation, it has come to light that Apple did propose to bid on Tesla back in 2013 for $240 a share, higher than the sub-$200 a share Tesla is trading at today, according to CNBC. Analyst Craig Irwin told CNBC that there was a serious bid from Apple and says that multiple credible sources have told him so.  

Tesla is down more than 46% from its high in August 2018 when CEO Musk tweeted that he had funding secured to take Tesla private at $420 a share via a Saudi Soverign Wealth Fund, but that tweet turned out to be false, Tesla reversed course, and got Musk and Tesla in trouble with the SEC and further cost Musk the Chairmanship of the company. 

Now that Tesla stock is trading in the sub-$200 range, it becomes a substantially more attractive acquisition target, not only for Apple, but for other companies as well.  The question remains what to do with Tesla's CEO Elon Musk.  Apple's insistence on Musk's departure was apparently what killed the deal back in 2013. 

Reports are that Apple is working on its own car technology, but acquiring Tesla would substantially boost their progress. 

Tesla's stock opened under $200 at $197.75 on Tuesday, a substantial decrease from the $332.80 it was trading for in December 2018. In April, Tesla posted a $722M loss for the first quarter of 2019.  Tesla has faced terrible delivery reports over the last two quarters while also trying to get the new Tesla Model Y production online and a Gigafactory in Shanghai operational. 

The Los Angeles Times reports that Wedbush Securities Analyst Dan Ives has cut the price target of Tesla from $275 a share to $230 a share citing an escalating trade war between the U.S. and China.  Another analyst cuts Telsa's forecast Chinese sales in half and sees the company being forced to take on new partners to make ends meet. 

Tesla recently raised $2.7 billion in a stock and bond sale, an amount that Tesla head Elon Musk says will give the company about 10 months of cash.

Tesla is seeking to raise nearly $2.7 billion to add to its sagging balance sheet according to a filling.  It would offer 3.5 million shares priced at $243 per share and a $1.6 billion convertible debt. Elon Musk will be buying $25 million in shares and currently owns around a 20 percent stake in the company.

Wall Street seemed to find this capital raise promising as it boosted shares 1.5% before the opening bell.  Analysts were calculating that Tesla, which burned $1.5 billion in Q1-2019 alone, would not have enough cash to continue working on its Model Y crossover and the new Tesla Semi-truck, and also getting production rolling in China. 

In the backdrop of a sagging US auto market, Tesla has seen demand for its cars soften dramatically in the US over the past two quarters, though demand for EVs in Europe has increased.

Tesla posted a $722M loss for the first quarter of 2019, higher than analysts expectations.  This was a swing from a 4th quarter 2018 profit of $139.5M.  Cash on hand is $1.5B lower than end of 2018, now $2.2B, partially due to a one time payment of $920M in convertible bonds that came due.

Tesla says that is built 63,000 model 3s in the first quarter gearing up for overseas sales, though only 12,100 of those vehicle were delivered. Tesla is maintaining its projections of 360,000 to 400,000 vehicles total for the year. 

Tesla recently announced updates to its Model S and Model X vehicles that allow them to travel further on a single charge and also charge up to 50% faster than before. These updates require the purchase of a new vehicle and cannot be simple downloads over the air.  They are also offering current owners who purchase a new Model S or Model X Performance model a free upgrade to Ludicrous Mode. Part of the reason for this upgrade is that the Model S, Model X, and Model 3 now share drive components and that simplification could yield big savings for the company. 

Tesla is also preparing for the launch of the Tesla Model Y small crossover based on the Model 3 sedan, but deliveries of that vehicle do not start until Fall 2020

We reported earlier in April that Tesla was preparing more efficient versions of their Model S and Model X.  Yesterday Tesla announced improvements to the Model S and Model X Long Range models that will increase range to 370 miles and 325 miles respectively, based on EPA testing cycle.  The vehicles will still use the same 100 kWh battery pack.

Unfortunately, customers will only get this upgrade when they purchase a new vehicle.   The upgrade changes the drive hardware to the latest version of Tesla's motor technology.  Now using a permanent magnet synchronous reluctance motor, silicon carbide power electronics, improved lubrication, cooling, bearings, and gear designs achieve a 10% improvement in range.  This improvement works both during supplying power to the vehicle and during times of regenerative braking.  In addition to adding range, power and torque has increased for all Model S and Model X versions, resulting in even better 0-60 times.

Along with this new more efficient powertrain, the Model S and Model X are now capable of 200kW charging on V3 Superchargers and 145 kW on V2 Supercharger. This enables drivers to charge 50% faster.

Tesla has also upgraded the air suspension system to be fully-adaptive. It will give an ultra-cushioned feel when cruising on the highway for firm up during more aggressive driving behavior.  The adaptive suspension can receive over the air updates so that Tesla owners always have the latest technology. 

Tesla will also be bringing back their standard range versions of these cars at a lower entry price that includes the latest motor and suspension updates. Any existing Model S or Model X owners who purchase a new Performance model of these cars will get a free upgrade to Ludicrous Mode at no additional charge.

The changes go into production this week and can be ordered today.

It was only eight weeks ago when Tesla finally announced that the $35,000 Model 3 would be available to order. This news caused the internet to go crazy on this news as it would become the most affordable model in Tesla's lineup. But late this week, the Californian automaker made some changes to the Model 3 ordering process to "simplify vehicle choices and make Autopilot more affordable."

On Thursday, Tesla said in a blog post that the $35,000 Model 3 - known as the Standard Range - would not be available to order online. If you want one, then you need to either find Tesla store that is still open or call the company directly. Why is this happening?

Quote

Last quarter, we introduced two new Model 3 variants with more competitive pricing than ever before – Standard and Standard Plus. Since then, Standard Plus has sold at more than six times the rate of Standard, far exceeding our expectations.

Given the popularity of the Standard Plus relative to the Standard, we have made the decision to simplify our production operations to better optimize cost, minimize complexity and streamline operations. As a result, Model 3 Standard will now be a software-limited version of the Standard Plus, and we are taking it off the online ordering menu, which just means that to get it, customers will need to call us or visit any one of the several hundred Tesla stores.

(Author's Note: A quick refresher; the Model 3 Standard Range gives you 220 miles, while the Standard Plus offers 240 miles. -WM)

There is some dispute to the claim of the Standard Plus outselling the Standard. In late March, The Drive reported that a number of customers have gotten text messages from Tesla saying their deliveries have been pushed back without a new delivery date. Several have reported getting calls from Tesla trying to upsell them into the Standard Plus model.

In Tesla's blog post, the off-menu version of the Model 3 will see its range decreased by 10 percent when compared to the Plus model, along with "several features will be disabled via software (including our onboard music streaming service, navigation with live traffic visualization, and heated seats)." Tesla also announced that Standard customers will have the option to upgrade to the Plus at any time, along with the option for Standard Plus owners to convert their model to the Standard and get a small refund "for the difference in cost." 

As for pricing, the Standard Plus will now set you back $39,500 - up $2,000 over the previous Standard Plus. This is due to Tesla making Autopilot standard on all of their models. No pricing was given for the secret Model 3 Standard.

“Tesla is now facing a reckoning. Between the cost cuts, waning demand for its vehicles and now making the $35,000 Model 3 much harder to buy, the company is now quietly realizing it has to play by the same rules as every other automaker,” said Jessica Caldwell, executive director of industry analysis at Edmunds.

But wait, there's more!

Tesla also announced that it would be offering a lease for Model 3. It is a 36-month lease with mileage options ranging from 10,000 to 15,000 miles per year. But there is a big caveat to this. Unlike most leases where you can buy the car at the end of the lease, Tesla is not allowing any Model 3 customer to buy their vehicle after the lease. The automaker is planning to use them in their upcoming ride-hailing network.

Source: Tesla, Bloomberg (Subscription Required)

Photo by Vlad Tchompalov on Unsplash

Following a dismal fall in sales in the previous two quarters, Tesla has sacked several dozen employees in stores in Chicago, New York, and Tampa last week according to a report in Bloomberg.  These cuts are the latest in a series of cuts to Tesla's retail staff that Tesla had announced earlier in the year.  At first, Tesla had announced it would close most of its retail locations and moving to an entirely online retail model. They later changed course and dialed back the reductions with the caveat that some locations would still be closing. Tesla then raised the prices on the more expensive Model 3 trims 

Most of the cuts came from staff who hold the position of Inside Sales and their managers. Inside sales teams reach out to potential buyers and stimulate interest with test drives. 

According to sources familiar with Tesla software, Tesla is preparing to update the Model S and Model X with new, more efficient motors.  Recent software updates have appeared that make reference to the new motors. 

The new motors with the codename "Raven", are permanent magnet reluctance motors as found in the Model 3. These motors have the benefit of pre-excitation from the magnets giving them an efficiency advantage. They also work to reduce the overall costs of the vehicle.  In the Model 3, the motors can achieve an efficiency rating higher than 97% compared to 93% on the Model S/X.   The difference in efficiency is even more marked in stop and go traffic where the Model 3 is much more efficient than the AC induction motors in the Models S and X. These upgrades could work out to a longer range and better performance for the pair. 

Tesla sales, though up year over year, have recently crashed down 31% from the previous quarter . While the timing of the release of these upgrades is not known, there are rumors that Tesla is planning a major interior refresh for the pair for 2020, so it could be matched with those updates.  Important timing when vehicles like the Porsche Taycan, Audi E-Tron , and Polestar 2 will be hitting the market over the next 18 months. 

Tesla unveiled their newest addition to their lineup, the Tesla Model Y, last night at an event in Los Angeles. 

The Model Y is a crossover based on the Model 3 platform but is large enough to carry 7 adults. Inside, the high seating and panoramic roof lend a feeling of spaciousness.  A front trunk and split folding second-row seats provide a total 66 cubic feet of storage. Like on the Model 3, accessing the Model Y works from a connection to the driver's smartphone.  The Tesla Mobile App connects to features like remote door lock, Summon, remote pre-conditioning, location tracking, and more.  Tesla has built the Model Y to be the safest mid-size SUV with rigid body structure and large crumple zone.  

The Model Y will come in 4 powertrain variants.  The Standard Range version will start at $39,000 plus $1,200 delivery charge. It will also be offered in Long Range, Dual-Motor All-Wheel Drive, and Performance.  The highest performance Model Y will have a 0-60 of 3.5 second and a top speed of 150 mph.  Standard Range battery will offer 230 miles of range while the Long Range version will offer 300 miles on a full charge. 

Deliveries of the Performance, Long Range, and Dual-Motor models will begin in Fall of 2020 while the Standard Range will begin deliveries in Spring of 2021.

On February 28th, Tesla announced that they would be closing most of their retail locations and moving to an online sales model in order to cut costs.  In a blog post yesterday, Tesla has reversed course on that position somewhat, and will not only close a portion of their stores. 

Some of their locations, around 10%, have already closed and Telsa said they would have closed anyway due to low foot traffic.  Another 20% of locations are currently under review and depending on performance will be decided on in the next few months. 

All sales will still remain online only, and customers who come into the stores will be shown how to order their vehicle online.  The 1000 mile or 7 day return policy (minus the non-refundable delivery charge) will remain in effect for any customer who has doubts about their purchase.  The remaining Tesla stores will have cars available for test drive and will keep a small number of vehicles in stock for people who want to take delivery immediately. 

To compensate for this change in direction, Tesla will be raising prices by 3% on the more expensive trims of Model 3, and the Model S and Model X.  The base Model 3 remains $35,000 plus $1,200 delivery charge. Current prices are valid until March 18th.

Tesla announced the evening of March 6th 2019 that Version 3.0 of their supercharging network would roll out across the globe and be in place by the end of calendar year 2019. With the growth of the global market and to support a ever growing base of Tesla 3 owners and the upcoming new products, charging needed to get faster to reduce wait times by their customers. As such. V3 Supercharging was born out of Tesla's experience with the world's largest grid connected batteries enabling Tesla to surpass all OEM auto competitors in recharging their electric auto's.

V3 Supercharging is a utility scale new architecture product that can delivery a peak rate of 250kW per car using a new 1MW power cabinet delivered via liquid cooled charging lines. This allows the Tesla 3 to recover 75 miles of range in 5 min with a charge rate of 1000 miles per hour. This new charging technology cuts the average time spent recharging by 50%. In addition to the new 250kW Superchargers, Tesla is able to push out an update to the existing V2 Superchargers that will allow a 145kW charge rate on the 12,000 plus V2 Superchargers around the world. This will be coming in the next couple of weeks as Tesla works to reduce charge times at existing charge stations. Tesla is expecting to double by the end of the calendar year 2019 the number of Tesla auto's on the road globally and having a faster recharge time on existing Superchargers is critical, but in high volume areas, this will need to be addressed and Tesla says they can do this by adding the 250kW chargers to existing stations.

Tesla V2 charging cable to the left, V3 liquid cable to the right.

This new supercharger no longer splits power with the vehicle next to you  but delivers the full amount of charge to your battery. Tesla expects the average time spent by a customer at a Supercharging station to drop to 15 min on average. 

Tesla is also pushing out to Tesla 3's a new On-Route battery Warmup software feature that will intelligently heat the battery to the optimal temperature so that at the time of arrival at the supercharging station it can take a full high capacity charge quickly to get you on your way. This becomes very important as Tesla says with the Model Y on the way V3 SuperCharging is the only way Tesla can sustain quickly keeping people moving and not waiting around.

San Francisco bay area will get the first of the all new V3 Supercharger stations. These new V3 chargers will be made available to the Tesla Early Access Program participants. V3 Supercharging stations will get installed in North America during Q2 & Q3 time frames with Asia and Europe installations starting in Q4 of 2019.

