Clean Energy Fuels Corp. Message Board

There’s only one slight, teensy-weensie problem. While there were enough high-end customers to supply Tesla around $400 million in gross receipts last quarter (that would be 5,000 cars at an average of $80,000 a copy), they still lost money. How many customers are there for such a pricey car?

Tesla can’t increase demand by dropping the price very much. About the only way they can do this (barring some—currently remote—major battery technology improvements) is by cutting the vehicle’s range. Nissan’s Leaf provides a bit of instruction here. Selling for around $32K (out the door) it sold pitifully few—less than 10,000 last year.

As the May 22 Wall Street Journal showed, when a battery car’s range gets in the Leaf zone (real world: 70 miles; advertised: 83) you can’t even give it away. The federal $7500 with $2500 in several states, and the reduced fuel costs, more than pay for two-year leases on the car. That’s right, free transportation, and sales still suck.

Tesla can’t go much below the EPA estimated 205 mile range (make that about 170 in modestly cold winter weather) of its base version before it hits the same range-anxiety wall.

If Tesla’s sales drop—not by much—the company isn’t going to be able to cover its losses by selling green indulgences. First, the primary losses increase, and then they have fewer indulgences, which are generated by car sales.

So here we have a car pushing $100,000 paid for in no small part by you and me, no matter whether Tesla paid back their federal loan or not. The small comfort is that we are off the hook for any default on that loan, but it would be more comfort if we weren’t all compelled—completely against most of our wills—to shell out around somewhere around $10K (depending on state) for every one that goes out the door. The more they sell, the more we pay.

The only way to stop this craziness is for the company to stop making cars. If demand drops much, or California goes into a major fiscal crisis (they’re working on it), oddly enough, Tesla’s bankruptcy will save the rest of us some money.

Yep, Bought a little more.