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U.S.S. Tesla Motors remains on course – with some interesting surprises

At Tesla’s annual shareholders’ meeting CEO Elon Musk covered a great deal of topics important to those following the electric car company, and his answers were reassuring as usual with hints of a few twists to look forward to.

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The year 2014 has been called a year of ‘execution’ for Tesla Motors. Not meaning the company is headed for the guillotine, but that it has a lot of important projects on its plate this year; Tesla must execute their strategy to near perfection to maintain their enormous momentum. Judging by the words of CEO Elon Musk at this Tuesday’s shareholder meeting, all is still going according to plan.

Musk’s presentation began with the expected rundown of updates. Model S has now collectively traveled 344 million miles with no serious permanent injuries – including somebody who “drove it off a cliff.” Tesla hopes to double the current number of Superchargers by the end of 2014 to well over 200 worldwide. Musk also reiterated that the constraint on battery cells is gradually fading, allowing greater volumes of Model S to be produced in the second half of the year.

Tesla to break ground at three Gigafactory sites

As always, the Gigafactory was a point of discussion. Musk remains optimistic about a minimum 30% cost reduction in battery packs, a number he claims Panasonic has finally come around to. The CEO indicated that sometime within the next month Tesla will select and break ground at three sites, not two as had been previously reported. The final site will be selected by the end of this year.

Production Model X to be “better than the show car”

Model X, which has been delayed more than the company would have liked, is on track for volume production in the second quarter of 2015. The reason for the long wait? According to Musk, Tesla believes in making production cars that are superior to their ‘show car’ predecessors, which is quite a refreshing change even if we must wait a few extra months. Musk indicated it is very difficult to produce not just a very good car, but “an amazing car that will blow people away.”

Generation III updates

The Gen III car will no longer be called Model E, because according to Musk Ford threatened to sue over the trademark. However, Tesla is in the process of applying for the trademark of the new name so we may know it soon. The plan is for the car to be released in late 2016 with volume production occurring the following year. It is still expected to cost $35,000 with 200 miles of range, which Musk claimed to be the equivalent of a $28,000 gasoline car ($24,000 in Europe) based on fuel cost savings. Though he has been known for what might be called ‘ambitious math’ in the past, we’ll take his word on this one.

Musk won’t be CEO forever, sharing Superchargers, patent disclosure?

Three other particularly interesting tidbits from the meeting stood out. Speaking on his own future, Musk said he will honor his commitment and plans to stay as CEO at least through volume production of Gen III, 4-5 years from now. After that, he says he will have to make a personal decision. Even if he decides to abdicate the throne, we think the company would be in good shape in the hands of one J.B. Straubel.

The CEO has tried to make it clear over the years that Tesla’s ultimate long-term goal is to advance the prospects of all electric vehicles, including through charging infrastructure that other companies lack. “[Tesla] would be happy to have other manufacturers use the Superchargers, they just have to create electric vehicles that can take the power level of the Superchargers,” said Musk.

The current generation of Superchargers puts out 135 kW with plans for increased power levels, which other electric vehicles couldn’t handle. According to Musk, nobody has approached Tesla wanting to use the network. We think that’s a shame, but it has to happen eventually. In a few years the Supercharger network will be by far the most high-powered and convenient infrastructure for long-range EV travel, and other automakers would be foolish not to take advantage once they have longer-range battery electric cars of their own.

Finally, we will leave you with a bit of a cliffhanger. Expressing his disappointment that other car companies haven’t come out with satisfactory electric car programs, Musk said he is “planning on doing something controversial with respect to Tesla’s patents,” but will wait to write it down so as to articulate it properly. Whatever his plan is, we’d be willing to bet the intent will be to help other automakers make better EVs. Wait and see!

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Andres (not verified)    June 5, 2014 - 8:44AM

Can someone please clarify, did Elon Musk say something about autopilot or self-driving Model X? I think I read in one of the forums that Musk said the vehicle can go from a highway to a ramp and from a ramp to highway in an auto-pilot mode, within a year apparently. Is this true?

Parks McCants    June 5, 2014 - 2:09PM

An intersting read. However, once again Musk's ego comes screaming thriough the bottom$ line. I grow tired of his self reflection in the mirror of EV developement. Looking to the $... I find the projected retail price of the "E" to be an encouraging step in the right dirrection. As to his willingness to share pattented technologies? Crap... Just corporate smke.

Richard Hubert (not verified)    June 5, 2014 - 3:23PM

In reply to by Parks McCants

Yes - but if not Elon taking the lead on EV development, then who? He may have an ego, but Tesla would not exist if he did not, and he has a lot to take credit for in building an entirely new automotive brand in the US, utilizing totally new technology AND with US manufacturing. With Steve gone Elon has taken the reins as the latest and greatest silicon valley superstar, for many very good reasons. People like him need to be encouraged and supported, not shot down by some trying to bring them to some common level of mediocrity already too prevalent in this society.