Now you might ask what about the Tesla S and X auto's? While they currently will not be able to take advantage of the 250 kW chargers, Tesla does say in their release that in the coming months, Tesla S and X will get software updates to allow them to use the 145kW V2 Superchargers.

One might ask how does this compare to what the VW-backed Electrify America network? Electrify America is currently rolling out 350 kW capable chargers. These chargers will allow a Tesla 3 to get 185 miles of range in 9 minutes once the Tesla 3 has their new Software update.

The Future of ultra fast recharging is coming and should allow a revolutionary change in the way people drive.

Elon Musk revealed in a series of tweets that the Tesla Model Y compact crossover would be revealed at an event in their LA Design Studio on March 14th.  Detailed specs, pricing, and even test rides will be available.  Musk says that the Model Y will be about 10% larger than a Tesla Model 3 and expects pricing to be about 10% more.  The Model Y will share battery sizes with the Model 3 and because of increased size and weight will get slightly less range.  Musk indicated that the Model Y will look a lot like a Model 3 and will not have the falcon wing doors found on the Model X. 

Last week Tesla announced that the base model $35,000 (before destination charges) version of its Model 3 sedan was now available and that it would be closing most of its retail locations to focus mainly on online sales.

Tesla announced that beginning today, the standard version of the Model 3 with a base price of $35,000 is available for order.  The base Model 3 has a top speed of 130 mph and a 0-60 time for 5.6 seconds. Additionally, Tesla will be introducing a Model 3 Standard Range Plus with 240 miles of range, top speed of 140mph, 0-60 of 5.3 seconds, and some interior upgrades for $37,000 before incentives.  Tesla claims that these upgrades give customers 9% more range for 6% more money.

Existing Model 3 drivers will be receiving firmware updates that will increase the range of the Long Range rear-wheel drive Model 3 to 325 miles and the Model 3 Performance top speed to 162 mph.  The firmware update for all Model 3 cars will give an approximate 5% power increase. 

In the same announcement, Tesla revealed that they will be closing most of their retail locations with the exception of a few high traffic outlets and moving to an online-only sales model.  Customers buying a Model 3 will now be able to try the car for 7 days or 1,000 miles and return it for free.  Tesla claims that this will ease customer concerns about being able to test drive the vehicle before purchase.  By moving to an online-only system, Telsa claims that it will be able to reduce prices 6% on average. 

Tesla is moving to a Same-Day and in some locations Same-Hour service system where Tesla comes to the driver rather than the traditional method of vehicle service. Tesla is also guaranteeing everywhere in every country they sell in.

Last Tuesday, Tesla CEO Elon Musk tweeted that the company would produce "around 500,00" cars in 2019, a large increase over the goal of 400k vehicles the company previously forecast in January. Musk later corrected himself and said that is meant "annualized production rate at the end of 2019 probably around 500k". 

The problem with this tweet is that back in October, Tesla and Musk had entered into a settlement with the SEC that Musk's public statements regarding Tesla production, finances, and other such matters would be reviewed by the company's board of directors before they were posted. The settlement stems from a fraud case where Musk tweeted that "funding has been secured" to take Tesla private, a tweet that later turned out not to be true.  Tesla's lawyers acknowledged to the SEC on Friday that the posts in question had not been reviewed.

Yesterday, the SEC filed a motion with the Federal District Court in Manhattan that claims Musk had "violated the court’s final judgment by engaging in the very conduct that the preapproval provision of the final judgment was designed to prevent.". Further, the tweet had gone out to 24 million followers. 

Musk argues that the substance of his tweets had already been vetted, approved, and publicly disseminated.  The defense comes from Telsa's earning report which had a forecast production of between 350,000 to 500,000 cars. 

The federal judge has a range of options from imposing a fine, impose restrictions on Musk's use of Twitter, or even set up for a later removal of Musk as CEO.

Tesla stock dropped about 3% in the hour directly after the motion was filed.

Related:

Tesla Model 3 "Recommended" Rating Rescinded by Consumer Reports

Tesla Laying Off 7% of Workforce

Tesla Dials Backs Production Hours on Model S and X

Consumer Reports has rescinded the "Recommended" rating after a high number of survey responses came back with reliability complaints.  Survey respondents have indicated that the electronics in the car have issues such the screen freezing or acting as though it was being touched rapidly in multiple locations.  This issue would cause music to play, volume to increase to maximum, or the navigation map panning and resizing. 

Some owners reported issues with trim and paint, with a few, including CR themselves, experiencing a large crack in the rear glass. 

When the Model 3 came out in 2017 it received an initial rating of average based on the fact that it shares so much technology with the then average rated Model S.  Some early adopters reported issues with braking that dropped the score to below average.  Telsa issued an over-the-air update to correct the braking issue and the score returned to average. 

The Model S's rating has been inconsistant as Telsa has made hardware changes over the years.  CR dropped the "Recommended" rating from the Model S in the fall of 2018 due to issues with the suspension. Tesla made AWD and air suspension standard on the Model S for model year 2017.

The Model X has always had a below average rating and has never earned a "Recommended" largely due to problems with its falcon-wing doors. 

Tesla is expected to debut a new crossover this year along with the production version of its Semi-truck.

Back in 2017, the NHTSA released a report on the safety of Tesla's Autopilot system after the fatal crash of a Tesla owner in 2016. That report claimed that the use of Autopilot, or more precisely the lane-keeping function called Autosteer, reduced crash rates by 40%. 

In that original crash, the owner repeatedly ignored warnings to resume manual control of the vehicle.  Critics questioned whether Autopilot was encouraging drivers to pay less attention to the road.  The NHTSA report appeared to put those concerns to rest.

Later, when a second driver died in an Autopilot related accident, Tesla CEO Elon Musk pointed to the NHTSA study and the 40% increase in safety claim. Now, 2 years after the original report. According to a report by Arstechnica, a third party has analyzed the data and found the 40% claim to be bogus.

Originally the NHTSA data on Autopilot crashes was not publically available when Quality Control Systems, a research and consulting firm, requested it under a Freedom of Information Act request. The NHTSA claimed the data from Tesla was confidential and would cause the company harm if released.  QCS sued the NHTSA and in September of last year, a federal judge granted the FOI request.

What QCS found was that missing data and poor math caused the NHTSA report to be grossly inaccurate.  The period in question covered vehicle both before and after Autopilot was installed, however, a significant number of the vehicles in the data set provided by Telsa have large gaps between the last recorded mileage before Autopilot was installed and the first recorded mileage after installation.  The result is a gray area where it is unknown if Autopilot was active or not.  In spite of this deficiency, the NHTSA used the data anyway.

In the data provided only 5,714 vehicles have no gap between the pre and post Autopilot mileage readings.  When QCS ran calculations again, they found that crashes per mile actually increased 59% after Autopilot was installed.

Does that mean that a Tesla using Autopilot makes a crash 59% more likely?  The answer to that is no for a number of reasons.  First is that the sample size QCS had to work with is a very small percentage of Tesla’s total sales.  Secondly, the data is only representative of vehicles with version 1 of Tesla’s Autopilot, a version that Tesla hasn’t sold since 2016.

Tesla stopped quoting the NHTSA report around May of 2018, possibly realizing something was fishy with the data. They have since taken to their own report stating that cars with Autopilot engaged have fewer accidents per mile than cars without it engaged.  This has some statistical fishiness to it as well.  Autopilot is only meant to be engaged on the highway and due to the higher rate of speed all vehicles have a lower rate of accidents per mile.

We may just have to wait until more data is available to find out if Tesla Autopilot and systems similar to it make crashed that much less likely.

Maxwell Technologies has announced their definitive merger agreement with Tesla, Inc. This is a $218 million dollar all-stock deal which put a value of $4.75 per share on the Maxwell common stock. To quote the news announcement from Maxwell;

Quote

"We are very excited with today's announcement that Tesla has agreed to acquire Maxwell. Tesla is a well-respected and world-class innovator that shares a common goal of building a more sustainable future," said Dr. Franz Fink, President and Chief Executive Officer of Maxwell. "We believe this transaction is in the best interests of Maxwell stockholders and offers investors the opportunity to participate in Tesla's mission of accelerating the advent of sustainable transport and energy."

Tesla CEO Elon Musk is on record saying that ultracapacitors could provide a more likely bet for a breakthrough in energy storage than batteries. Maxwell Ultracapacitors can hold up to 300 watt-hours of electricity per kilogram. This represents 20%  more storage than Tesla's largest battery cell pack. Maxwell is also on record saying that their Ultracapacitors have the potential to store more than double the energy by mass versus Tesla's current cell design and will allow Tesla to ramp up the density and speed factor of their auto's while greatly reducing the time to recharge.

Looking at where Tesla is today and for the future, this purchase has to be also based on the fact that Maxwell Ultracapacitors use solid-state technology with no flammable electrolytes or rare earth minerals such as cobalt. One also has to think that this could be a hedge as Panasonic is on record as saying they will not have solid state batteries for about 10 years unlike Volkswagen, Mercedes-Benz, Fisker, Dyson and other auto companies who have stated they will have solid state batteries in their electric vehicles between 2022 and 2025.

Maxwell is also the ultracapacitor supplier to Geely, the parent company of Volvo where they will be used in Volvo's plug-in hybrids.

Maxwell has also announced that they will showcase their Ultracapacitor storage system at Key Q1 2019 Grid and Utility Events such as DistribuTECH in New Orleans and Energy Storage Europe in Germany. To quote their press release:

Quote

 Maxwell will showcase two ultracapacitor subsystems for grid energy storage: the Grid Energy Storage System (GESS) and the Grid Cell Pack (GCP). These highly scalable products deliver reliable, fast-responding, long lifetime storage in grids and microgrids. Both products address the growing need for power-intense grid services, and are designed to stabilize voltage and frequency, firm renewable power output, provide bridging and ramping services and improve generator response. The GESS and GCP can be deployed as stand-alone energy storage systems or in combination with other energy storage assets.

This one could take as a sign of how Tesla will grow their own home and business storage business with Solar. Musk in the most recent earning's call stated he thinks Tesla's energy storage business is to be one of their big growth areas this year.

Tesla isn't done with price cuts it seems. Bloomberg reports that the automaker has dropped the price of all Model 3 models by $1,100 - bringing the base price to $42,900. The reason cited by Tesla was the end of a customer referral program that ended up costing them more than they realize.

The program gave new owners six months of free supercharging if they were referred by a friend. Those who referred a number of people got rewarded with various prizes such as getting the next-generation Tesla Roadster.

This is the second price cut for Model 3 this year. Last month, Tesla instituted a $2,000 price cut on their lineup to soften the blow of the Federal Tax Credit being cut from $7,000 to $3,750.

Source: Bloomberg

Before January comes to a close, Tesla has announced some more changes for the Model S and X. Instead of using 100D and P100D to designate models, Tesla will be using the naming system found on the Model 3. This is how it will break down.

• 100D = Extended Range
• P100D = Performance
• P100D with Ludicrous Mode = Performance with Ludicrous Mode

There will also be base models known as the Model S and Model X. They'll get the same 100 kW battery as in the extended range models, but range will be locked to 310 Miles (Model S) and 270 miles (Model X). You can pony up $8,000 to gain the extra range (335 for the Model S, 295 for the Model X).

Earlier in the month, Tesla dropped the 75D and made the 100D the new base model (which in turn raised the base price by $15,000 or more).

Source: Tesla

Hat tip to @dfelt for tipping us to this story

Tesla announced yesterday that it will reduce production hours for the Model S and Model X. This follows news of Tesla cutting seven percent of their workforce and dropping 75D variants of the S and X.

“We recently announced that we are no longer taking orders for the 75 kWh version of Model S and X in order to streamline production and provide even more differentiation with Model 3. As a result of this change and because of improving efficiencies in our production lines, we have reduced Model S and X production hours accordingly,” Tesla said in a statement to Bloomberg.

According to unnamed current and former employees, Tesla has set "substantially lower daily production targets" on the Model S and X. Tesla declined to comment when asked about the production targets.

This is causing concern to grow about the demand for Tesla's more expensive (and profitable) vehicles, as it gears up to get more Model 3s out the door.

Source: Bloomberg

Hat tip to @balthazar for notifying us about this story.

In an email to all employees today, Elon Musk has announced that Tesla plans to layoff 7% of its staff or about 3,150 jobs. In addition to these cuts, Tesla will also retain only the most critical of contractors and temporary workers. Tesla's workforce grew by 30% last year. 

Musk reported that preliminary financial results for Q4-2018 show a small profit, smaller than the 4% profit reported for Q3-2018. 

Musk stressed that Telsa must work to get the mid-range Model-3 available in all markets by May in order to target a tiny profit for that quarter. 

The email was also posted to Tesla's company blog.

Hat tip to reader @Cmicasa the Great for notifying us of the story. 

Tesla is moving further into exotic car territory with the Model-S and Model-X.  Elon Musk announced in a tweet on January 9th that after January 13th, the 75D versions of both vehicles would no longer be available for order and the new entry-level model will be the 100D.

 

Quote

 

Starting on Monday, Tesla will no longer be taking orders for the 75 kWh version of the Model S & X. If you’d like that version, please order by Sunday night at https://t.co/46TXqRJ3C1

— Elon Musk (@elonmusk) January 9, 2019

 

The starting price for Model-S 75D is $76,000. That gets you an AWD EV with 259 miles of range that can do 0-60 in 4.2 seconds. Telsa's AutoPilot is available for an additional $5,000. Moving to the 100D is an increase of $18,000 to $94,000. That increases the range to 335 miles and cuts a tenth of a second off the 0-60.

The Model-X 75D starts at $82,000 with a range of 237 miles. With that gone, the new base Model-X 100D results in a $15,000 increase in Model-X base price to $97,000 with an increase of range to 295 miles. 

