Wednesday, March 19, 2008

Weak dollar speeds Tesla's European plans

Tesla Motors president and CEO, Ze’ev Drori, confirmed that the company this week began regular production of its all-electric sports car, the Tesla Roadster. The 600 cars to be produced in 2008 are already sold. Tesla is currently taking orders for its 2009 model. To date, about 300 cars for the 2009 model have been ordered.

The price of the car – $100,000 – might sound high, but the falling value of the dollar rate effectively makes the car cheaper for Europeans and Asians to buy and more expensive to build, since Tesla buys parts from non-dollar countries and assembles the car in England. The euro has strengthened 18 per cent against the dollar in the past year. It continued to rise 2 per cent last week, following the interest rate cut by U.S. Federal Reserve. Prospects for further falls in the value of the dollar are likely, according to economists.

Tesla now hopes to achieve a better balance between income and cost currencies, by starting to sell the car in Europe.

“We have always wanted to distribute in Europe, but with the low dollar we are going to move quicker,” says Darryl Siry, Vice President of Sales, Marketing and Service at Tesla. “The introduction date for the Roadster in Europe will be announced in a couple of months.”

The U.S. and the European car markets operate under different regulatory frameworks.
In order to sell the car in Europe, Tesla has to cope with a whole new set of emissions and safety standards.

“Emissions regulations we have no problem meeting,” Mr. Siry says with a smile.

Tesla hasn't selected its initial target countries in Europe yet, but Sweden and Norway are considered attractive. While these countries are small, they are early adopters of environmentally-friendly technologies. All-electric cars definitely fall in this category. In addition, Norway and Sweden offer tax incentives to domestic buyers of low-emission cars that effectively will reduce the price of the Tesla model.

The car runs on a lithium ion battery that allows it to go for 220 miles on a single charge. These estimates are derived from climate conditions in California. Lithium-ion batteries might not last as long in a cold climate.

“A big challenge for electric cars in cold countries is to resist the low temperature,” says Niklas Gustavsson, environmental spokesperson for Volvo, which is using the same type of battery in its hybrid prototype vehicle. “We know that the capacity of lithium ion batteries decreases in lower temperature.”


Anonymous said...

I think there are huge differences between the Tesla battery chemistry and that of the Volvo. Tesla uses an older style lithium ion with cobalt that has a relatively short life and needs an extensive battery management system. Hopefully Volvo will use something a little more robust even though it may lack the power density of the Tesla configuration.

Darryl Siry (twitter: @djsiry) said...

While we discussed Norway and other northern countries as attractive markets, I wouldn't go so far as to say we've selected them as the initial markets. When we look at selling in Europe I think we will cast the net much wider.

Brian H said...

And you're hardly going to the table empty-handed; any country facilitating approval and getting first dibs would gain major props. If you don't think that motivates politicians, you haven't been paying attention! ;)

Of course, if the prematurely sclerotic Brussels bureaucracy could be persuaded to expedite things, you'd have the whole EU to play in. But I wouldn't hold my breath.

Anonymous said...

Darryl, Denmark is another good prospect for the Roadster. I work with a couple of Danes and they are excited about the prospect of the roadster in their country. Denmark is also a country that is very environmentally conscious.

Unknown said...

If driving the Tesla on Alpine roads gives as much joy as driving the Lotus Elise please make it available for the European market soon!