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Thursday, May 09, 2013

Tesla Number One Seller of Electric Cars

One of the avenues we can follow to avoid climate catastrophe is to eliminate the Internal Combustion Engine (ICE). And, the best way to eliminate it is to make it uneconomic to choose an ICE over a clean alternative, such as an electric motor. While some prefer that the government tax or penalize ICEs, much the preferable way forward is to make an alternative choice much cheaper and therefore, let the great deal sell itself. In that way, anyone wishing to upgrade their current ICE-driven car, for example, will find the decision much easier based upon price alone. Saving money has never gone out of style.

Tesla Motors is proving that building a better electric car can be profitable. According to their latest quarterly results, they are now the number one seller of electric cars:

For the quarter, Tesla was the top seller of rechargeable cars in North America, surging past Nissan Motor Co.'s 3,695 deliveries of the Leaf and General Motors Co.'s 4,421 sales of the Volt plug-in hybrid.

That's notable considering that Tesla vehicles command premium prices. The Model S starts at about $62,000 and can top $100,000, depending on trim level and options. The car is stylish and fast, boasting a zero-to-60 mph acceleration of less than six seconds.

Wealthy, eco-conscious buyers are snapping up the company's sedans as fast as the company can build them. The company sold 2,650 vehicles in 2012.

Tesla's earnings were enhanced by sales of environmental credits to other automakers; these credits are awarded to clean vehicle makers as part of California's efforts to reduce air pollution. Sales of the Zero Emission Vehicle credits generated $68 million in revenue for Tesla in the quarter.

If the company does sell 21,000 cars this year, it's still a small volume for a car company. But Thilo Koslowski, an analyst at Gartner Inc., said Tesla looks like a company that has "gone through puberty and is now entering adulthood."

"They seem to be executing their plans and making the right moves," he said. "They're maturing in terms of sales, but also in terms of a brand.""

In a conference call, founder and Chief Executive Elon Musk talked about the car's global appeal.

"In the U.S. you may save $200 to $300 a month in gasoline in relative to electricity costs if it's a daily driver," Musk said. "In Europe, obviously that number can be doubled. It could be — maybe $500 a month."

Tesla Motors, founded in 2003, started selling its Roadster convertible sports car in 2008. Production for the Roadster ended in 2011, and North America sales ended last year, just as the company was rolling out the Model S.

In March, Tesla announced that it had again pushed back the release of its next vehicle, the Model X crossover SUV, by a full year to late 2014. A company spokesperson said at the time that Tesla had decided to focus instead on the Model S.

Tesla is now producing about 400 cars a week at its factory in Fremont, Calif.

Tesla hasn't made the alternative cheaper yet. But, the first step on a long journey has been made—profitability. Now, with progress ahead likely to bring the price down radically, the days of ICE are numbered.