These price increases come on the back of the reduction in federal tax credits that begin this year, from $7,500 to $,3750.  That brings the total effective price increases for the Model-S and Model-X to $21,750 and $18,750 respectively. After June 30th of this year, the tax credit will fall further to $1,875.

The Model-S and Model-X have been selling well against such heavyweights as the Mercedes S-Class and BMW X5. However, Porsche, Jaguar, Mercedes, and Audi, as well as upstart Rivian , are all releasing competitors to the Telsas in the coming months. Whether Tesla can maintain that momentum with $20,000+ price increases remains to be seen.

Hat tip to reader @balthazar for pointing us to this story.

Tesla reported Q3 2018 Earnings on Wednesday with revenue of $6.82 billion and a profit $417 million or $2.90 per share. Tesla's earnings per share widely out-paces analyst estimates of losses of 15 to 19 cents per share.

Revenue on automotive production increased 158% year over year with a dramatic increase in sales during the summer of 2018 due to increased sales of the Model 3 sedan. Tesla also cites increased gross margins on the Model S and Model X due to increased efficiencies.  The Model 3's margin grew to above 20% while production rate increased and manufacturing costs dropped. Telsa is now moving an average of 4,300 Model 3s off the assembly line per week.

Tesla did not change their overall guidance for the year and production goals remain at 100,000 Model S and Model X units for 2018.

Tesla Report attached (PDF) - TSLA 3Q18 Update Letter

For the past couple of years, Tesla has been offering an $8,000 "full self-driving" feature for their Autopilot system. But you couldn't use this feature as Tesla had not yet activated this feature. Basically, you were buying a system that Tesla promised would come online sometime in the near future. But that is not happening as Tesla has pulled the option for the time being.

Last night, Tesla CEO Elon Musk tweeted the option has been taken off due to it causing "too much confusion".

Since Tesla began offering the option in October 2016, the company has seen a number of top managers and engineers leave the Autopilot program. A number of owners who paid for the $8,000 option have filed a class-action lawsuit, "alleging they were deceived into buying a feature that didn’t exist."

However, this feature isn't going away. Bloomberg obtained an internal email where Musk told employees they needed about 100 more people to join an internal testing program that is linked to full self-driving feature. 

Source: Bloomberg

Tesla finds itself without a chairman of the board as Elon Musk has stepped down due to a settlement with Securities and Exchange Commission. A possible replacement for Musk could be James Murdoch, chief executive of 21st Century Fox and a member of Tesla's board according to a report from the Financial Times.

The SEC is wanting the next chairperson to be independent and not beholden to Musk. Murdoch is the closest thing as he has more financial independence than another candidate, Antonio Gracias. The FT report says Gracias' venture capital firm, Valor Equity Partners was an early investor into Tesla, though it had sold its shares when Tesla had its IPO. Gracias is also a stakeholder in Musk's SpaceX, which clouds his independence. 

That isn't to say Murdoch's independence is clear either as he is friends with Musk, and has sided with him on a number of decisions.

Sources tell the FT that Tesla is also looking outside of the company for a possible replacement.

Tesla didn't respond for comment, but Elon Musk took to Twitter last night to respond.

"This is incorrect," he wrote.

Source: Financial Times (Subscription Required), Bloomberg

In a deal announced late Saturday between Tesla and the Securities and Exchange Commission,  Elon Musk will be stepping down as Chairman of Tesla Motors and barred from holding that position for 3 years. Additionally, Musk and Tesla will pay $20 million in fines each.  

As part of the settlement, Tesla will add two additional board members and more closely monitor Mr. Musk's public communications. 

Neither Tesla nor Mr. Musk admit wrongdoing as part of this agreement. 

The settlement comes as a surprise as apparently Musk had rejected a similar deal earlier this week.

The settlement stems from a lawsuit filed by the SEC against Musk and Tesla over an August 7th tweet by Mr. Musk that "funding is secured" to take Tesla private. Federal investigators found that the deal referred to in the tweet was still in the early stages and thus was considered deceptive to investors.

Update: Musk will stay on as CEO. Resigning only as Chairman of the Board.

Late Thursday afternoon saw a massive bombshell dropped; the SEC sued Elon Musk over securities fraud over his August tweet that he was considering taking Tesla private and having the "Funding secured." But a new report from CNBC said there was a possible settlement between the two where Musk would not have to admit guilt. However, Musk pulled the plug on the deal at the last minute.

According to sources, this is what the proposed deal looked like,

• Tesla and Musk would had to pay a fine
• Musk would not have to admit guilt or deny culpability
• Barred Musk as being the chairman for two years
• Require Tesla to find two new independent directors

However, Musk refused this deal "because he felt that by settling he would not be truthful to himself, and he wouldn't have been able to live with the idea that he agreed to accept a settlement and any blemish associated with that, the sources said." 

This move puts Tesla and Musk in a very difficult spot. The company's stock fell 13.9 percent on Friday - the worst since November 2013. There are also questions as to whether or not Elon Musk will stay on as CEO or if this mess will force him to leave. 

Choosing to fight the SEC means it could take years for an outcome to be reached according to Toni Sacconaghi, an analyst with Bernstein Research.

"In the absence of a settlement, the mere possibility that Musk could be removed as CEO (or entirely from Telsa) is likely to cast an overhang on the stock, and make it extremely difficult for the company to raise capital (either private or public)," Sacconaghi said.

What will be Tesla's defense to the SEC's charge? The Wall Street Journal learned from a source that Musk believed "he had a verbal agreement in place with Saudi Arabia’s sovereign-wealth fund to help finance a plan to take the auto maker private." Musk believes that the SEC isn't "taking into account that Middle Eastern businesses routinely operate using verbal agreements in principle."

Source: CNBC, Wall Street Journal (Subscription Required)

The tweet that has become Elon Musk's version of Pandora's Box has brought forth a lawsuit from the Securities and Exchange Commission (SEC). Today, the SEC accused Musk of securities fraud when he tweeted that he had the funding secured to take Tesla private back in August.

"Musk knew or was reckless in not knowing that each of these statements was false and/or misleading because he did not have an adequate basis in fact for his assertions," the SEC wrote in a complaint filed in Manhattan federal court today. 

"Musk's false and misleading public statements and omissions caused significant confusion and disruption in the market for Tesla's stock and resulting harm to investors."

In the complaint, the SEC says the $420 share price was "based on a 20% premium over that day's closing share price because he thought 20% was a 'standard premium' in going-private transactions." 

At the time, that price would have been $419. The complaint goes on to say "Musk stated that he rounded the price up to $420 because he had recently learned about the number's significance in marijuana culture and thought his girlfriend 'would find it funny, which admittedly is not a great reason to pick a price.'"

The SEC is requesting Musk "be prohibited from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act."

This whole mess began on August 7th with Musk tweeting this,

This surprised a number of people and brought forth questions as to who would provide the large amount of funding needed for this. About a week later, Musk revealed that Saudi Arabia's Public Investment Fund (PIF) could provide the necessary funding. This was based on discussions with the fund within the past couple of years. But Musk would pull the plug on this a few weeks after announcing it.

"Although the majority of shareholders I spoke to said they would remain with Tesla if we went private, the sentiment, in a nutshell, was ‘please don’t do this,” Musk wrote in a blog post.

According to Bloomberg, the SEC was already investigating Tesla for various issues including projection into car sales before Musk made the tweet that brought forth a number of problems. 

“This unjustified action by the SEC leaves me deeply saddened and disappointed. I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way,” said Musk in a statement.

"Neither celebrity status nor a reputation as a technological innovator provide an exemption from the federal securities laws," Stephanie Avakian, co-director of the SEC's Enforcement Division said during a press conference.

Source: Bloomberg (Subscription Required), Roadshow, SEC (Link to the complaint)

We have to wonder if Tesla CEO Elon Musk regrets posting this tweet as the Justice Department has opened an investigation into the company.

Bloomberg has learned from two sources that federal prosecutors opened a fraud investigation into the company after Musk's tweet sent shares soaring. This follows an inquiry by Securities and Exchange Commission into whether or not Tesla had issued "misleading pronouncements on manufacturing goals and sales targets."

The investigation is in the early stages according to a source and its unclear how big of a scope the investigation could take. Prosecutors could look into other statements by Musk concerning Tesla's overall health and the circumstances surrounding Dave Morton, Tesla's former chief accounting officer.

“Last month, following Elon’s announcement that he was considering taking the company private, Tesla received a voluntary request for documents from the DOJ and has been cooperative in responding to it. We have not received a subpoena, a request for testimony, or any other formal process. We respect the DOJ’s desire to get information about this and believe that the matter should be quickly resolved as they review the information they have received,” Tesla said in a statement today.

Source: Bloomberg

If there is a trend at Tesla, it's that there's always more to the various stories. Case in point: On Friday night, CEO Elon Musk posted a piece on Tesla's blog saying that plans have been scrapped about taking the company private.

"Although the majority of shareholders I spoke to said they would remain with Tesla if we went private, the sentiment, in a nutshell, was ‘please don’t do this,” Musk wrote.

But what led him to this decision? Over the weekend, Bloomberg, The New York Times and Wall Street Journal published pieces into Musk's reversal. The short of it comes down to Musk jumped the gun with his announcement earlier this month on Twitter without making sure everything was in place.

Quote

In that time, according to five people close to the events, Mr. Musk came to realize that his thinking had been overly simplistic. While going private might have removed some problems, it would have introduced new ones.

Among his concerns were ceding too much control to private investors — including conventional car companies and Saudi Arabia, a symbol of big oil — and shutting out smaller investors who might be unable to retain a stake.

This from the New York Times - emphasis mine.

Let's begin with Saudi Arabia. As we reported earlier this month, Musk said in a blog post that he believed Saudi Arabia's Public Investment Fund could provide the funding necessary for the move to go private. This was based on discussions between the two, along with the fund purchasing a small stake into the company. The Saudi's didn't share the same enthusiasm. While the fund was open to make a significant investment into Tesla to hedge the country against oil and help attract tech expertise, sources tell Bloomberg the fund was only interested in a minority stake. The two hadn't reached an agreement on the possible terms according to a source, before Musk made his post announcing the fund.

The Wall Street Journal learned from a government official that Musk's post angered some senior officials in the kingdom. Some officials wondered about Musk's "health as well as the role he would play in the company." This might explain some of reasoning behind the possibility of Saudi Arabia's PIF investing to Lucid Motors - something we brought to light last week.

Meanwhile, there were concerns at Tesla about Saudi Arabia. Some complained to Musk about selling a large chunk of shares to a foreign oil producer wouldn't be a good look.

As for the private investors, the Journal reports that Goldman Sachs and private-equity firm were brought in to help facilitate a deal. Last Wednesday, the two presented Musk a roster of investors including Volkswagen and Silver Lake itself (promising to contribute up to $30 billion according to sources). But these weren't the investors that Musk wanted as he was suspicious of rival car companies, along with losing a number of small investors. There would also be a catch as the two explained the money being provided would have strings attached such as having a lot of say in how the company is run.

A day later, Musk met with the board saying that he would be withdrawing the idea of going private.

Source: Bloomberg, New York Times, Wall Street Journal (Subscription Required)

Over two weeks ago, Tesla CEO Elon Musk took everyone by surprise by announcing his intention to take Tesla private. But those plans have been scrapped.

Last night, Musk published a blog post saying that he had met with the board and “let them know that I believe the better path is for Tesla to remain public. The Board indicated that they agree.”

"Although the majority of shareholders I spoke to said they would remain with Tesla if we went private, the sentiment, in a nutshell, was ‘please don’t do this,” wrote Musk.

In a separate statement, Tesla's board of directors confirmed Musk's decision.

"Yesterday, we held a Board meeting, during which Elon reported on the work he and his advisors have been doing in connection with this effort. Elon communicated to the Board that after having done this work and considered all factors, he believes the better path is to no longer pursue a transaction for taking Tesla private. After discussing this, we dissolved the Special Committee. The Board and the entire company remain focused on ensuring Tesla’s operational success, and we fully support Elon as he continues to lead the company moving forward," the statement says.

This saga began with a tweet back on August 7th,

This tweet sent everyone into a tizzy and caused NASDAQ to halt trading of Tesla stock for a few hours. There was one big question, how was Tesla going to fund this? Musk revealed a week later that it would be Saudi Arabia’s Public Investment Fund, though reports say the fund isn't so thrilled about this idea. As we reported earlier this week, the fund is in talks with another electric automaker, Lucid Motors.

The announcement has prompted the U.S. Securities and Exchange Commission (SEC) to subpoena the company, along with a number of lawsuits from upset investors.

Source: Tesla, Bloomberg

Last Tuesday, Tesla CEO Elon Musk tweeted out that he was considering taking the automaker private and had "secured" funding. Since then, the question of who is providing the funding has been left unanswered. Today, Musk wrote up a blog post that provides some insight.

The post reveals that Saudi Arabia's Public Investment Fund is responsible for the possible funding of Tesla's move to private. In the last two years, representatives of the fund have met with Musk and discussed possibly taking the company off the market. The most recent meeting was on July 31st, after the fund bought an almost 5 percent stake.

"During the meeting, the Managing Director of the fund expressed regret that I had not moved forward previously on a going private transaction with them, and he strongly expressed his support for funding a going private transaction for Tesla at this time. I understood from him that no other decision makers were needed and that they were eager to proceed," Musk wrote.

"I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving. This is why I referred to “funding secured” in the August 7th announcement."

The board was notified about Musk's intentions to take Tesla private on August 2nd. From there, the board held a meeting (minus Musk and his brother Kimbal, who is also a board member) to discuss this possibility. Musk also planned to speak to the company's largest shareholders about the possible move.

Towards the end of the post, Musk said he is continuing "to communicate with the Managing Director of the Saudi fund," and that "he has expressed support for proceeding subject to financial and other due diligence and their internal review process for obtaining approvals."