Parks McCants    June 6, 2014 - 10:07AM

In reply to by Richard Hubert (not verified)

Reel it in a notch Richard. What amazes me is the God-Like superstar status that these corporate raiders gain in U.S. society. Not to take anything away from the man's targeted intent. However, his financial wind-fall thanks to stock speculation should not be discounted when brought into his success equation. It's much like saying Ted Turner or Donald Chump had no seed money at the beginning of thier elustrious carriers. Crap.. I'm all for utilizing money as a tool for the beterment on man kind. If in-fact that is what's happening here. good day sir. And by the way, *Tesla is built with world-supply chain components as is every car built on the planet today.

Richard Hubert (not verified)    June 6, 2014 - 1:35PM

In reply to by Parks McCants

What are you talking about?? I never mentioned one word about $$ - just Elon's success with Tesla. And he is certainly not a "corporate raider" by any stretch of the imagination.

Elon Musk has actually accomplished a great deal - a HUGE amount : (1) he set up, built and sold Pay Pal, (2) he started Tesla from scratch and grew it into the first new US automotive company (with on-going production) in decades, and (3) he started and built SpaceX, which is also a success due to his NASA contracts. Now he is in the middle of setting up new battery plants around the US - something needed to help make EVs more affordable in the future. If these accomplishments don't make him stand out as someone who can be innovative, apply new technology and build new corporations, I don't know what would. He is not God-like in my eyes (no one is), but I highly respect him for being someone who can makes things happen.

And the Tesla Model S production plant is in Fremont, California, which sure makes it look like it is a US manufacture to me. I suggest you go on-line and watch some of their factory videos so you can see what they actually do there.

Richard Hubert (not verified)    June 5, 2014 - 3:15PM

Yes - Tesla is remaining on course, which is a good thing. They have a good business plan and are simply executing it, tweaking it as they go, where necessary.

Having worked for many years for an automotive OEM, I applaud Elon's decision to delay release of Model X until it is right. You only have 1 chance to make a good 1st impression, and I have witnessed too many rushed new product launches that just caused the OEM staff, dealers, and customers much grief as problems and new features were fixed, recalled or tweaked. With Tesla's approach to quality I think the Model X will be a huge hit, further justifying the practicality of EVs in this market for many.

As I have mentioned elsewhere - I give much credit to Tesla for launching their supercharger system, and while it enables greater long distance travel for Tesla owners it is only just that - an enabling process, not a solution - as owners still have to wait a short period for only a 50% charge, good for another ~140 miles or so until they must stop and wait again at the next station. Also, as long as Tesla drivers pretty much stick to the interstates they can travel out from their home city, but a lot more supercharger stations are required to provide more comprehensive geographical coverage. But it will come, and at the present time it is about the best which can be done given current EV technology. At least it shows that Tesla is trying - very hard - to support their new EV technology, and I know that myself and their customers greatly appreciate all these efforts.

I noticed there was no mention above about Tesla's announced battery swap stations, which I can understand because they would be expensive to build and I am not sure how compatible they would be with the Model X, or even Gen III batteries in the future. I still maintain that a much better long term solution will come when EVs (Tesla, and hopefully other EV brands) are powered by commonized, easily swapped battery cells. Once a network of is established (using existing service stations) then they can hold an inventory of re-charged cells which would be easily swapped with a customer's dis-charged batteries, with the customer paying for the electrical difference. Being smaller and lighter theoretically this could be manually done, without requiring the expensive "Nut-runner" automated machinery announced for use in these swap stations. But it does require a re-design of the batteries, how they would be attached on the vehicle, etc..

While I am sure Tesla can work all this out, as they have many other issues, the lack of new competitor EV products does seem delayed, probably in part because of their reluctance to share Tesla charging stations. However - commonized battery cells could really help encourage them, and who better to establish that design than Tesla, especially since they are in the process of setting up their own battery plants. Not to mention that they are obviously in the lead in setting EV design standards already. It also opens up yet another business for them while furthering their EV leadership. It will be exciting to watch how they grow further down the road.

Tonto (not verified)    June 5, 2014 - 5:10PM

Parks McCants, how is Musk's ego screaming?
Did you realize sales of all other EVs are at minimal very constrained. Even though GM (Mr Lutz) admittedly was "inspired" by Tesla, GM, Nissan, Ford, BMW have been making the ugliest and most undesirable cars today, in spite of their millions of dollars in capital.
Then it comes a Mr Nobody like you talking about Elon rethoric? If you want any consideration, list your experience leading advanced auto and innovation. If you are a nobody I'd rather listen to Elon Musk.

Parks McCants    June 6, 2014 - 10:14AM

In reply to by Tonto (not verified)

Hey Tonto, get back on your horse my friend. You don't know me, and... I'm not judging anyone here. I'm simply suggesting that Mr. Musk take the diatribe down a notch. Do you trully believe he needs your emotionally packed backing and support? Laughable. Nice looking car...

Lewis H (not verified)    June 5, 2014 - 10:15PM

Gigafactory has a secret. It's also a renewable power storage facility. Unsold or not yet shipped batteries will be used to store power from the electrical grid as a big buffer for solar power from the deserts. Giga power storage will store a gigawatt.. play on words you see.