By David MacDonald S illy ironies have always made me laugh hard. Do you remember the Jacuzzi Lifeguard sketch on Saturday Night Live back in 1996? A young Will Ferrell played a hotel guest who wanted nothing more than an innocent soak in the hot tub. What he got was to be lambasted from a tub-side tower by an overly intense lifeguard played by Jim Carrey. That was belly laugh material. In early July, Tesla Inc. released their complete first-half sales numbers on cars and SUVs and they didn’t come close to approaching the high-side of their projections. They were closer to the 47,000 mark than the 50,000 goal and the reason made me laugh just loud enough that my wife had to ask me what was so funny. Production was brought to a crawl by a battery shortage. It’s apparently all over now, though. One of the world’s leaders in energy-storage devices is once again firing on all electrically-charged cylinders. The 100 kWh battery pack shortage is now a thing of the second quarter and Elon Musk and the Tesla team are banking on third quarter production of the new Model 3 to set things right at the Fremont, California factory in an automotive market that slumped 3 percent in June. But let it be said that Musk’s optimism always seems to find a way to shine through the fog. The man’s had SpaceX rockets blow up on live TV with cameras trained on his face and he still manages to appear stoic – if not hopeful – and ultimately triumphs by learning from failure. Now for the chuckle-level irony stuff:
That’s not at all meant to suggest that the Model S sedans or the Model X sport utility vehicles never made it off the launch pad. In the first and second quarters of 2017, Tesla moved 12,000 of the former and 10,000 of the latter – and that wasn’t at the average new-car transaction price set by Kelly Blue Book that the Model 3 hovers slightly above. The USD $35,000 price tag for the new family-friendly sedan is well below the USD $132,000 starting price for the Signature version of the Model X and according to Musk, it’s what he had in mind all along. Musk told reporters in late June that it was always the plan to build-up the Tesla brand – which has been incorporat- ed since 2003 – by selling up-market sports cars with the hope that one day his niche brand wouldn’t be so niche. France has set in motion a proposal to ban the sale of gas and diesel cars by 2040; India has pledged to adopt an electric cars only policy by 2030 – and Germany has vowed that in the same year, all EU roads within its borders will be forever free of gasoline-or- diesel-powered vehicles. As of spring 2016, Tesla already had on the books 373,000 USD $1,000 deposits for the Model 3. These reservation figures will be met with a beer-pour response. 100 Model 3s will be rolled out in August, 15,000 or more in Septem- ber, and finally a 20,000 monthly figure moving forward from December into 2018. Source: Bloomberg That day is now.
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SPOTLIGHT ON BUSINESS MAGAZINE • JULY 2017
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