Tesla Motors To Launch U.S. Leasing, Supercharger Improvements | Edmunds

Tesla Motors To Launch U.S. Leasing, Supercharger Improvements

Just the Facts:
  • Tesla Motors said it plans to offer a U.S. lease program for its Model S sedan, as well as make improvements in its Supercharger technology this year.
  • Leasing is expected to play a small role this year in the U.S., said Tesla CEO Elon Musk, but "it will be a big factor next year."
  • Tesla said it expects to realize its first profit in the first quarter of 2013, after posting a net loss of $90 million in the fourth quarter.

PALO ALTO, California — Tesla Motors, the U.S. electric automaker, plans to launch a lease program in the U.S. this year and slash the time buyers wait for their car to be built and delivered. It also said an announcement about improvements in its Supercharger technology is on tap for later this year.

In addition, the company said this year it expects to reduce its costs, begin sales in Europe and Asia, and produce 20,000 vehicles at its factory in Fremont, California. The company produces the Model S, a sleek, full-sized four-door sedan that runs on battery power.

"Our focus in Q1 is on production efficiency, improving gross margins and making sure customers are really happy when they receive their car," Elon Musk, Tesla CEO, told analysts in a conference call Wednesday as it released fourth quarter and year-end 2012 financial results.

Tesla is looking for methods to cut costs, specifically, streamlining the assembly process, chopping supplier and delivery costs, receiving components in a more timely process, and reducing the number of hours assemblers work each week. Each averaged 68 hours per week during December, which costs nearly as much as two 40-hour shifts, Musk said. The company is aiming to reduce each worker's shift in March to approximately 45 hours each week.

It all adds up to higher costs and delays, he said, with most buyers waiting months to receive their car.

"Our intention is not to have people wait six months for a car," Musk said. "We much prefer that demand and production are closely synced. Ideally you want to get a car in maybe a few weeks. It is not our intent to have a long waiting list. That is pretty inconvenient for people."

The Model S ranges from $59,900 to $79,900 depending on battery pack. More expensive batteries have a longer travel range. Model S production began early last year.

The dispute between Tesla and The New York Times came up during the call.

Musk last week tweeted that a review of the Model S and the company's East Coast Supercharger system in the newspaper was a "fake." Times Public Editor Margaret Sullivan on Monday said reporter John Broder took "casual and imprecise notes" of his test drive. She added that vehicle data logs posted on Tesla's Web site were "sometimes quite misleading."

Musk countered that the Times "reversed its opinion" of the Model S.

During the call, Musk said Tesla is planning to add more battery charging stations and improve the technology of its Supercharger system this year. He also said the navigation system in the Model S will route the driver to the Supercharger stations in the future.

In reference to criticism about the negative impact cold weather has on the car's batteries, as suggested by the Times review, Musk said the Model S "does lose about 10 percent of its range in winters that are very cold, but so do gasoline cars. People forget about that."

In the meantime, Tesla is working with several financial companies to create a lease program.

"That is something we do want to offer maybe in the second half of the year," Musk said. "But we want to make sure that the terms of the lease are compelling."

Edmunds says: A lease program is a key part of the plan for Tesla here, as it inches closer to becoming a mainstream automaker.

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