Tesla – Boulder, CO

by Jim Harrington

From an early age Elon Musk’s space odyssey made the Tesla Motors impossible electric cars possible. Tesla Motors should not have been born. The last successful American car startup company, Ford, was born over 113 years ago. How could Tesla motors challenge the status quo? Traditional car manufacturers could not sell an all-electric vehicle to people outside what they defined as the ‘green ghetto’ of environmentalists and technology enthusiast.

In 2008 the Tesla Roadster was the first fully electric, world class handling, instant torque, incredible power, sports car. It was sold at $109,000 which was about half the price of the cheapest competitive sports car and had no tailpipe emissions nor maintenance costs for the first 100,000 miles. Car and Driver said. “It is not just a car, but one of the strongest automotive statements on the road.” Wow! In four years only about 2,250 cars were sold. Tesla Motors is named after electrical engineer and physicist Nikola Tesla. The Roadster uses an Alternating Current induction motor descended directly from Serbian-American genius Nikola Tesla’s original design done in 1882.

Each new generation of Tesla cars is increasingly affordable helping the company in its mission to help transition the world to sustainable transport. In 2012 Elon’s Tesla Motors ships the Model S Sedan an all-electric silent eye catching premium sedans at a cost about $57,000. In four years well over 100,000 Model S cars have been sold. It goes 300 miles on a single charge with future upgrades increasing its range to 500 miles. The Model S provides the comfort and utility of a family sedan while maintaining the acceleration of a sports car. It accelerates to 60 miles per hour in 4.2 seconds. It seats seven people. It has two trunks with 64 cubic feet of storage. Its silver door handles are flush with the car body until its driver approaches then they pop out to greet the drivers grip and recede back when the driver and car merges within the seat of sedan luxury for a journey upon the open road. The Model S outclassed most other sedans in speed, mileage, handling, storage space and sex appeal. And unlike other luxury sedans it is also fully electric allowing owners to charge at home or at free recharging stations around the world so they never have to visit a gas station nor spend a cent on gasoline. At one time they were going to do battery swapping stations but found that a network of Supercharger Stations that replenished half a charge in 20 minutes worked well for drivers. Then Tesla added Destination Charging Stations at distinctive restaurant and hotels like the Best Western Plus Boulder Inn. If your IPhone could be a car it would be a Tesla. You, your car and your phone can all recharge while you sleep.

Detroit car manufacturers could not innovate a Model S . Tesla Motors tried to open an office in Detroit. The rents were cheap enough but the regulatory bureaucracy for even office space for a car company was too thick requiring amongst other things years of audited financial statements so Tesla opened shop in Fremont California instead.

The world is flat in Detroit with thousands of outsourced car components coming from all corners of the world. It is an amazing operation putting all those pieces together. Tesla Motors choses to be a closed sphere with as many components built in house as possible to allow each part to work and communicate with each other part to make a new integrated ground transportation device. Tesla’s strategy to disrupt the established automotive industry was called ‘complex coordination’. It developed many innovative pieces that fit together extremely well to create a tremendous new advantage over the more established and entrenched car companies. The Roadster was Tesla’s original disruptive technology to the automobile industry as it provided the sexy value of a high end sports car at a lower cost to the customer and a lower resource cost to the planet.

The Tesla Roadster accelerates at least as well as the best sports car but it is six times as efficient in doing so and produces only one tenth the amount of pollution. The Roadster was a vastly superior car in the small size sports car market. It was much more like a Ferrari than a Prius. It showed what the new auto company could do in its first round without trying to force its way too soon into the crowded economy car market share.

