Tesla Is Carmaker with Silicon Valley Spark
It takes big car manufacturers four years to develop a new model. In that period of time, Tesla Motors Inc. has created a brand-new kind of car company--not to mention plenty of buzz.
Filling the niche for a green vehicle that isn't virtuously homely, Tesla has buyers standing in line to buy its sleek $98,000 electric sports car, which starts coming off the assembly line in October. The wait list now includes George Clooney, California Governor Arnold Schwarzenegger, and Google Inc. (GOOG ) founders Larry Page and Sergey Brin. They want to be the first in their neighborhoods to own the eerily quiet machine that can rocket from 0 to 60 in four seconds.
But once the short list of environmentally conscious tycoons trades in their Toyota (TM ) Priuses for Tesla Roadsters, will there be enough business for the company to survive? Boutique automakers have a grim history. The last car startup to make it was Walter Chrysler's namesake company in 1925. Many auto industry insiders are impressed with Tesla's technology, but question whether the 250-employee San Carlos (Calif.) company will be able to sell enough cars to thrive in the ultracompetitive global car industry. "These guys look undercapitalized to build cars in real numbers," says James N. Hall, vice-president of AutoPacific Inc., an auto industry consulting firm. "They can sell cars until other, bigger manufacturers start selling vehicles that aren't pure electrics but are green enough."
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