But there is one big question that is unanswered; did Musk secure the funding when he made that tweet or not? As we reported last week, the Securities and Exchange Commission (SEC) is looking into whether or not Musk was lying about the funding. 

If Musk was able to get the funding, it will be quite awhile before Tesla can become private. Per the blog post, the board needs to put together a plan that it can agree upon. From there, shareholders will vote on the plan. If approved, Tesla can start on the next steps.

Source: Tesla

Everyone seemed to lose their mind when Tesla CEO Elon Musk tweeted out Tuesday that he was considering taking the company private. For a time, the NASDAQ had to halt trading of Tesla stock because of massive fluctuations in the share price. The reasoning behind this move made sense as it would allow the company to focus on the long-term. But this tweet has also brought some unattended problems.

Reuters has learned from sources at Tesla that the board of directors is seeking more information from him as to how the buyout will be financed. As we reported yesterday, the board has talked about this idea for some time. But a source reveals that it hasn't gotten either a detailed plan from Musk, nor any information as to who will provide the funding.

Both Reuters and CNBC are reporting that the board will make a decision on whether or not to do a formal review of Musk's proposal in the coming days. It also plans to speak with financial advisers about explore this proposal.

Sources tell CNBC that the board will ask Musk to recuse himself from the review process of his proposal. He'll need to hire his own advisers for a review.

There is another twist in this story. Musk has talked to Saudi Arabia's sovereign wealth fund about a take-private deal, according to a source. This is likely due to the Saudi's Public Investment Fund buying between a 3 to 5 percent stake in the automaker, worth about $2 billion that was brought to light this week.

Tesla's board isn't the only group interested in Musk's plan. Last night, the Wall Street Journal reported that the Securities and Exchange Commission (SEC) is inquiring whether or not Musk was telling the truth when said that he had secured funding for the buyout. Under U.S. law, companies and officials cannot give misleading information about events to shareholders.

It is unclear whether or not this will cause an investigation be opened or not. A SEC spokesman declined to comment.

Musk could also be in trouble if the SEC find evidence that his tweet was aimed at increasing the company's share price.

We'll keep you posted if anything new breaks.

Source: Wall Street Journal (Subscription Required), Reuters, CNBC

Yesterday afternoon, Tesla CEO Elon Musk tweeted this

This sent everyone into a tizzy, wondering if he was being serious or not. In fact, NASDAQ had to halt trading of Tesla for a couple of hours because of this tweet. Thankfully, Tesla posted an email that was sent by Musk to employees explaining why. The key reason comes down wanting to minimize distractions and begin focusing on the long term.

"But the reason for doing this is all about creating the environment for Tesla to operate best. As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders. Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term," Musk wrote in the email.

Musk also made light of the short sellers who bet against Tesla succeeding, saying the company was the most shorted stock "in the history of the stock market". By going private, it gives the company some protection.

How would this changeover to private work? Musk said he would like to offer shareholders to either remain or sell their shares at $420 per share (a bit higher than the $375.16 share price at the time of this writing). He would also like Tesla's employees to remain as shareholders.

"Basically, I'm trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible," the email states.

This move will need to be approved by Tesla's board of directors. In a statement released this morning, several members of the board published a statement that echoes the reasons given by Musk. It also reveals that this idea had been on Musk's mind for sometime.

"Last week, Elon opened a discussion with the board about taking the company private. This included discussion as to how being private could better serve Tesla's long-term interests, and also addressed the funding for this to occur. The board has met several times over the last week and is taking the appropriate next steps to evaluate this," the statement says.

One of those "appropriate next steps" is getting enough money to do the buybacks. Musk in his tweet said he has funding for it, but it is unclear who and how much is being provided. According to MarketWatch, the buyout would total $72 billion if all of the shareholders decide to sell.

Source: Tesla, MarketWatch

Tesla announced their second-quarter results this afternoon and the picture that it paints is somewhat cloudy. The company reported a loss of $717.5 million for the quarter, marking the seventh consecutive loss, On the upside, Tesla's revenue for the quarter was about $3.4 billion. 

In terms of production, Tesla said it produced 53,339 vehicles for the quarter. More importantly, the company delivered 18,449 Model 3s in that timeframe.

During the earnings call, CEO Elon Musk said the company would become profitable towards the end of this year as it ramps up production and deliveries of the Model 3.

"Our goal is to be profitable and cashflow positive in every quarter going forward," said Musk.

To reach this, Musk has set new goals of producing 6,000 Model 3s per week by the end of August, and then raising that to 10,000 vehicles next year. Currently, Tesla is producing "approximately 5,000 Model 3 cars" per week.

Source: Tesla

Tesla is asking suppliers to refund some of the cash on past work as a way to make the automaker profitable.

The Wall Street Journal obtained a memo that was sent to a Tesla supplier last week. The company requested that the supplier return " a meaningful amount of money of its payments since 2016." The memo goes onto say that the request is essential to Tesla's "continued operation" and would "continue the long-term growth between both players."

Its unclear how many suppliers received this memo. Tesla's list of suppliers include Magna, Panasonic, and Robert Bosch GmbH.

Tesla declined to comment on the memo, but did confirm that it is seeking price cuts from suppliers on various projects, some which date back to 2016. The company said such requests are a standard part of negotiations with suppliers. Supply-chain consultants say this is normal for automakers to request price reductions on current projects. Asking for money back on a completed one is very unusual.

“It’s simply ludicrous and it just shows that Tesla is desperate right now. They’re worried about their profitability but they don’t care about their suppliers’ profitability,” said Dennis Virag, a manufacturing consultant.

This report casts serious questions as to Tesla's money situation. The company has been burning through a billion dollars per quarter, and finished the first quarter with $2.7 billion cash on hand.

Source: Wall Street Journal (Subscription Required)

Tesla only has one assembly plant in Fremont, California. But that could be changing in the near future.

Yesterday, Tesla and the and the Shanghai government reached a preliminary deal for a new assembly plant. The automaker expects production in about three year's time, provided they can get the approvals and permits needed. Tesla says the plant could build up to 500,000 vehicles annually. According to Bloomberg, the plant is expected to build the Model 3 sedan and upcoming Model Y crossover.

Tesla building a plant in China doesn't come as surprise. The country is the largest market for electric vehicles, and most forecasters believe sales will skyrocket as government regulations push toward a goal of 100 percent electric vehicles by 2030.

There are some questions about this new factory. For one, how is Tesla going to pay for this new plant? At the end of the first quarter, the company burned through $2.7 billion, mostly due to various issues dealing with ramping up Model 3 production. The Shanghai government said it would help cover some of capital costs.

The other is will Tesla need to share technologies with a Chinese partner. Currently, any foreign automaker has to enter into a joint venture with a Chinese automaker and transfer various technologies.

"For technology transfer, it is a matter subject to negotiation between the enterprises," said Huang Ou, deputy head of the Shanghai government’s economy and information technology commission.

The Chinese government announced back in May that it would scrap the rules for "capping foreign ownership of new-energy vehicle ventures" by 2022.

Source: Bloomberg, Reuters

Tesla has finally done it. Over the weekend, the company hit their milestone of producing 5,000 Model 3s in a week only a few hours after the deadline set by CEO Elon Musk - the end of the second quarter. Two Tesla factory workers told Reuters that the 5,000th Model 3 cleared final inspection around 5:00 AM PDT.

“We did it!! We either found a way or, by will and inventiveness, created entirely new solutions that were thought impossible. Intense in tents. Transporting entire production lines across the world in massive cargo planes. Whatever. It worked,” said Tesla CEO Elon Musk in an email to employees.

“I think we just became a real car company.”

Reaching this goal was quite hard for the automaker. Numerous delays and production issues caused Tesla to push back production milestones on a seemingly regular basis. The company had to build a makeshift assembly line in a tent within the past month to help bolster production.

But can Tesla keep up this output? There are concerns they might not be able to do it. According to one worker, Tesla sent employees from other departments to the Model 3 production line to keep it going. This including shutting down parts of the factory such as the Model S production line.

“Reaching it is one thing,” said  Dave Sullivan, manager of product analysis for AutoPacific Inc to Bloomberg.

“Consistently producing 5,000 per week with outstanding quality is another.”

Source: Bloomberg, Reuters

In a staff-wide email sent today, Tesla CEO announced that the company would be laying off nine percent of its staff across the company. The cuts comes as part of "an effort to reduce costs and become profitable.”

“Given that Tesla has never made an annual profit in the almost 15 years since we have existed, profit is obviously not what motivates us. What drives us is our mission to accelerate the world’s transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable. That is a valid and fair criticism of Tesla’s history to date,” wrote Musk.

The layoffs will not effect workers on the production, instead focusing on those working in various white-collar positions. Musk stressed this will not affect plans on reaching production targets for the Model 3 in the coming months.

“Tesla has grown and evolved rapidly over the past several years, which has resulted in some duplication of roles and some job functions that, while they made sense in the past, are difficult to justify today,” Musk wrote.

Those being laid off will get "significant salary and stock vesting" by the company.

Source: Bloomberg, Fortune, Roadshow

There were serious concerns before the beginning of Tesla's annual shareholders meeting mostly due to CEO Elon Musk's erratic behavior over the past month or so. But Musk was on his best behavior during the meeting, where some big announcements were made.

On the business front, Tesla shareholders voted to keep Antonio Gracias, James Murdoch, and Kimbal Musk on the board, despite criticisms from a group of shareholders that they aren't fully independent from Musk. There was also the proposal of splitting the chairman and CEO posts held by Musk, with one investor saying it has become difficult for Musk to oversee the company. This motion would be defeated.

"At Tesla we build our cars with love. At a lot of other companies, they're built by marketing or the finance department and there's no soul. We're not perfect but we pour our heart and soul into it and we really care," said Musk, choking up on the mic after the voting took place.

From there, Musk went on to talk about what's in the pipeline for Tesla. He started with the Model 3 by claiming it was the best selling mid-sized premium sedan in the U.S. and had a graph to prove it - though we're a bit dubious as to this claim since the graph doesn't label the x and y axises.

Musk also claimed that Tesla is producing 3,500 Model 3s per week and is “quite likely” to be building 5,000 of the sedans a week by the end of this month. This will happen through the addition of a third production line at their Freemont, CA Plant. 

“The biggest constraint on output is general assembly. We can probably get to 5,000 a week with the current two general assembly lines. But with the third one, I’m highly confident that we can exceed 5,000 units per week,” said Musk.

Production of the mystical $35,000 Model 3 will begin sometime early next year according to Musk. 

In other product news, the Model Y crossover was teased once again. The current plan is to reveal it next March with production to begin in 2020.

Autopilot made some news during the meeting as Tesla announced a new free trial to owners who haven't decided to opt-in. Musk revealed that a planned Autopilot upgrade will begin rolling out later this week and promises a marked improvement.

Other news from the meeting:

• Tesla will be adding another plant in Shanghai. The plant will produce battery packs, cars, and powertrains. More details may be announced as soon as next month. Musk also revealed plans to build a plant in Europe towards the end of this year.
• Tesla service centers will be increasing in size and adding body shops. This could solve one of biggest issues of the current system to repair Teslas involved in accidents. Currently, Tesla requires a body shop to order parts directly from the factory, which takes weeks for parts to be delivered.
• The semi-truck has been going through various revisions in terms of design and powertrains with the goal of making it a world-wide vehicle.

Source: Bloomberg, (2), Reuters, Roadshow

Over two years ago, hundreds of thousands of people put down $1,000 deposit to order their very own Tesla Model 3 with the hoping of getting it in 2018. Flash forward to now and a growing number of those have been asking for their money back.

Second Measure, a company that analyzes billions of dollars in anonymized credit and debit card purchases to determine various trends said in a post today that 23 percent of reservation-holders have asked for a refund as of April, a noticeable increase from 12 percent last August. Contrast this with only 8 percent of holders that have configured a Model 3 for production. The remaining 69 percent is a mixture of those waiting for their turn to configure their vehicle and those who are waiting for a refund - numbers Tesla only knows.

A Tesla spokesperson told Recode that their internal data "does not align" with Second Measure's data, but would not go into specifics into as to how far off.

Tesla has been struggling with Model 3 production for some time, pushing back production targets several times. At the moment, Tesla is targeting "approximately 5,000 Model 3's per week in about two months."

Source: Recode, Second Measure

.Over the weekend, Tesla CEO Elon Musk took to Twitter and announced a new powerful version of the Model 3. The version according to Musk will cost $78,000 and will be "quicker & with better handling.

The last line of Musk's tweet made us chuckle since the current Model 3 warranty doesn't permit racing and autocross.

Quote

Driving over uneven, rough, damaged or hazardous surfaces, including but not limited to, curbs, potholes, unfinished roads, debris, or other obstacles, or in competition, racing or autocross or for any other purposes for which the vehicle is not designed.

 

Nevertheless, it has brought up questions as to where the $35,000 Model 3 is. For a number of buyers who plopped down the $1,000 deposit, this is the model they are waiting for. Musk gave a roundabout answer to where the low-priced Model 3 is.

There is some truth to Musk's madness. Tesla is burning through cash like it is going out of style. According to Bloomberg, the company used up more than a billion in the first quarter. One way Tesla raises money is rolling out their most expensive variants of the Model S, X, and 3. Once they have enough cash, they will begin production of less expensive models.

But the Model 3 has proven to be very problematic for Tesla. Various delays and production issues have caused Tesla to push back production targets for the Model 3 again and again. Tesla is aiming to produce 5,000 Model 3s a week by the end of the second quarter.

“The idea that it’s supposed to be a car for everyone is kind of laughable. Anyone who wanted a base model may have to wait years out,” said Ivan Drury, senior manager of industry analysis at Edmunds.com.

