Tesla Revived The Electric Car, But Can It Sell It?

Tesla workers cheer on the first Tesla Model S cars sold during a rally at the Tesla factory in Fremont, Calif., in June. i i

Tesla workers cheer on the first Tesla Model S cars sold during a rally at the Tesla factory in Fremont, Calif., in June. Paul Sakuma/AP hide caption

itoggle caption Paul Sakuma/AP
Tesla workers cheer on the first Tesla Model S cars sold during a rally at the Tesla factory in Fremont, Calif., in June.

Tesla workers cheer on the first Tesla Model S cars sold during a rally at the Tesla factory in Fremont, Calif., in June.

Paul Sakuma/AP

The American auto industry has a new darling, but it doesn't come from the Big Three or even Motor City. Instead, it comes from the West Coast — Silicon Valley, to be precise.

Tesla Motors — the company formed by tech billionaire Elon Musk — has a new car, the Model S, and it's been named Automobile of the Year by Automobile Magazine and Car of the Year by Motor Trend.

Car geeks are typically a tough crowd to please, and with much of the electric car movement up to this point, the geeks have been kind of lukewarm.

"They're OK, they're nice, and they work and they do what they're supposed to do," says Joe DeMatio, deputy editor at Automobile Magazine. "But they don't really speak to the emotions of a car enthusiast."

DeMatio says the Model S is the first electric car that finally got the words right. He says they thought they would like it and that it would be an interesting technical exercise, but then they drove it.

"We were blown away by the performance and the power and the poise [and] the handling," he says.

For much of the electric car movement, there has been a kind of "eat your spinach" factor, but the Model S changes all that.

"By having the electric vehicle technology in a performance car, it makes people think about electric vehicles in a whole different way," says Roland Hwang with the Natural Resources Defense Council. "Instead of thinking of them ... as some sort of sacrifice, what customers can now start to see is that electric vehicles have tremendous potential."

Potential, however, doesn't always equal car sales.

Michelle Krebs with the automotive website Edmunds.com says success in the auto industry for Tesla, or any car company, isn't just about one good car, it takes a string of them. That, of course, takes money — a lot of it.

"Well it's billions; so there's constant investment," Krebs says. "You can't just get a check, make a car and expect that that's going to carry the day. You've got to still keep investing for the future."

Now that Tesla has made a car that auto enthusiasts love, DeMatio says the real challenge is to see if the non-car geeks of the world will buy one.

"The ultimate success is sometimes built on other successes that people have had," he says. "So even if Tesla doesn't survive long-term, they've achieved something, they've proven that something can be done, and someone else could pick up that mantle."

DeMatio says while Tesla hasn't proven that it can sell cars, what it has proven is that it won't be the last electric car company.

The new Tesla Model S starts at $50,000 — after a $7,500 tax credit.

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