Tesla Model X – Another Expensive Electric Car

Just Google “Tesla Model X” and you will find all sorts of frothy reviews, with plenty of mentions of how fast the car accelerates. But by now I think we understand that an electric car will go from 0 to 60 faster than even a high prices sports car with a normal combustion engine.

What would really make an electric car sexy these days would be an affordable price tag. The Model X will start at $49,900 when it comes out in 2014. This isn’t really Tesla’s fault. It’s a small startup that isn’t making money yet and its cars have been getting less expensive with each new model. What we really need is for one of the major car companies to step up and increase the size of the market, just as Toyota did for hybrid cars when it sold the early versions of the Prius at a loss to gain market acceptance. None of the leading car companies seem willing to do that for the electric car.

When I interviewed Martin Eberhard, the co-founder and former CEO of Tesla Motors, back in 2007 he predicted that some major auto companies would fail because of the technological disruption that electric cars meant. It seemed pretty farfetched at the time, but if it weren’t for the government bailout he might have been proven a visionary.

Nobody went bankrupt and maybe that’s the problem. The auto companies are doing well selling only a few thousand electric cars a year, so there is really no reason  for them to completely transform their own marketplace. While Toyota was willing to take on losses on the first hybrid vehicles, it didn’t really change anything substantial – ie, how the cars were fueled. It was just a better car that allowed Toyota to gain market share. The marketplace remained essentially unchanged.

GM was seemingly making a mass market car when it announced it was selling the Volt under the Chevy brand. But it’s price tage of $39,145 before government incentives, puts it in the Cadillac price range. One player that could shake up the marketplace is Byd, the Chinese electric car company. It has long been rumored to be entering the US market. But that has yet to happen.

Maybe Martin Eberhard will still be proved right. When really high gas prices come our way (either due to increased demand or a supply disruption) maybe Tesla or some other startup will be ready to offer an electric car that will be affordable to mainstream America. Hopefully we won’t bail out the slow movers for a second time. Once is enough.


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