July 29, 2015


Tesla Just Did Something Really Big (Barry Ritholtz, 7/20/15, bLOOMBERG vIEW)

The Tesla P85D with the complete 90kWh "ludicrous" upgrade costs about $100,000. The upgrade gives it a 0 to 60 mph time of 2.8 seconds. To put that into context, to get that sort of acceleration from a car previously required a Porsche 918 Spyder (0 to 60 in 2.3 seconds) or a Bugatti Veyron (2.6 seconds) or a Koenigsegg One (2.5 seconds). They each cost $1.1 million, $2.9 million and $3.8 million, respectively. 

You can save some money by buying a Lamborghini Huracan ($237,250) or the Ferrari 458 Italia ($239,340), but both are slower than the Tesla. That makes the McLaren 570s a relative bargain at $184,900, but it, too, is slower than the Tesla. 

Think about what this does to the high-end segment of the auto market. Tesla founder Elon Musk could put a sexier body on the Model S -- low-slung, fat tires, gull-wing doors -- and steal share from Ferrari, Lamborghini, McLaren, Porsche, Bentley and Bugatti. Or, he can sell entire drivetrains to those companies and let them clad the cars with their own bodies. Or both. Whatever happens, the sports-luxury market just had a huge shot fired across its bow. 

These major shifts take time. To get an idea of how long a paradigm change takes in an entrenched industry like carmakers, consider these few facts about the Toyota Prius. 

It first went on sale in Japan in 1997; it wasn't until 2000 that it was introduced outside of that country. It was the first mass-produced hybrid vehicle in the world. Originally introduced as a compact sedan -- weight and power were always issues -- it has grown along with the underlying technology. Now it is a midsize hatchback, rated by the Environmental Protection Agency and California Air Resources Board as among the cleanest vehicles sold. Of the 7 million hybrids that Toyota has sold since 1997, almost 5 million have been Priuses. (Toyota now sells 27 different hybrid passenger car models but only one plug-in hybrid model -- also a Prius). 

Toyota proved with the Prius that a reasonably priced hybrid electric could be a practical vehicle for the ordinary household. Tesla has taken the baton from Toyota, building a true, pure plug-in only electric car. The ramifications are far-reaching. 

Posted by at July 29, 2015 8:28 PM

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