Tesla Motors Inc., the Palo Alto, Calif., automaker responsible for the world’s first fully electric sports car, unveiled its first electric SUV, the Model X, on Feb. 9. Not even a week later, hundreds of them—worth a combined US$40 million—had already been reserved. And preliminary orders of Tesla’s Model S sedan—slated to go on sale this summer for a base price of US$57,400—have jumped 30 per cent since the unveiling of the Model X.
The interest is a reassuring sign for a company that last week announced losses of US$222 million in the fourth quarter of 2011. That’s nearly double what they were a year earlier. Tesla’s revenues have been consistently on the rise, but they’re being outstripped by spending on developing new vehicles and getting them ready for market. Scheduled to hit production lines by the end of 2013, the Model X SUV—starting at around US$60,000—can seat seven and features “falcon wing” rear doors that open vertically (think Back to the Future DeLorean). The high performance version can also go from 0 to 60 mph in 4.4 seconds, says the company. That’s faster acceleration than a Porsche 911.
Still, the money-losing Tesla has yet to prove it’s a sustainable operation. It has only managed to physically deliver about 2,000 cars, and is also repaying a US$465-million loan granted by the American government in June 2009. “Things aren’t rosy for them necessarily,” says Alan Baum, a veteran car industry analyst based in West Bloomfield, Mich. “But they are certainly better positioned than many of their [electric car start-up] competitors.” Tesla has been able to boost cash flow by selling lithium ion batteries and powertrain components—motor, gearbox and related software—to car-makers like Mercedes and Toyota. If Tesla can maintain this formula and successfully sell the thousands of cars it plans to produce over the next two years, it may be able to turn a profit—and prove that there is a place for ultra-fast electric SUVs.