Tesla Motors, Inc. - First Quarter 2012 Shareholder Letter
- Model S deliveries to start ahead of schedule in June
- Model S reservations top 10,000
- Daimler Mercedes powertrain agreement signed
- Toyota RAV4 powertrain shipments begin ahead of schedule
- Solid Roadster demand & gross margin
May 9, 2012
Dear Fellow Shareholders,
We are pleased to report that we have nearly completed all regulatory approvals and certifications required to begin delivery of Model S to our customers in the United States. Thus, we anticipate that initial deliveries will begin in June, ahead of our announced schedule of July.
On the Powertrain side of our business, we completed the Toyota RAV4 EV development program in Q1 and started deliveries of production components, also ahead of schedule. The RAV4 EV marries the efficiency of an EV with the versatility of an SUV - in fact it is the only electric SUV on the market. With the largest battery pack of any non-premium EV, it is expected to have a city range of almost 170 miles, more than 60% above the Nissan Leaf. The electric RAV4 is a high performance version of the RAV4 with outstanding acceleration and excellent handling due to the low center of gravity afforded by the floor mounted battery pack.
We recently signed an agreement with Daimler to create an entire electric powertrain for a new Mercedes-Benz EV, thus formalizing the joint effort kicked off in Q4 last year. This program is expected to exceed in value the sum of all powertrain agreements signed in Tesla history. Producing at this expected volume will allow for economies of scale that give the resulting vehicle a cost of ownership that is on par with its gasoline equivalent.
Model S Deliveries to Begin in June
All aspects of the Model S program remain on track to commence deliveries in June. The Tesla Factory is
producing vehicles at a steadily increasing rate, and so far this year we have built about 50 Beta and about 30 Release Candidate prototypes. All these vehicles are dedicated to a comprehensive testing program, including crash and safety testing, systems integration, reliability testing, and quality audits.
Model S has now been fully certified by the U.S. Environmental Protection Agency (EPA) and the State of California. We have also successfully completed almost all of the crash testing required under the National Traffic and Motor Vehicle Safety Act using our Release Candidate prototypes. Once we
complete and document the tests, we will be able to sell our vehicles in the United States. This leaves us confident we can begin Model S customer deliveries in June, ahead of our announced schedule of July.
We expect the safety rating of Model S will be independently determined by the National Highway Traffic Safety Administration (NHTSA) and other groups. Under NHTSA’s New Car Assessment Program Robotic Installation of Panoramic Roof(NCAP), selected cars are independently purchased and crash tested. NHTSA then assigns “star ratings” to tested cars using the NCAP standards. Based on our internal crash tests and consistent with these published standards, we believe Model S will achieve NHTSA’s top, 5-star, rating. Compliance testing for global markets continues and will be announced as achieved.
Delivering the first few customer cars in June highlights the fact that Model S will be fully compliant and available for purchase in the U.S. These cars will carry customer, rather than manufacturer, license plates, signifying that they are fully homologated and completely street legal. We plan to continue making customer deliveries on a slow, methodical ramp, and remain confident in our target of 5,000 vehicle deliveries by year end.