Source: Bloomberg (Subscription Required)

Tesla's 'production hell' is continuing on and is causing the automaker to shut down the Model 3 assembly line for almost a week.

Reuters has learned from two sources that Tesla will stop production of the Model 3 from May 26th to 31st in an effort to fix the various bottlenecks on the line. A Tesla spokesperson declined to comment.

Tesla warned that there would be 10 days of temporary shutdowns this quarter in an effort to try and get Model 3 production back up and running smoothly. CEO Elon Musk said the shutdowns would be used to make upgrades to reach a goal of building 5,000 Model 3s by the end of June. Already, Tesla stopped production for a few days last month, and also in February.

The key problem is Tesla's over-reliance on robots for production, something Musk acknowledges. 

Source: Reuters

A new report from the Wall Street Journal reports that engineers at Tesla wanted to put more safeguards for Autopilot to keep drivers attentive to the road, but were rejected by executives.

This has been concern within Tesla since the launch of Autopilot and only intensified in 2016 when a Model S crashed into a trailer in Florida. The driver was killed and an investigation revealed that Autopilot was on at the time. After the crash, Tesla brought in suppliers to talk about possible ways to keep a driver's attention on the road. Two ideas mentioned in the report included,

• Tracking the eyes of a driver to make sure they are watching the road. This would use a camera and infrared sensors. Cadillac uses something similar with their SuperCruise system.
• Incorporating sensors into the steering wheel to monitor whether a driver's hands were on the wheel. Autopilot already has a sensor to monitor small movements of the wheel and will issue a warning to the driver if it doesn't detect any movement. The downside is that the driver can quickly touch the wheel to stop the warnings for a few moments.

However, the ideas were thrown out by Tesla executives (including CEO Elon Musk) due to costs and concerns that the technologies would be ineffective or annoy drivers.

“It came down to cost, and Elon was confident we wouldn’t need it,” a source told the Wall Street Journal.

A key issue with Autopilot is the false sense of confidence that drivers give to it - see the number of near-miss videos on Youtube as evidence. Tesla says in their owner manuals Autopilot has limitations and drivers must agree to a screen when Autopilot has engaged, "that it is their responsibility to stay alert and maintain control." Musk admitted during Tesla's recent earnings call that complacency with Autopilot was an issue.

“When there is a serious accident, it is almost always, in fact, maybe always the case, that it is an experienced user,” said Musk.

“And the issue is...more one of complacency, like we get too used to it.”

Source: Wall Street Journal (Subscription Required)

The bad luck is continuing at Tesla. Buzzfeed News reports that Tesla has temporarily shut down the Model 3 production line at the Freemont plant for a week. Employees at Tesla tell Buzzfeed the announcement came suddenly and they have the choice of using vacation days or stay home without pay. Some will get the chance to work in other parts of the plant. A Tesla spokesperson said the shutdown is due to the company wanting to “improve automation.”

This is the second time this year that Tesla has shut down the Model 3 production line. Back in late February, reports came out that Tesla had shut down the Model 3 production line. 

"Our Model 3 production plan includes periods of planned downtime in both Fremont and Gigafactory 1. These periods are used to improve automation and systematically address bottlenecks in order to increase production rates. This is not unusual and is in fact common in production ramps like this," said Tesla in a statement at the time.

It should be noted this exact statement was issued again after news broke about the second shutdown.

This comes on the heels of an interview last week with CBS' This Morning where CEO Elon Musk admitted the Model 3 had too much new technology and relied too much on robots in the production process.

Source: Buzzfeed News, Automotive News (Subscription Required)

Saturday night at Tesla's Fremont, California assembly plant was a sight to behold.

"...packed with people Saturday evening as the last hours of the quarter drew to a close. Red couches and tall white tables were set up outside, a DJ played music and a truck selling Vietnamese food was on hand," Bloomberg reports.

Was Tesla was celebrating an important milestone? No, the company was using this to try and motivate their workers to get more Model 3s out the door to provide some good news for investors.

The past week could be considered one of the worst for the electric car maker.

• Moody's downgraded Tesla's credit rating further into junk status due to production issues and growing obligations.
• The NTSB has opened a new investigation into Tesla after a driver was killed when his Model X crashed into a barrier and caught fire. 
  • "Unclear if automated control system was active at time of crash. Issues examined include: post-crash fire, steps to make vehicle safe for removal from scene," the NTSB wrote earlier in the week.
  • Yesterday, the NTSB said it was "unhappy" with Tesla releasing information into the crash on their blog. The NTSB has a long history of guarding their investigations very closely. Part of this is due to the board being a small agency, which means it relies quite heavily on the participants involved in an investigation.
• On Thursday, Tesla recalled 123,000 Model S vehicles built before April 2016 for a power-steering issue.
• Yesterday, Tesla CEO Elon Musk posted a number of tweets, saying the company had gone bankrupt. It was an April Fool's joke, but it did not go over so well.

In early trading this morning, shares in Tesla dropped as much as 5.7 percent.

Tesla estimated they would deliver 10,000 Model 3s by the end of the first quarter. We'll likely find out in the next few days whether or not Tesla was able to pull this off when their first-quarter report comes out. But a number of analysts believe Tesla came up short.

Source: Bloomberg

PepsiCo has placed a pre-order for 100 of Tesla's recently released Semi-Truck.  Wal-Mart, J.B. Hunt, and Sysco have also placed orders. Reuters tallies the total so far at 285 units.  Tesla was initially asking for a $5,000 reservation fee, but has since increased that to $20,000.

Pepsico plans on using the trucks for lighter snack items and fixed routes between distribution centers.  An order of 100 trucks represents about 1% of Pepsi's 10,000 strong fleet. Over 260,000 conventional semi-trucks are produced each year.

The Tesla Semi has a promised range of 500 miles with 80,000 lbs at 65 mph. Promised performance increases over a conventional diesel include the ability to maintain 65 mph up a 5% grade versus 45 mph for the typical diesel, and an unladen 0-60 time of just 5 seconds and 20 seconds with an 80,000 lb. load.

The Tesla Semi will go into production in 2019, but test mules have already been spotted in the wild.

More than 90 percent of Tesla Model S and X models that roll off the assembly line require fixes before they are shipped. This figure comes from nine former and current Tesla employees that spoke to Reuters this week citing data from the company's internal tracking system.

At Tesla “so much goes into rework after the car is done ... that’s where their money is being spent,” said a former supervisor.

Industry experts say it is critical for an automaker to get the quality right before initial production as repairs waste time and money. Other automakers such as Toyota only have an average of "fewer than 10 percent of their cars" requiring some sort of fix.

Some of this can be attributed to Tesla's pressure to keep the production line moving, even when there was some sort of issue. This caused certain batches of vehicles to not have various parts such as windshields or bumpers. The understanding according to the workers is they would be fixed later.

Other issues such as doors not closing or missing trim pieces show Tesla is still struggling with getting the basics right.

Defects included “doors not closing, material trim, missing parts, all kinds of stuff. Loose objects, water leaks, you name it,” another former supervisor said. “We’ve been building a Model S since 2012. How do we still have water leaks?”

Tesla calls models with quality issues “kickbacks” and are either fixed on the production line or head to one of Tesla’s outdoor parking lots for repair. According to the workers, one of the lots "has exceeded 2,000 vehicles at times".

“Our goal is to produce perfect cars for every customer. Therefore, we review every vehicle for even the smallest refinement. Most customers would never notice the work that is done post production, but we care about even a fraction of a millimeter body gap difference or a slight paint gloss texture. We then feed these improvements back to production in a pursuit of perfection,” Tesla said in a statement to Reuters.

The company declined to provide any post-assembly defect rates and denied those repair lots exist.

Source: Reuters

Tesla is known for building quick vehicles, but they're also known for burning through a lot of cash. Bloomberg recently crunched some numbers on how fast Tesla goes through money and the amount is quite shocking.

According to their data, Tesla has been burning through $8,000 per minute (about $480,000 in an hour) for the past 12 months. At this rate, Bloomberg predicts that Tesla could run out of money by next August.

Tesla spending money like it is going out of style is not all that surprising. The automaker is trying to ramp up production of the Model 3 along with dealing with various issues. Still, the $8,000 per minute figure gives us an idea of how far Tesla still has to go before exiting what it calls 'production hell'.

Investors still are bullish on the electric car builder, with a share price of $317.81 at the close of trading yesterday. Tesla also has a market capitalization of more than $53 billion, beating the likes of Ford ($48 billion). The difference being is that Ford is able to consistently make a profit.

Tesla says they have enough cash to meet its target of building 5,000 Model 3 sedans per week by the end of March, and expects to “generate significant cash flows from operating activities” afterward. The company is also reservations on their Roadster due in 2020* to help raise funds. Buyers will need to plop down $50,000 for the standard model or $250,000 for the Founders Edition. Tesla will only produce 1,000 models of the Founders Edition, meaning they could possibly produce $250 million in income. 

“Whether they can last another 10 months or a year, he needs money, and quickly,” said Kevin Tynan, senior analyst with Bloomberg Intelligence. Tynan estimates that Tesla needs to raise $2 billion or more in capital by mid-2018 to stay afloat.

Source: Bloomberg

The past couple of months have not been pleasant for Tesla. Production delays of Model 3, the firing of 700 workers, and various parts of the Model 3 being handmade have put a negative light on the electric car company. Yesterday, Tesla announced their Q3 results and the news isn't pretty.

Tesla reported a $671 million loss for the quarter, making it the largest quarterly loss. The company burned through $1.42 billion in cash in the quarter as it worked on ramping up Model 3 production. Revenue was slightly up to $2.98 billion.

Tesla also revealed that it is pushing back its ambitious goal of 5,000 Model 3s per week by the end of this year to the end of the first quarter of 2018. On a call with analysts, Tesla CEO Elon Musk said issues at their Nevada Gigafactory was the primary constraint for Model 3 production with a subcontractor that “really dropped the ball.” Software used at the plant had to be rewritten from scratch and mechanical and electrical elements of one part of the plant had to be redone.

Musk also said the welding for the mostly steel body for the Model 3 has proven to be quite complex.

“There are thousands of processes to build the Model 3. We can only move as fast as the least competent elements of that mixture.”

Only three months ago, Tesla was claiming that it would build 10,000 Model 3 cars per week in 2018. When asked if Tesla would hit this target, Musk reportedly was silent for about 10 seconds before giving an answer. When they reach 5,000 Model 3s per week, the company will introduce a “capacity addition” to increase the run rate to 10,000 per week. No mention of how long this addition would take place.

But there are more issues than Tesla is letting on. Various reports over the past month have said that significant portions of the Model 3 were being made by hand and that body line equipment used on the production line was only getting installed. Tesla has denied these reports.

Shares in Tesla have dropped 7.1 percent to $298.24 as of 2:26 PM. 

“We left the call frustrated with the lack of transparency from Tesla management,” said Jeffrey Osborne, a Cowen & Co. analyst in a note to clients.

“Elon Musk needs to stop overpromising and under delivering and the board should rein in a CEO who publicly shares his aspirational goals that have rarely been hit.”

Source: Automotive News (Subscription Required), Bloomberg, Tesla

If you happened to be perusing the Monterey, CA Craigslist this morning, you might have come across an interesting ad.

Someone had posted an ad for a Tesla Model 3. The vehicle allegedly has about 2,000 miles on the odometer. Like many of Model 3s currently rolling off the production line, this is the long-range variant with a 310-mile range. Other features include a panoramic glass roof, upgraded sound system, and "Aero" wheels. The price? $150,000.

Our favorite part of the ad is the last line; "THIS IS REAL." Red flag anyone?

The ad has been taken down since various outlets started reporting on it. There is an interesting reason as to why. If you look at the ad, you'll notice a VIN number of 209. As Electrek notes, Tesla employees and company insiders are the only people getting Model 3s at this time. Customer deliveries are expected to begin this month. If you are a Tesla employee, there is language in the Model 3 ordering agreement that states you cannot sell a Model 3 more than the original price that you bought it for. 

Quote

Because employees are receiving special priority, all Model 3 cars prioritized to employees must be registered to you or your family member and may not be resold for more than the original price. Reservation holders will agree to these terms when their order is placed.

Electrek was able to confirm this Model 3 is owned by an employee of a Tesla store in Monterey. 

Source: Electrek, Monterey Craigslist via Internet Archive

As Model 3s begin to arrive at Tesla dealerships, we are beginning to get some answers to some of the key questions we have. Chief among those questions deal with how the Model 3's touchscreen works. Thanks to some videos that have made their way onto the internet, we have some answers and major concerns.

We know that the screen would control many functions of the vehicle, but didn't know the extent. Thanks to the video we now know that most functions are controlled through the screen. Want to change the fan speed? You need to use the touchscreen. Open the trunk? Need to use the touchscreen. If it begins raining and you need to turn on the wipers, you need to use the touchscreen. Is it just us or is this becoming a distraction disaster?

We also learned that Model 3s at the moment doesn't come with either FM Radio or Bluetooth streaming. The lack of the former will likely not make most annoyed, but the latter will. If you want to listen to music at the moment, you need to use a third-party streaming service over the car's 4G internet connection. Tesla has said that an OTA update that will bring FM and Bluetooth streaming is planned, and believed to be coming soon.

Source: Autoblog

After September 24th, Tesla will end production of the rear-wheel drive Model S 75. The model is the cheapest way to get into the Model S with a base price of $69,500. After the 24th, the Model S 75D with its dual motor AWD setup will become the entry-level model with a base price $74,500. This will leave the Model 3 as the only Tesla model that is available with RWD.

This news was first broke by Electrek back in July, although no official end date was given.

We can see a couple of reasons for Tesla dropping the RWD Model S 75. One is to help streamline production line and hopefully get more vehicles out. It also gives further differentiation between the Model 3 and Model S.

