Tesla’s JB Straubel: Tesla Model ≡ Will Spawn Crossover Variant Alongside Sedan

After the Tesla Model X crossover SUV hits the market later this year to become Tesla Motors’ second mass-produced model and third production vehicle since the company was founded, all attention will turn to the third-generation, affordable Tesla Model .

After the Model X, Tesla has some impressive plans.

After the Model X, Tesla has some impressive plans.

Not expected to hit the market until late 2017 as a 2018 model year car, the Model  will be the first truly affordable Tesla with a promised price tag of around $35,000 and an all-electric range of 200 miles per charge.  Dependent on the success of Tesla’s massive Gigafactory project in Reno Nevada —  a monster lithium-ion battery manufacturing and reprocessing plant which will be capable of achieving the economies of scale necessary to produce the Model  at its headline price point — the Tesla Model  will help the Californian company develop cars that go beyond its current market share and help it achieve a lofty goal of one million Tesla cars on the roads of the world by 2020.

That’s according to JB Straubel, Tesla’s cheif technical officer, who told The Wall Street Journal at a conference yesterday in Washington, D.C. that Tesla would not only develop and sell the aforementioned 2018 Tesla Model  as a long-range electric sedan but that Tesla’s $35,000 electric car would also be developed as a crossover.

During his presentation, Straubel noted multiple times that Tesla is already hard at work to develop models that will follow onto the marketplace after the Model , but didn’t give any specifics about body styles, production schedules or price points.

He did said however, that Tesla should be able to reach a sales target of half a million cars per year by 2020, a figure previously quoted by Tesla CEO Elon Musk at various points in recent years.

To reach that target however — which we’d like to remind readers is just five years away — Tesla has a lot of work ahead.

Straubel: Model <span style=

First, it must bring its Model X SUV to market. As Tesla CEO Elon Musk reiterated last week during Tesla’s Annual Shareholder Meeting, Tesla is on target to begin production of the Model X by Q3 this year, with full-scale deliveries to a large proportion of Model X reservation holders in the U.S. before the start of 2016. But while the Model X is still on target for Q3, we’d like to remind readers that it was first planned to launch in late 2014 as a 2015 model year car.

Then it must complete the building of its Gigafactory in Reno, NV, a project which must be completed by the end of 2016 in order to produce the vast numbers of lithium-ion cells needed for Tesla’s planned production rise at its Fremont facility in Silicon Valley, where the Model S and Model X, (and we presume the Model ) will all be made side-by-side. The gigafactory will also be used to provide Tesla with the battery cells it needs to produce its recently launched Tesla Energy products: the domestic Tesla Power Wall and commercial Tesla Power Pack.

This is all before we even consider the Model , a car which Tesla confirmed in an April proxy filing with the Securities and Exchanges Commission that it had yet to produce a single alpha engineering prototype of.  While it’s likely that any Model  crossover variant will be based on the sedan’s chassis, battery pack and drivetrain, developing and readying two vehicles for market in five years is both resource-intensive and costly.

That fact isn’t lost on Tesla, which secured a $500 million line of credit deal with some of the world’s biggest banks on Friday in order to fund some of the massive capital expenditure it faces in the next five years. In place until 2020, the revolving credit includes an option to expand the total credit facility to $750 million, subject to agreement at a later date.

Like the Model X -- which uses the Model S chassis, the Model <span style=

As The Wall Street Journal notes, Tesla burned through $500 million worth of cash in the first quarter of 2015. Much of this was spent on Tesla’s ongoing research and development, construction costs on its Gigafactory, and the final push to bring the Tesla Model X to market this fall.

But as we correctly predicted, Tesla’s secret weapon in bringing the Model  to market isn’t the Gigafactory but its range of Tesla Energy products. As Tesla CEO Elon Musk described shortly after Tesla revealed its Tesla Energy Products, demand for the domestic and commercial stationary battery packs were “Crazy, off-the-hook,” with Tesla Energy order books selling out for both 2015 and 2016 allocation before a single battery pack had been produced.

And that could help Tesla reach its lofty goals, giving the company — which posted its biggest losses ever during Q1 — the much-needed boost it needs to bring its dream of affordable electric cars for all to reality.


JB Straubel, as the rest of Tesla’s board, is naturally confident that Tesla has what it takes to hit its targets and woo the world to the joys of zero-emission transport. Indeed, during his presentation yesterday, Straubel predicted that lithium-ion batteries will become so inexpensive that electric drivetrains “will become the predominant and primary fuel for light vehicles” in the very near future.

Here at Transport Evolved, we find it hard to disagree with that particular prediction. But with so many challenges facing Tesla in the next five years, we admit that while we think if any automaker can revolutionise transport forever it’s Tesla, based on past experience we’re going to be very surprised if Tesla manages to complete everything on time and on budget.

We — and the rest of the world — wait with bated breath.


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