Tesla Motors Inc. is a US car and energy storage technology and company that designs, builds and sells electric cars, electric vehicle power train parts and battery products with a focus on energy innovation. Tesla Motors takes the innovation of computers from Silicon Valley and applies it to the car design and manufacturing process to create a unique driving experience that may well change to world. What Apple computers did for cell phones Tesla Motors is doing for cars. It is all possible because of the rechargeable lithium battery for both smartphones and electric cars. Traditional car companies held to the notion that electric cars will never succeed because battery technology had not improved in a hundred years. This was true for traditional lead acid batteries but it is not true of commodity lithium-ion batteries found in millions of consumer devices. Whereas computer power was increasing following Moore’s law of doubling every 18 months lithium ion batteries were following a slow Moore’s law of doubling every 10 years or getting 7% percent better every year. You could bank on today’s lithium ion batteries to get cheaper and better tomorrow.

Increasing gasoline engine performance comes with a big penalty requiring bigger and bigger engines. To accelerate quickly you need a high horse powered engine that will get poor gas mileage when not driving it that quickly. However doubling the horsepower of an electric vehicle from say 100 hp to 200 hp adds only about 25 pounds and it improves the overall efficiency of the car. It is easy to build an electric car that is both highly efficient and also very fast. Traditional cars have thousands of moving parts and are about 10 to 20 percent efficient at turning an input of gasoline into actual vehicle propulsion. Most of the energy, about 70 percent, is lost as heat to the engine, wind resistance, braking, and other mechanical functions. The Model S has about a dozen moving parts with its battery pack inside the floor sending energy instantly to its watermelon sized motor that turns the wheels. The Model S is by contrast about 60 percent efficient.

Most cars have a large dashboard with various displays and buttons that are also used to protect people from the noise of the engine. With the battery and engine underneath the passengers as part of the chassis the Model S freed up a lot of space in the cab compartment and lowered the cars center of gravity to further increase its outstanding road handling. It feels spacious. A seventeen inch touch screen controls most of the car functions. The car is continuously connected to the internet allowing for streaming of music, navigation help ect. The driver does not need a key or turn a knob to start the ignition. The driver’s weight in the driver seat along with possession of a sensor shaped like the Model S will start the car automatically. The Model S is made of lightweight aluminum which helps it to achieve one of the highest safety ratings in history. And some day it will drive itself.

Elon got started on technology entrepreneurial activities in the 1990’s selling Zip2 and early version of Yelp and Google maps for about 300 million dollars in 1999. He takes his shares and starts up Pay Pal which he sells for about 1.5 billion dollars in 2002. He takes his money from Pay Pal and buys Space X, Tesla and later Solar City and funds their start up activities out of his own money. He is determined to start from scratch in these industries to build in house and rethink much of what is taken for granted in aerospace, automobiles and solar industries. Elon Musk is already rich and he is taking on ultra-risky start up business ventures that can very fast lose someone a fortune. It does.

In the midst of the Great recession Elon Musk is trying to fund a new aerospace company and a new car company. Conventional wisdom is that he should just focus on one company and sell the other one. Elon is not conventional he chooses during the worst recession ever to keep both companies. The burn rate was so bad that The Truth About Cars in May 2008 launched a “Tesla Death Watch”. Mid-June 2008 divorce tumbles Elon into a deep funk. Press did not know the true financial problems Elon faced keeping two companies Space X and Tesla afloat. In October 2008 Elon becomes CEO of Tesla and fires 25 percent of the employees to keep the burn rate from bankrupting the company immediately which he has publically already invested $70 million in. He was a billionaire, now he has literally begged friends and acquaintances for cash to keep out of corporate and personal bankruptcy. He thinks he has found an investor only to have them try to buy the company out from under him.

In despair and out of cash to make the year end payroll Elon comes to Boulder Colorado to visit his brother Kimball Musk who lives here and runs a farm to table restaurant The Kitchen on the west end of the Pearl Street Mall. Kimball is part of the foodie scene in Boulder and his restaurant The Kitchen uses only high end quality fresh ingredients from local vendors making even the simplest of recipes taste amazing. Growing up in South Africa together a meal by Kimball was always a source of solace for Elon. It was a snowy Christmas Eve in Boulder Colorado and we are not sure who or how but a true angel investor appeared to save the Tesla electric car from certain bankruptcy.