Source: Roadshow, Electrek

When Tesla finally revealed the Model 3 a couple weeks, we learned about a number of items such as max range (220 or 310 if you opt for the larger battery), how fast they hit 60 mph, and what will come standard. What wasn't talked about was how big the battery was and power figures. Thanks to some EPA documents, we have some idea on both.

InsideEVs found some preliminary documents dealing with the long-range Model 3 and figured out that has an 80.5-kilowatt-hour battery pack - the document says it is a 230 Ah battery pack with 350 V nominal voltage. We should note that CEO Elon Musk has said previously that the Model 3 could not take anything larger than a 75-kWh battery. But, InsideEVs says Musk could have been referring to useable, not the max capacity of the pack.

We also have learned that the long-range Model 3 produces 258 horsepower. Sadly, no torque figure was given in the documents.

Source: InsideEVs

Tesla CEO Elon Musk made a surprise announcement earlier this year with the upcoming Model Y crossover using a new platform and not the one used for the Model 3. Musk has changed his tune, however.

“Upon the council of my executive team . . . who reeled me back from the cliffs of insanity—much appreciated—the Model Y will in fact be using substantial carryover from Model 3 in order to bring it to market faster,” said Musk during the second quarter earnings call yesterday.

How much faster? Previously, Musk said the Model Y (if that is the final name) could arrive by 2019. But during this call, Musk did not give a date - possibly a wise idea.

Source: Autoblog, Car and Driver

There really hasn't been much information about the Tesla Model 3 since CEO Elon Musk revealed the concept last March. Speculation and spy pictures revealing certain details were all we had. But last night at the automaker's Fremont, California production facility, Tesla finally spilled the beans on the Model 3 along with delivering the first 30 models.

The Model 3 will begin at $35,000 and delivers a total range of 220 miles. Tesla doesn't list any power specs for the electric motor, but does mention it will hit 60 mph in 5.6 seconds and a top speed of 130 mph. Six exterior colors will be available - aside from black, the other color choices add $1,000 to the bottom line. 18-inch wheels are standard while 19-inch wheels are a $1,500 option. The interior is a bit barren with the dash not featuring any visible vents and a large 15-inch screen that functions as the instrument cluster and control center for the Model 3.

The list of standard equipment is quite spartan, to say the least.

• Textile Upholstery
• FM/Streaming Audio System
• WiFi and LTE Connectivity
• Dual USB Ports
• Dual-Zone Climate Control
• Front/Rear Parking Sensors and Backup Camera

You also will not get a key for your Model 3. Instead, Tesla uses a smartphone app that uses Bluetooth to connect the vehicle to unlock/lock and start the vehicle. There will also be a credit-card sized near-field-communication (NFC) card that will do the same function.

All Model 3s will come with the capability for Autopilot with eight cameras, forward radar, and 12 ultrasonic sensors around the vehicle. Capability is the key word as you'll need to spend $5,000 if you want active cruise control, lane keep assist, lane change assist, and self-parking. At least the system does provide collision avoidance and automatic braking.

There is a fair amount of options available for the Tesla Model 3.

• Long Range Battery for $9,000: Brings forth a larger battery (Tesla didn't reveal the size) that increases the range to 310 miles. Acceleration drops to 5.1 seconds for the run to 60 mph. 
• Premium Package for $5,000: Adds leather upholstery, open pore wood trim, 12-way power seats with memory, power-adjustable steering wheel, premium audio system, center console, auto-dimming and power-folding side view mirrors, and rear USB ports.
• Full Self-Driving Capability for $3,000: Requires the Enhanced Autopilot package and will be available at a later date.

Of course, the elephants in the room about the Model 3 is whether or not Tesla can meet their ambitious production goals and if they can avoid the numerous issues that have plagued both the Model S and X. Like everyone, we'll be watching with baited breath.

Source: Tesla, InsideEVs

Hundred of thousands of people plopped down $1,000 to reserve a Tesla Model 3 last year. At the time, buyers were told not to expect their Model 3 until the end of 2018. Since then, buyers haven't been told a thing. When will their vehicle arrive? What options will be available? What will be the final price? None of these questions have been answers and some now are looking for answers.

Bloomberg spoke with some people that dropped $1,000 deposit to get on the Model 3 reservation list. All of the people in the story want more information and hope they get some answers this Friday as Tesla will be holding an event to hand over the Model 3s to the first 30 customers.

Quote

The lack of information received from Tesla “makes me 100 percent more nervous,” said Patrick Herrity, a 34-year-old business consultant in Virginia who made his Model 3 reservation online. He said he understands the company is being secretive to ward off competitors but hopes this week’s event will shed more light on his next ride.

What Herrity wants is a fully-loaded Model 3 with all-wheel drive and a sunroof -- options that won’t be available in the first cars to roll off the assembly line in Fremont, California. Musk has said the Model 3 will initially be built with the simplest design, unlike the feature-heavy Model X sport utility, which was plagued by early production problems.

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One key bit of information many buyers would like to know is where they fall on the reservation list. The U.S. begins to phase out $7,500 federal tax credit for electric vehicles once an automaker has sold 200,000 vehicles. Tesla is hoping to produce 20,000 Model 3s by the end of the year. If this holds, Bloomberg projects that Tesla will cross this threshold sometime next year, leaving some buyers with a more expensive proposition. 

Source: Bloomberg
Pic Credit: Elon Musk via Twitter

If you are one of the lucky people to order their Tesla Model 3 first, you'll be somewhat disappointed in the number of options available.

At Tesla's annual shareholder meeting, CEO Elon Musk said buyers of the first Model 3s will only have two configuration options; colors and wheels. This is an effort to help ramp production of the Model 3 quickly.

"You just need to decide what color you want and what size wheels, at least for the initial production," said Musk.

Musk went on to say there would be more options for the Model 3, but didn't give a timeframe as to when they would arrive. Also, the Model 3 would only be rear-wheel drive for the time being. An all-wheel drive option will arrive next year.

Source: Reuters

Thanks to a poster on the Model 3 Owners Club forum, we have some new and juicy information concerning the Model 3. The images posted come from an infographic being handed out to Tesla employees as "talking points" to try and sway people away from Model 3. A Tesla spokesperson confirmed to Road and Track the infographic is real and accurate.

Some information listed on the infographic is already known such as a 215+ mile range and having to pay to use Tesla's Superchargers. There is also new information such as a 0-60 mph time of 5.6 seconds (though it is unclear what is the powertrain layout is being quoted), and a total of 14 cubic feet between the front and rear cargo holds.

The infographic also mentions something interesting about delivery timing - "As we continue to build out our production capacity to meet the higher number of advanced reservations, deliveries for Model 3 orders placed today are not expected until mid 2018."

Source: Model 3 Owners Club, Road & Track
Pic Credit: Model 3 Owners Club

In their recent shareholder update for 2017, Tesla reported strong Q1 revenues of $2.7 billion dollars, more than doubling performance of the same quarter last year and an improvement of $411m over the final quarter of 2016. However, losses also grew from $282m last year to $330m in 2017, or a per-share loss of $2.04.

Tesla reports that most of the loss comes from capital expenditures for the Model-3 development, Gigafactory development, and acquisition related activity surrounding SolarCity. 

Subtracting SolarCity revenues, Automotive related revenue is reported at $2.289 billion, up 123% year over year.  Vehicle margins excluding ZEV credits are at 27.8%. 

Energy generation revenue is up significantly over Q4 2016 to $214m. 

Currently, Tesla is sticking with an outlook of 61% to 71% growth in annual vehicle deliveries, however Tesla indicated they will revise this guidance in Q3 after Model-3 production begins in July. 

Photo courtesy of Tesla Motors

Tesla Q1 2017 Shareholder Update (*PDF Warning*)

Tesla held their first quarter earnings call yesterday. The company reported revenue in the quarter that more than doubled and that they are on track on getting the Model 3 in production in July. But this was overshadowed by some comments made by CEO Elon Musk.

"We have seen some impact of Model S orders as a function of people being confused" that Model 3 is the upgrade to Model S, Musk said on a conference call.

Yes, it seems some of Tesla's prospective buyers believe the new Model 3 - the upcoming entry-level model - is the replacement for the Model S. This misconception has likely risen as Tesla has been promoting this vehicle since last July. Tesla's worry is that this misconception will draw people away from the Model S.

"We want to be super clear that Model 3 is not version three of our car. Model 3 is essentially a smaller, more affordable version of the Model S with fewer features," said Musk.

"The Model S will be better than Model 3. As it should be, as it's a more expensive car."

Sadly, customer deposits in the first quarter don't reflect that. Deposits on the Model S and X dropped 7 percent.

Source: Reuters

The Model 3 is Tesla's most anticipated vehicle and biggest gamble the company has undertaken. But this gamble has become more risky thanks to a decision concerning the production line.

Reuters reports that Tesla is skipping a step most automakers undertake when producing a new vehicle. Prototype tools are bought in on the production line to help determine issues in terms of fit and finish. Once these issues are worked out, the prototype tools are scrapped and automakers place orders for permanent and expensive tools. But Musk told investors last month, Tesla was jumping into the permanent and expensive part first so they can meet their self-imposed volume production deadline of September.

"He's pushing the envelope to see how much time and cost he can take out of the process," said Ron Harbour, a manufacturing consultant at Oliver Wyman.

According to a source, this 'soft tooling' caused problems for Model X. Due to a tight timeline to get the vehicle into production, Tesla was unable to take any of the lessons learned from this before ordering the final production tooling.

"Soft tooling did very little for the program and arguably hurt things," said the source.

Musk said computer simulations has helped with skipping the prototype tooling stage.

This move fits Elon Musk's tendency to take big gambles and do things a bit different than what is expected in the industry. Most of the time, it has paid off. 

The problem is if this equipment proves to be flawed in some way, it could cost Tesla millions to fix the issue and introduce production delays. 

"It's an experiment, certainly," said Jake Fisher from Consumer Reports. Tesla could possibly fix these errors quickly, "or it could be they have unsuspected problems they'll have a hard time dealing with."

Source: Reuters

Tesla will be dropping the Model S 60 and 60 D next month. According to Electrek, Tesla sent out emails to potential buyers last week letting them know that they have until April 16th to place an order for the 60. 

The 60-kWh version of the Model S was an odd model since it was equipped with a 75kWh battery pack that was limited via software to act like a smaller battery. Tesla offered the ability to unlock the full capacity of the battery for only $9.500.

Tesla confirmed this and explained the reason they are dropping the 60 is most buyers tend to go for the battery upgrade and they want to streamline the ordering process.

Source: Electrek

There is no love lost between Tesla Motors and the former director of Autopilot. Bloomberg reports that the Silicon Valley automaker has sued Sterling Anderson over allegations of stealing confidential information about Autopilot and trying to recruit Tesla employees to his new venture.

In the court filing, Tesla says Anderson began work on an autonomous-car venture, Aurora Innovation LLC back in summer when he was head of the Autopilot project. As the director of Autopilot, Anderson would have access to Tesla's semi-autonomous tech. He would leave Tesla in December. Anderson has been collaborating with the former head of Google’s self-driving car project, Chris Urmson.

Tesla is seeking a court order barring Anderson from "any use of Tesla’s proprietary information related to autonomous driving." Tesla is also seeking an order banning Anderson and Aurora Innovation from recruiting Tesla employees and contractors for a year after Anderson’s termination date.

“Tesla’s meritless lawsuit reveals both a startling paranoia and an unhealthy fear of competition. This abuse of the legal system is a malicious attempt to stifle a competitor and destroy personal reputations. Aurora looks forward to disproving these false allegations in court and to building a successful self-driving business,” Aurora Innovation LLC said in a statement yesterday.

Source: Bloomberg

Last May, Joshua Brown was killed in a crash when his Tesla Model S in Autopilot collided with a tractor-trailer. After an investigation that took over half of a year, the National Highway Traffic Safety Administration released their findings today. 

In a report, NHTSA said they didn't find any evidence of defects with the Autopilot system. The agency also stated that they would not ask Tesla to perform a recall on models equipped with Autopilot.

In a statement, Tesla said "the safety of our customers comes first, and we appreciate the thoroughness of NHTSA’s report and its conclusion."

NHTSA's report revealed that neither Autopilot nor Brown applied the brakes to prevent or lessen the impact of the crash. However, NHTSA cleared the Automatic Emergency Braking system as it's “designed to avoid or mitigate rear end collisions” but that “braking for crossing path collisions, such as that present in the Florida fatal crash, are outside the expected performance capabilities of the system.” 

Speaking of Brown, NHTSA's report said that he did not any action with steering or anything else to prevent this. The last recorded action in the vehicle was the cruise control being set to 74 mph. NHTSA notes that in their reconstruction of the crash, Brown had seven seconds to from seeing the tractor trailer to the moment of the impact, giving him possible chance to take some sort of action.

This brings up a very serious concern of how much confidence owners give the Autopilot system. Despite Tesla having statements such as that Autopilot “is an assist feature that requires you to keep your hands on the steering wheel at all times," and that "you need to maintain control and responsibility for your vehicle” while using it," various videos showing Model Ss narrowly avoiding crashes have caused people to think that Autopilot was fully autonomous - which it isn't.

“Although perhaps not as specific as it could be, Tesla has provided information about system limitations in the owner’s manuals, user interface and associated warnings/alerts, as well as a driver monitoring system that is intended to aid the driver in remaining engaged in the driving task at all times. Drivers should read all instructions and warnings provided in owner’s manuals for ADAS (advanced driver assistance systems) technologies and be aware of system limitations,” said NHTSA.

Tesla, to its credit, has been updating Autopilot to make drivers pay attention when using it. These include increasing the warnings for a driver to intervene when needed, and turning off the system if a driver doesn't respond to repeated requests.

