With rumors that California Governor Arnold Schwarzenegger is trying to return his Tesla Motors Inc. electric roadster swirling, the source of the rumor, Gawker, has started a death watch for the Draper Fisher Jurvetson backed startup. However, Gawker isn't the only blog questioning the future of the automaker, joining the bandwagon is peHUB's Alastair Goldfisher who writes that Tesla and peer Fisker Automotive, which are both developing luxury electric cars, may be heading down the wrong path.
Goldfisher wrote:
"I love electric cars as much as the next vegetarian-journalist, but what we need is an electric car that will serve the needs of the everyman. As my colleague Alexander Haislip says, should investors really go after and invest in an electric car company that only 2% of the population can afford and even fewer want. Even Arnold Schwarzenegger is reportedly looking to return his Tesla car."
Goldfisher concludes his critique by suggesting we should do the math. Sure, the world might be a better place if we all zipped around in quiet, smog-free electric cars, but to say Tesla should offer a $12,000 car for the masses, when the current price of battery technology would make the proposition unprofitable, is just not going to happen.
Odds are DFJ and Fisker's backer Kleiner Perkins Caufield & Byers have done the math and concluded the same -- hence, the decision to produce luxury models as the only way for these companies to gain traction.
The only companies that have the scale -- both in production, development, marketing and sales -- to build electric cars for the masses are the major automakers Toyota Motor Corp., General Motors Corp. (NYSE:GM), Ford Motor Co. (NYSE:F) and their peers. In fact, GM is preparing to release next year its first plug-in hybrid, the Chevrolet Volt, which unlike Tesla's $50,000 Model S sedan, will be sold to the masses. However, if GM falls into bankruptcy, the Volt may never hit the road. Perhaps this is the same conclusion that the Obama administration's auto task force has made as they reportedly prepare to announce support for more loans to GM and Chrysler LLC. - Matthew Wurtzel
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