Tesla: Factory on track for 2012 Model S launch

At Tesla Motors Inc.'s first annual shareholders meeting since going public last July, Tesla CEO Elon Musk provided a vision of using the full capacity of the former New United Motor Manufacturing Inc. plant it acquired from Toyota.

He also discussed a string of electric vehicles and the possibility of a chain of company-owned charging stations and battery-swap facilities.

At the hour-long meeting on Wednesday in San Jose, Calif., Musk detailed Tesla's progress with the former NUMMI plant. The latest milestone: completing an eight-month installation of a $50 million Schuler SMG hydraulic stamping press that Tesla acquired from "a company in Detroit" for $6 million, including the cost of shipping the tooling with 70 trucks. Musk called it "the largest hydraulic stamping press in North America."

Musk described the former NUMMI plant, which was valued at $1 billion before Tesla acquired it for $42 million, as "an alien dreadnought." He said Tesla plans to use the plant's 500,000-unit annual capacity in the long term.

Nearer term, Tesla plans to start building production prototypes of the Model S sedan in the third quarter. The Model S is to have zero-to-60 mph acceleration in six seconds and a range of up to 300 miles. The car is still on target for a mid-2012 retail launch.

4,600 Model S reservations

Producing the Model S will require a $500 million investment. Its platform-sharing Model X crossover, scheduled to go on sale at the end of 2013, will require just $150 million because of substantial parts commonality.

The company has 4,600 reservations for the Model S, which will satisfy the first year of production. The Model S and Model X eventually are expected to sell about 20,000 units a year, with a price starting around $50,000.

Longer term, Musk said a Tesla-built, second-generation Roadster could arrive in three years. The current Roadster is going out of production because Lotus' assembly line--which makes gliders, or partly assembled vehicles, for Tesla--is undergoing a major renovation and will be unable to continue building for Tesla, he said.

Musk said he expects a production launch of a so-called Gen III vehicle, to sell for about $30,000, in the next four to five years.

Regarding charging stations, Musk said that Tesla vehicles' extended range means that the company could cover cross-country drives with 13 charging stations. He said eight to 10 stations on each seaboard could cover the U.S. coasts. At an expected investment of about $25,000 per station, "for a couple million dollars you have covered the country," Musk said.

Secondary offering

Musk also gave assurance that he will remain a committed investor in the company. With Tesla's secondary public offering, Musk expects to own more shares than he sold after the initial public offering.

"I am in the same boat as many investors," Musk said, joking, "I had to sell during the IPO because I didn't have any money."

Musk, the co-founder of PayPal, has invested tens of millions of his own money in Tesla, as well as in his fledgling rocket company, Space Exploration Technologies Corp., or SpaceX.

Musk also is reassured that among Tesla's key alliance partners, neither Daimler, Toyota nor Panasonic has sold a share of Tesla stock. Daimler has committed to invest in the secondary offering, Musk said.

Tesla's share price rose to the $34 range in December from an IPO price of $15 in July, before dipping to $22 earlier this year. It currently trades at about $30.

By Mark Rechtin- Automotive News