Source: National Highway Traffic Safety Administration (Report in PDF), Tesla

Last year, Tesla gave the Los Angeles Police Department two Model S P85Ds to evaluate for possible duty as a police vehicle. It seems the LAPD were impressed that they have decided to equip one of the two models to duty as a patrol vehicle.

NBC affiliate KNBC in Los Angeles reports that the LAPD is working with Tesla on an agreement to equip one of the Model Ss with the equipment needed for patrol duty - radios, computer, custody cage, and locking shotgun rack.

"They will have an active role equipping this vehicle," said Vartan Yegiyan, LAPD's assistant commander of the Administrative Services Bureau - the group that oversees the vehicles of the department.

Once equipped, the Model S will be put to the test with doing patrol work and possibly as a high-speed pursuit vehicle.

No matter how the Model S fares in this test, it is still an expensive proposition for the department. Depending on the configuration, a Model S can upwards over $130,000 - this is before it is fitted with all the equipment needed for a police vehicle. The LAPD believes it could be about five years before they seriously consider replacing their conventional patrol vehicles with electrics.

Source: KNBC
Pic Credit: LAPD HQ on Twitter

It was going to happen sooner or later, but Tesla is taking the state of Michigan to federal court over its ban on direct sales to consumers. According to the suit, Tesla is seeking “to vindicate its rights under the United States Constitution to sell and service its critically-acclaimed, all-electric vehicles at Tesla-owned facilities in the State of Michigan”.

This suit comes after the Michigan's Secretary of State office denied Tesla a dealership license earlier in the month.

“The license was denied because state law explicitly requires a dealer to have a bona fide contract with an auto manufacturer to sell its vehicles. Tesla has told the department it does not have one, and cannot comply with that requirement,” said Michigan Department of State Communications Director Gisgie Dávila Gendreau in an email to The Detroit News at the time.

The law in question was signed back in 2014 by current Governor Rick Snyder which made it illegal for an auto manufacturer to sell vehicles directly to consumers. The law also prohibits a manufacturer from performing service on their vehicles.

“For the last two years, Tesla has pursued legislation in Michigan that is fair to everyone and that would benefit Michigan consumers. Giving auto dealers a monopoly on car sales benefits them, but harms consumers,” said a Tesla spokeswoman to Automotive News in a statement.

The lawsuit names Synder, attorney General Bill Schuette, and Michigan Secretary of State Ruth Johnson as defendants. Tesla has also requested for a jury trial. 

Tesla is seeking a permanent injunction to prevent officials in the state to enforce the relevant part of the law. This would force the state to give Tesla a dealer license.

We'll be watching closely to see if Tesla can make any headway.

Source: Automotive News (Subscription Required), The Detroit News

In news that will likely not shock anyone, Michigan's Secretary of State office has official denied Tesla a dealership license to sell vehicles in the state. The ruling issued last week follows a hearing earlier this month to review Michigan's initial motion to deny Tesla's request for a license, submitted last November.

“The license was denied because state law explicitly requires a dealer to have a bona fide contract with an auto manufacturer to sell its vehicles. Tesla has told the department it does not have one, and cannot comply with that requirement,” said Michigan Department of State Communications Director Gisgie Dávila Gendreau in an email to The Detroit News.

This is due to a state law signed in 2014 which states,  “a vehicle manufacturer shall not … sell any new motor vehicle directly to a retail customer other than through franchised dealers.”

Tesla has been fighting tooth and nail to sell their vehicles in Michigan for a few years now by lobbying and applying for a license.  As Automotive News notes, Michigan is the most populated state that doesn't have a Tesla gallery or store. 

"At the urging of local car dealers and GM, Michigan law was changed two years ago to prevent Michigan consumers from buying cars from a Tesla store within the state. As part of the process of challenging the legality of that law, Tesla applied for a license in Michigan. Tesla will continue to take steps to defend the rights of Michigan consumers," Tesla said in a statement to Automotive News.

Now people outside of Tesla have been trying to change the law. As we reported back in February, a 22-year launched a petition to repeal this law. Also, Rep. Aaron Miller, R-Sturgis introduced a bill into the state's legislature to allow companies like Tesla to do direct sales. But as The Detroit News reports, the bill has sat stagnant.

“The discussion’s not over but for this session I think we’ve reached that point of no progress. I think the clock is going to run out on us,” said Miller.

Now it should be stated that anyone from Michigan who wants to order a Tesla can do so from the company's website. You'll have to pickup your vehicle outside of the state however, the closest ones being in Ohio.

Where does Tesla go next? That is anyone's guess at the moment. But as Tesla's general counsel Todd Maron said back in May, the company would either go to court or the legislation to make the change. Our hunch is Tesla will be going for the former.

Source: Automotive News (Subscription Required), The Detroit News

You ever know someone that was trying to be the center of attention by doing anything that would get them notice? We have to wonder if Tesla is employing this as yesterday they announced a 100 kWh battery option for the Model S and X.

Here are the key details you need to know,

• Model S P100D: 0-60 time of 2.5 seconds in Ludicrous mode, total range of 315 miles
• Model X P100D: 0-60 time of 2.9 seconds in Ludicrous mode, total range of 289 miles

As for pricing, the Model S P100D will set you back $134,500. The Model X P100D starts at $135,500.

If that is a bit too much for you, there is another option. If you have a P90D Ludicrous on order, you can upgrade the battery to the 100 kWh for only $10,000. If you have taken delivery of said vehicle, then be prepared to spend $20,000. Tesla says the increased cost is due to the 90 kWh battery needing to be recycled.

Source: Tesla

Tesla is trying to stay in the spotlight while they continue working on the Model 3 and also enticing people into one of their vehicles. Their solution to both problems is introducing a new two-year lease option.

Electrek reports that Tesla sent out an email announcing the new offer which states the lease deal starts at $593 per month and only is only available for those placing orders til September 12th. 

"A 2-year lease option is one of our most popular requests. We listened and are launching a limited time test of a 2-year lease on Model S and Model X. Starting at only $593/month, our new 2-year lease program was designed just for you to drive electric today, and is available on all Model S and X orders placed by September 12th," Tesla said in their email.

The two-year timeframe is perfect for someone who is on the waiting list for a Model 3, but who wants to drive a Tesla model right now. There is a catch for those hoping to get the $593 per month deal. Electrek ran the numbers and found that you would need to put a $6,000 down payment on the base 60 kWh Model S.

Source: Electrek

Tesla announced their second quarter results yesterday and the news wasn't great. The electric automaker posted a net loss of $293 million for the quarter. It also looks like Tesla might fall short of delivering 80,000 vehicles goal for this year. The quarter saw Tesla move 14,402 vehicles (9,764 Model S and 4,638 Model Xs). Add in the first quarter deliveries of 11,507 vehicles, and Tesla is very short of meeting this goal.

"We are clearly disappointed with our delivery numbers," said Tesla CFO Jason Wheeler.

It should be noted that 'almost half' of Q2's deliveries took place within the last four weeks of the quarter.

"We were in production hell for the first six months of the year. Man, it was hell. And we managed to climb out of hell partway through June and now the production line is humming and our suppliers mostly have their $h! together," said Tesla CEO Elon Musk during a conference call with analysts.

There was some good news for Tesla in the second quarter. The company posted $1.6 billion in revenue for the quarter.

Source: Tesla, Reuters

The National Transportation Safety Board (NTSB) has issued their preliminary report on the fatal crash involving a Tesla Model S in Autopilot mode and a semi-truck back in May.

According to data that was downloaded from the Model S, the vehicle was traveling above the speed limit on the road (74 mph in 65) and that Autopilot was engaged. The speed helps explain how the Model S traveled around 347 feet after making the impact with the trailer - traveling 297 feet before hitting a utility pole, and then going another 50 feet after breaking it.

The report doesn't have any analysis of the accident or a possible cause. NTSB says their investigators are still downloading data from the vehicle and looking at information from the scene of the crash. A final report is expected within the next 12 months.

Car and Driver reached out for comment from both Tesla and Mobileye - the company that provides Tesla the chips that process the images being captured by Autopilot's cameras. Tesla didn't respond, but a blog post announcing the crash said: "neither Autopilot nor the driver noticed the white side of the tractor trailer against a brightly lit sky, so the brake was not applied."

A spokesman for Mobileye told the magazine that their chips aren't designed to flag something like the scenario that played out in the crash.

“The design of our system that we provide to Tesla was not . . . it’s not in the spec to make a decision to tell the vehicle to do anything based on that left turn, that lateral turn across the path. Certainly, that’s a situation where we would hope to be able to get to the point where the vehicle can handle that, but it’s not there yet,” said Dan Galves, a Mobileye spokesperson.

It should be noted that hours before NTSB released their report, Mobileye announced that it would end its relationship with Tesla once their current contract runs out. The Wall Street Journal reports that disagreements between the two on how the technology was deployed and the fatal crash caused the separation.

“I think in a partnership, we need to be there on all aspects of how the technology is being used, and not simply providing technology and not being in control of how it is being used,” said Mobileye Chief Technical Officer Amnon Shashua during a call with analysts.

“It’s very important given this accident…that companies would be very transparent about the limitations” of autonomous driving systems, said Shashua.

“It’s not enough to tell the driver to be alert but to tell the driver why.”

Recently, Mobileye announced a partnership with BMW and Intel in an attempt to get autonomous vehicles on the road by 2021.

Source: NTSB, 2, Car and Driver, Wall Street Journal (Subscription Required)

Tesla's CEO Elon Musk teased last week of a new master plan that would be appearing early this week. But like the launch of one of their new vehicles, there was a bit of delay. Last night, the plan was unveiled. If you were hoping for some exciting announcements, then you'll be disappointed with this plan.

One of the big parts of 'Master Plan, Part Deux' is to "the major forms of terrestrial transport." What this means is the company is working on developing a compact SUV and a and a "new kind of pickup truck." Musk also says early development work has begun on a Telsa-Semi (Musk's name, not ours) and methods of urban transportation.

Musk goes on to talk about developing Tesla's semi-autonomous systems further. A lot of this will rely on utilizing fleet learning (i.e. Autopilot) to help speed up development to a fully autonomous system. The post says the world could be ready to accept autonomous vehicles after they've driven 6 billion collective miles. Using three million miles per day as an estimate, it could take up about 2,000 days (about 5.5 years).

Musk stands behind the Autopilot, saying “deploying partial autonomy now, rather than waiting until some point in the future” because “when used correctly, it is already significantly safer than a person driving by themselves (sic) and it would therefore be morally reprehensible to delay release simply for fear of bad press or some mercantile calculation of legal liability.”

Other bits of this master plan include,

• Setting up a car sharing service allowing owners to make some cash
• Creating solar-panel roofs with "seamlessly integrated battery storage." (Would involve the merger of Tesla and solar panel installer SolarCity)
  

Source: Tesla

The National Highway Transportation Safety Administration (NHTSA) has opened an investigation into a fatal crash dealing with Tesla's Autopilot system.

In a statement given to Reuters, NHTSA said the driver of a 2015 Tesla Model S was killed while the vehicle was in the Autopilot mode. The crash took place on May 7th in Williston, Florida when a tractor-trailer was making a left turn across a divided highway. Tesla in a lengthy blog post said: "neither Autopilot nor the driver noticed the white side of the tractor trailer against a brightly lit sky, so the brake was not applied." The Model S drove underneath the trailer with the bottom making contact with the windshield.

The Verge reports the driver was 40-year old Joshua Brown who filmed various videos of his Model S. One of the videos on his YouTube channel showed his Model avoiding an accident with a bucket truck.

NHTSA's investigation will look the design and performance of the Model S and its various components, including Autopilot. It should be noted this is standard practice for NHTSA to investigate any crash where the vehicle's system could be at fault.

Tesla's blog post says this is first known fatality in over 130 million miles since Autopilot was turned on.

Autopilot has been a source of controversy since Tesla rolled it out last year. Numerous videos of Model S owners filming themselves in dangerous situations and sometimes showing the system not working caused Tesla to make some drastic changes. These included limiting the types of road the system could be turned on and making checks to see if there was someone sitting in the driver's seat. Tesla has said time and time again that Autopilot is a beta feature and that the driver needed to pay attention.

"Autopilot is getting better all the time, but it is not perfect and still requires the driver to remain alert," Tesla said in their post.

"It is important to note that Tesla disables Autopilot by default and requires explicit acknowledgement that the system is new technology and still in a public beta phase before it can be enabled. When drivers activate Autopilot, the acknowledgment box explains, among other things, that Autopilot “is an assist feature that requires you to keep your hands on the steering wheel at all times," and that "you need to maintain control and responsibility for your vehicle” while using it. "

Nevertheless, this crash puts autonomous technologies and Tesla under some intense scrutiny.

Source: Automotive News (Subscription Required), The Detroit News, Reuters, Tesla, The Verge

One of the key benefits of owning a Telsa is having access to the various Supercharger stations around U.S. for free. But if you're one of the 300,000-plus buyers for the Model 3, you'll have to pay to have your vehicle charged at the station.

“Free Supercharging fundamentally has a cost,” said Telsa CEO Elon Musk at the company's annual shareholders meeting yesterday.

"The obvious thing to do is decouple that from the cost of the Model 3. So it will still be very cheap, and far cheaper than gasoline, to drive long-distance with the Model 3, but it will not be free long distance for life unless you purchase that package.”

That package in question would give Model 3 owners the previlage of charging for free at Supercharger stations like owners of the Model S and X. Bloomberg says Musk didn't provide any more details of this package.

A key benefit of the Supercharger station is how fast it can charge up a Tesla vehicle. Within 30 minutes, the station will charge the battery back up to provide a range of 170 miles.

Source: Bloomberg

The latest way Tesla has been trying to get around states that ban direct sales (Michigan for example) is to apply for a dealer license. But this plan appears to not be working.