Elon was spending the holiday with his brothers family and he totally forgot to get presents, or shower, or sleep really. His company now saved long enough to at least launch the Roadster. Elon now runs down the Pearl Street mall looking and asking for any open stores to buy presents. In some ways it is like a scene out of the movie “It’s a Wonderful Life”. He does find one but not before one couple he asks comment “Only in Boulder will its street people be billionaires launching companies to save the planet.”

By end of 2008 A late round investor added another $40 million to keep the company out of bankruptcy. By January 2009 Tesla has raised $187 million and delivered 147 cars. More investment dollars and cars were to come to give a longer burn rate for Tesla to succeed.  Elon was not doing these companies to accumulate more personal wealth but rather to gather the tools needed to make humanity a multi planetary inhabiting species.  Elon has long had a plan to make it. To get to other worlds you need to solve energy problems. Tesla Motors is solving energy problems and it is sharing its patents so other companies can join in solving energy problems as well. Elon’s Space X is creating another kind of transport device that can take people to Mars. The odds of colonizing Mars are long but Elon is willing to risk it all, from billionaire to beggar, to make it a reality.

Closer to Earth Apple did not just revolutionize the smartphone it also revolutionized the shopping experience for the IPhone. So did Tesla, you don’t go to a dealership and haggle about price with a pushy salesman. Tesla is sold directly through its own stores and website. Tesla stores are modeled after Apple stores and are often located near them in high end malls or affluent suburbs. Elon placed a showcase store just a couple blocks away from The Kitchen, his brother’s Kimball’s restaurant west of the Pearl Street mall in Boulder CO. Once ordered your Tesla car is delivered to you in concierge style with red velvet ropes leading you to your vehicle and the Tesla team stays in contact with its buyers/members to learn more about what they are experiencing.

While owners sleep at night Tesla engineers tap into the car via the internet to fix problems or add software upgrades. It is like elves coming in the night to add new transportation delights. Since 2014 these delights have included more and more auto pilot features.

Tesla had transformed the car into a truly mobile gadget device that got better after you bought it. It is no longer just a car it is a computer on wheels. As planned the early adopters to the car were Silicon Valley millionaires whose early cash allowed the company to expand to additional market demographics. Traditional car companies thought the car was a gimmick that would fade away. They considered the car to be too elitist and expensive for the masses. By the end of 2012 the Model S was named Motor Trends Car of The Year in its first ever unanimous vote. The Model S is “proof positive that America can still make great things”. It is the first non-internal combustion engine car to win this top award because it handles like a sports car, drives as smoothly as a Rolls Royce, holds as much as a Chevy Equinox and is more efficient than a Toyota Prius. Consumer Reports said ‘it was likely the best car ever made’ and gave the Model S its highest score ever, a 99 out of 100 car rating. The Model S is not just the best electric car it is likely the best car ever made.

Model S owners have driven over one billion miles all on electricity. It is the first plug in vehicle to reach this billion mile milestone. Elon Musk has a plan for Tesla Motors to be an independent car maker selling fully electric cars at prices affordable to the average consumer.

Tesla plans to have “SEXY” models to sell consumers at more and more affordable price points. Musk wanted the first three models to spell SEX but another car company, Ford, owns the trademark to Model E so the digit 3 will be stylized to look like an E. The Model Y was added to be an even more affordable all electric car making the Tesla Models ‘S3XY’ a SEXY showcase for all to enjoy. In late 2017 the Model 3 is planned to be released with a price point of $35,000 before any government incentives. To commercialize electric vehicles Tesla started first with a premium sports car to prove it could be done and get the cash infusion from early technology adopters and then move as rapidly as possible into building vehicles for direct sales and support into the mass market.

At the Best Western Plus Boulder Inn we are proud to be able to offer you a Tesla destination recharge station. You can recharge your Tesla, your IPhone and most importantly yourself so you are ready to face the adventure of a brand new day. Today it is the open western road tomorrow it may be a journey to Mars. Whatever your ultimate destination plans are Boulder Inn is glad to be a part of your hospitality team.