Even though the Tesla Model S has been in production for just a year, things are looking mighty good for Elon Musk’s electric car company. While Tesla has a long way to go before it taps out the production capacity of the former NUMMI factory in California, executives are already sizing up overseas facilities that could eventually produce mass market EVs in Europe and Asia.
Tesla is on track to sell 21,000 Model S sedans this year, and hopes to double that in 2014. Even so, that’ll still be less than 10% of the NUMMI factory’s 500,000 car-per-year production capacity. Musk obviously has big plans for Tesla, but there are other factors are work too.
In China for example, domestically-made electric vehicles are eligible for substantial tax credits and breaks from the government, while imported vehicles are hit with high tariffs. The same thing is true for Europe, where taxes and tariffs jack the price of the Model S from $70,000 to $96,000 for the 60 kWh variant.
Tesla could shave thousands of dollars off of that price by moving production closer, making the value of its mass market EV all the more appealing. But this is all projecting years into the future; for now the Model S is assembled, but not built in a small facility in the Netherlands, and the NUMMI factory and well within its production capabilities. Ten years from now, I could be writing a much different story.
Source: Bloomberg News