Automotive News reports that North Carolina's Division of Motor Vehicles has rejected Telsa's application to attain a second dealership license and said the automaker must go through a third-party dealership group. The ruling states that Tesla didn't meet the specific requirements to become exempt from a state law prohibiting manufacturers from owning dealers.

Tesla already has one store in North Carolina in Releigh and was hoping open a new store at their service center in Matthews (suburb of Charlotte).

The DMV order signed by signed by Administrative Hearing Officer Larry Greene, said there are “at least three independent dealers” in the market that would be able to own and operate a Tesla dealership “in a manner consistent with the public interest.”

The news gets slightly worse for Tesla. Earlier this month, The Detroit News got their hands on documents between the state of Michigan and Tesla ranging from 2014 to early 2016 detailing the saga of Tesla trying to sell vehicles in the state. The most recent development saw the Secretary of State’s office requesting Tesla to provide proof that it is a franchised dealer. If not, the state will not rule on the applications.

Secretary of State spokesman Fred Woodhams in an email said this it’s “an explicit requirement in state law.” Tesla doesn't see it that way.

“We don’t harm any franchised dealers by selling directly; we have no relationships with any franchised dealers we would be unfairly competing against. Unlike if General Motors opened up their own store-owned dealership across the street from a franchised dealer that they gave rights to,” said Todd Maron, Tesla's general counsel.

We highly recommend checking out The Detroit News piece to get the full picture of this mess.

It is becoming very clear the only way for this to be settled once and for all is for it to go to the courts.

Source: Automotive News (Subscription Required), The Detroit News

During their first quarter presentation, Tesla announced that it would be accelerating plans to produce 500,000 vehicles from 2020 to 2018. This in part due to the demand for the recently announced Model 3. This is an ambitious goal to say in the least and one that could haunt Tesla if they don't meet. Already, they might have hit a roadblock.

Reuters reports that Tesla hasn't finalized the design of its new Model 3. During a call with analysts last week, CEO Elon Musk said design is still being worked on. Musk also said it would take another six to nine weeks for various engineering decisions to be finalized. No reason was given as to why Tesla hasn't finalized the design yet.

This affects a number of key parts to getting the Model 3 to production such as the design for parts, finding suppliers, and plans for manufacturing.

“We may experience delays in realizing our projected timelines and cost and volume targets for the production, launch, and ramp of our Model 3 vehicle,” the company wrote in an SEC filing.

"Finalizing the design work, and lining up the suppliers and launching in one and a half years seems not possible," said Barclays analyst Brian Johnson.

Source: Reuters, Car & Driver

Despite posting $1.1 billion in revenues for the first quarter ($1.6 billion under non generally accepted accounting principles - GAAP), Tesla reported a net loss of $282 million for the quarter. Compared to the last quarter, Tesla made less in revenue, but the loss was slightly less. Tesla credits this to a careful watching of its spending. Tesla notes that its cash on hand - $1.4 billion - "does not include any meaningful cash flow from Model 3 reservations," but a fair chunk of that reservation money was used to repay back a $430 million credit line.

This isn't the big news as it lines up with what analysts were expecting. It was Tesla's announcement of moving its timeline to produce 500,000 vehicles a year from 2020 to 2018.

“Increasing production fivefold over the next two years will be challenging and will likely require some additional capital, but this is our goal and we will be working hard to achieve it,” Musk said in a letter to shareholders.

This is most likely due to the strong demand for the Model 3 which at the time of this writing has 400,000 reservations.

Tesla also reiterated plans to produce 80 to 90,000 vehicles for 2016. In the first quarter, Tesla built 15,510 vehicles - 12,851 Model S sedans and 2,659 Model X crossovers. The latter model has been having a number of issues from windshield suffering from 'double vision' distortion to the falcon doors not closing. When asked about the quality issues during the call with analysts, Musk said he has a sleeping bag near the production line that he uses “quite frequently.” We're assuming that he is watching the production line to see if there are any issues coming up.

Source: Automotive News (Subscription Required), Autoblog, Tesla

Despite the hoopla and endless praise for Tesla and their vehicles, there are a number of owners who aren't happy with the company. Go on to any Tesla forum and you're bound to fin endless posts from owners of the Model X listing issues from poor paint quality to doors not closing. The Model S is no stranger to problems with batteries failing and the infotainment system freezing.

This is a big issue for Tesla as they have been burning cash for the past two years, with a good amount of this cash coming going to repairs and warranty costs. CEO Elon Musk has promised investors to slow down the burn and curtail costs retaining to repairs. With Tesla announcing their results later today, we'll see if that promise was kept.

But how much is Tesla spending when it comes to repairs? Reuters did some analysis on Tesla's recent annual report by looking at the total vehicles sold and total spending from warranty repairs and accruals - money set aside for future warranty work. Their analysis showed Tesla spent $1,043 per vehicle on repairs and set aside $2,036 per vehicle for future warranty work. The good news is these numbers are 17 and 34 percent lower than 2014. But compared to the likes of General Motors, Ford, and Daimler, Tesla's numbers are quite high.

• General Motors: $400 per vehicle on repairs, $332 for future work
• Ford: $429 per vehicle on repairs, $308 for future work
• Daimler: $970 per vehicle on repairs, $1,294 for future work
  

It should be noted that Tesla only sold 50,000 vehicles last year, while GM, Ford, and Diamler sold millions. Nevertheless, spending just over $150 million of the total $700 million burnt for repair work isn't a good sign.

Telsa in a statement to Reuters said it has reduced the cost of repair claims in the first year along with the amount it reserves for future repairs.

Source: Reuters

Today, Telsa pulled the covers off the updated Model S.

The biggest change for the Model S is the removal of the front grille. It has been replaced with a similar fascia to the Model X and recently announced Model 3 - front panel and LED headlights. Inside, the Model S gets HEPA air-filtration system first introduced on the Model X as an option. This system according to Tesla is said to remove up to "99.97 percent of particulate exhaust pollution and effectively all allergens, bacteria, and other contaminants from cabin air."

Tesla has also swapped the 40-amp onboard charger to a 48-amp one that will reduce recharging times.

All of these updates means the Tesla Model S has a higher pricetag. The Model S now begins at $71,500 for the base 70 kW Model S, an increase of $1,500.

Source: Tesla

Tesla has been fighting tooth and nail to sell their vehicles direct to consumers in the U.S. But six states - Arizona, Connecticut, Michigan, Texas, Utah, and West Virginia - have banned direct sales. Tesla is trying to change this with a combination of new legislation, applying for dealer licenses, and other items. However, Tesla is ready to take this issue to federal court with an interesting legal argument.

The Wall Street Journal reports that Tesla's legal staff has been looking into a 2013 federal appeals court ruling in New Orleans dealing with coffins. What?! The case dealt with the St. Joseph Abbey in Louisiana trying to sell monk-made coffins to help alleviate a shortage due to Hurricane Katrina. But the state had laws that restricted coffin sales to those who were licensed by the Louisiana Board of Funeral Directors. The court sided with the abbey saying they could sell the coffins without having a funeral directors license.

“It is widely accepted that laws that have a protectionist motivation or effect are not proper. Tesla is committed to not being foreclosed from operating in the states it desires to operate in, and all options are on the table,” said Todd Maron, Tesla’s chief counsel.

But could this argument work? Northwestern University law professor John McGinnis says it could. Using this case could shine a spotlight on how laws affect the sale of certain items such as cars.

“Until now, these decisions have been in niche areas of the economy. With Tesla behind it, it would go into something as economically important as the structure of the industry for retailing cars,” said McGinnis.

The timing is what intrigues us the most. Tomorrow night, Tesla will be revealing the Model 3 - their mass-market car. Reservations for this new model will also open.

Source: The Wall Street Journal (Subscription Required)

Tesla has been fighting in various states to allow for direct sales of their vehicles. The most contentious being the state of Michigan which enacted a law in October 2014 banning automakers from selling vehicles directly to consumers. Tesla has been working hard to try and change the law by offering test drives and education to legislators, to no avail. Even the Federal Trade Commission has called on the state to rethink this law. But Michigan is sticking to its guns.

So Tesla decided to do the unexpected, apply for a Michigan dealer license.

The Detroit News reports the California electric vehicle builder submitted applications in November to the Michigan Secretary of State Office for a dealer license. Recently, Tesla sent in follow-up information to the office.

Secretary of State spokesman Fred Woodham tells the News that Tesla is applying for a 'Class A' dealership license, which allows it to sell new and used vehicles. The license requires the dealer to have a “repair facility as part of their business or have an established relationship with a licensed repair facility.”

Woodham went on to explain the office is currently reviewing the paperwork and will have a decision in the next month or so.

It is unclear who submitted the documents to the Secretary of State.

Michigan Information & Research Service Inc., a news service based in Michigan's capital - Lansing - first reported the story. The service said Tesla could contract anyone - aside from itself - to set up a dealer. Tesla could even send a former employee to open a dealer where “in which it mandates the dealership look, act and do business exactly as the Tesla-run stores.”

A Tesla spokesman tells AutoblogGreen, "As recently amended, current Michigan law prohibits Tesla from being able to license its own sales and service operations in the state. Submission of the application is intended to seek the Secretary of State's confirmation of this prohibition. Once confirmed, Tesla will review any options available to the Company to overturn this anti-consumer law."

Along with Tesla's application, a 22-year old graduate of the University of Michigan has launched a petition to repeal the direct sales ban. Mick Yuille has formed a ballot committee called Eliminate (i) to force the Michigan legislature to act. If they don't, his proposal will go on the ballot for the people to decide. Yuille needs 252,000 signatures by June 1st for this happen.

Source: The Detroit News, AutoblogGreen, Crain's Detroit Business

Last year, the State of Michigan signed a bill that banned an automaker from doing direct sales. This meant an automaker like Tesla couldn't sell any of their vehicles in the state. The move was widely applauded by the likes of GM and the Michigan Automobile Dealers Association. Tesla wasn't impressed by this and since then has been working on trying to change this.

But it hasn't been going well. While the company has been trying to educate lawmakers and state officials, it seems everyone in the state doesn't want to bring up the debate.

“There doesn’t seem to be much interest from not only the dealers, but manufacturers like GM that want to continue to shut us out of the market entirely,” said Jim Chen, Tesla’s vice president of regulatory affairs to The Detroit News.

“We’re an American company that is building cars in the United States that is using over 55 Michigan suppliers — that is spending over $120 million in parts and components from Michigan suppliers to build American-made cars. Why shouldn’t we be allowed to sell in Michigan?” Chen went on to say.

Terry Burns, executive vice president of the Michigan Automobile Dealers Association says Tesla is welcomed to the state, but they have to go through dealers.

“They’re an automotive manufacturer, and the Michigan law says that manufacturers need to use dealers in order to sell vehicles. That’s Michigan law. We would welcome Tesla here. But we would think that as with all the other businesses that come into Michigan, they would want to follow the law,” said Burns.

Interestingly enough, the state senate introduced a bill back in April to allow direct sales of three-wheeled “autocycles” to consumers in Michigan. A key automaker who stands to benefit from this is Elio Motors. In response, the Federal Trade Commission (FTC) issued a statement that criticized the move.

"Automobile manufacturers have an economic incentive to respond to consumer preferences by choosing the most effective distribution method for their vehicle brands," FTC officials wrote.

Tesla plans to continue their lobbying efforts in the state.

“We have the majority of next year to lobby, discuss and debate the merits of what we think is a co-existence of our business model in the state of Michigan," said Will Nicholas, Tesla’s government relations manager.

Source: The Detroit News

One thing you cannot call Elon Musk is a shrinking violet. The CEO of Tesla has taken to Twitter once again to defend the company. This time it deals with the results of Consumer Reports' annual reliability survey where the Model S, a vehicle which had earned the coveted Recommended rating, lost it this year due to a number of problems reported by owners. CR says the Model S likely to face a "worse-than-average" overall problem rate.

Musk said in his tweets that problems outlined in CR's survey were because of early production models and that new models have these issues ironed out. Musk goes on to say "Most important, CR says 97% of owners expect their next car to be a Tesla (the acid test)."

Source: Elon Musk Twitter, (2)

With the Tesla Model X coming over the horizon, talk has begun about Tesla's next model, the Model 3. As we have reported previously, the Model 3 will be around the size of a BMW 3-Series, have a total range of 200 miles, and cost somewhere around $35,000. But the Wall Street Journal reports there is more to the Model 3.

JB Straubel, Tesla’s chief technical officer said at conference in Washington D.C. this past week that the Model 3 will not only come in sedan, but a crossover when its launched in 2017 (hopefully). Straubel went onto say that Tesla is hard at work on other models - but didn't go into details about what is in the pipeline.

Source: Wall Street Journal (Subscription Required)

An intrepid Redditor has snapped a photo of Tesla's Model X with its rear falcon wing door open, proof that engineers have cleared a major engineering hurdle.

The poster, likely a contract engineer, shared his photo on the Reddit's r/spotted 'subreddit.' The account was deleted shortly after but the image remains.

This news will allay fears that the Model X's ambitious rear doors would not see production. The 'falcon wing' door system is believed to have contributed to the crossover vehicle's delays, with engineers unsatisfied with the seal between the door and body.

In a later comment, the poster added "The interior is beautiful and the power is comparable to the Model S. Put it to the floor and the the standard 55MPH speed limit is gone before you know it."

The Palo Alto based electric automaker is expected to begin deliveries of its hotly anticipated crossover in September. Over 21,000 pre-orders for the vehicle have been placed.

View attachment: rZJtcAD.jpg

Reddit Link: http://www.reddit.com/r/spotted/comments/39o70v/spent_some_time_behind_the_wheel_of_a_tesla_model/

Sources: Reddit/Teslarati