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Tuesday, June 26, 2012

Tesla prepares for Model S launch, an all-electric sedan build from ... -

Many in the traditional auto industry doubted that Tesla Motors could build an all-electric sedan from scratch in Silicon Valley. But this week the skeptics will witness the tech industry's most disruptive product launch of the year.

Tesla is counting down the hours to Friday, when CEO Elon Musk will hand over the keys to a small group of customers who placed early reservations for the Model S sedan. It's a watershed moment for the Palo Alto, Calif.-based company, manufacturing in California and the nascent electric vehicle industry, which has been struggling to live up to ambitious expectations.

"This is a tech product," said Theo O'Neill, an analyst at Wunderlich Securities who has been bullish on Tesla because the company is delivering the Model S ahead of schedule, something unheard of in the electric vehicle industry. "And it is bad news for the naysayers in Detroit who can't find their way out of a paper bag."

Tesla is building the Model S at the former NUMMI plant in Fremont, Calif., the site of a former Toyota-GM venture that it bought in 2010 and transformed.

Invited for a rare visit to the plant, the first thing a reporter and photographer from this newspaper noticed were the vast parking lots. Empty when NUMMI shut down, they are now filled with cars and have dedicated spots for electric vehicle charging.

Fresh orchids in a large vase greet visitors in the sleek lobby, where Teslabranded T-shirts and jackets are for sale. Much of the cavernous facility has been painted a gleaming white, giving it a bright, clean and futuristic feel. The office space looks like a social media startup: an open floor plan filled with employees on computers, with no cubicles or private offices. On the factory floor itself, workers zip around on red bicycles or in electric golf carts because it takes too long to walk.

"People used to think we were a joke," said Gilbert Passin, Tesla's vice president of manufacturing, as he stood on "the bridge," a second-floor walkway overlooking the assembly line. "But there's no way you can come into this factory and not know we are completely serious. You cannot do this in your garage."

The first 1,200 Model S vehicles delivered in North America will be from the limited-edition "Signature" series, which comes with an 85-kWh battery that Tesla said is capable of 300 miles per charge.

Two Model S Signatures have already been delivered. Musk has his, which is black, and venture capitalist Steve Jurvetson, who sits on Tesla's board of directors, has a red one with the license plate TSLA S1. A short video of Jurvetson climbing into the car before a sea of elated Tesla employees, all snapping photos with their iPhones, has been widely viewed on YouTube.

"It's stunningly beautiful, gorgeously engineered, represents the future," Jurvetson said in the video. "Sometime in the next year, all of my cars will be electric. I will never buy gasoline again in my life, and I'm looking forward to that."

Tesla now has about 1,700 employees worldwide, including 800 at the Fremont factory. But for the Model S launch, many others have gathered in Fremont, including members of the Los Angeles-based design team and suppliers from Japan and elsewhere.

Currently, Tesla is making just one Model S a day as it focuses on quality control and gives meticulous attention to everything from the sound pouring out of the stereo system speakers to the gloss of the paint. Production volume is scheduled to slowly ramp up in coming months, and is expected to hit 80 to 100 cars a day by the end of the year. Tesla plans to make 5,000 cars by the end of 2012 and 20,000 in 2013, a low volume that will allow it to continually improve the manufacturing process.

More than 10,000 customers have put down deposits to reserve the Model S, which is being marketed through highend retail showrooms and a nationwide "Get Amped" Model S Tour, in which reservation holders will be invited to take test drives. The Get Amped tour begins Saturday in Fremont, then goes on to Los Angeles, Seattle and elsewhere.

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