Tesla, meet thy end

Full disclosure:  I think the idea of electric, hybrid, diesel, etc. cars are great.  Any new powertrains that make cars more versatile and less harmful to our environment I am all for.

If I had to put my money on it, I would bet that Tesla won't be around, as an independent company for much longer.  If I had some extra money laying around, I would be willing to take even longer odds that it won't be around as a brand much longer either.  Why?  Here are a few reasons:

1. Nissan Leaf
2. Chevy Volt
3. Audi Etron
4. Mercedes Benz SLS Electric
5. several Porsches

Each of these cars highlight key areas where Tesla has serious issues to address.

Manufacturing

Tesla has not ever built and designed any vehicle entirely in house.  I'm not saying that all other car manufacturers have, everyone uses components built by suppliers or designs from outside the company, but the Tesla roadster is built upon what is essentially a Lotus frame, one that is very thinly disguised at that.  Tesla states they want to bring the design and production of the Model S sedan in house, which makes tons of sense, but wanting and doing are quite a ways apart (just ask the dozens of would be cottage carmakers in the UK).  Tesla has also said they plan to use the former NUMMI plant in Fremont to build their cars.  The same plant that was union before it was shut down.  Tesla will have a lot to learn from dealing with the union, including negotiating and signing a labor contract from scratch.  Add in that the costly development of the Model S isn't even completed yet and you have a steep hill to climb.

Marketing

How many Americans have heard of Tesla?  I'll guess less than 10%.  If you live on the coasts, are a greenie, are really into cars or very wealthy, then you probably have heard the name but in the rest of the country it has a long way to go.  "No big deal" you say, "they are playing to a niche market."  OK, how small a niche do you think a car company can play to and still survive?  Admittedly, Morgan has lasted quite awhile, but they employ about 160 people and crank out about 600 cars a year.  That doesn't sound like enough to really help save the planet, and it probably won't be enough to cover the costs of developing a car from scratch.  Tesla seems intent on saving the planet and you won't accomplish that through low volumes.  Additionally, Morgans haven't evolved much at all, but Tesla's competition definitely will, and has.

The biggest issue for Tesla is represented by the models I pointed out above.  Lets look at pricing:
Leaf: $32,780 (excluding federal tax credit)
Volt: $41,000 (same as above)
Etrons: Will vary, probably from as low as $50K to $200K
SLS Electric: Too early to say
Porsche: Way too early to say, but it's coming

The Tesla Roadster starts at $101K and the Model S will start at $56,500.  Both of these prices are before the tax credit.

Do you see the problem?  I can buy an electric car from Nissan or Chevy, who have been around and building cars for a long time, for 32-41 grand, or I can buy a 56K Tesla.  For the sports cars, I can buy a Lotus Elise with an electric drivetrain from Tesla, or I can buy a sportscar from Mercedes Benz or Audi.  Which one are you really going to buy?  Still on the fence?  Let's take into account things like...

Dealership Network

For breakdowns, at least initially, I think Tesla is on par with the competition.  Nissan and GM will need some time to handle the teething problems, and I'm sure we will all hear about someone taking their Leaf or Volt for service and someone at the dealership trying to gas it up, or wanting to replace the catalytic converter.  With performance cars, there are always special considerations regardless of the manufacturer.  But over time, how far will Nissan, GM, MB and Audi pull away in terms of service?  One huge advantage they have is a dealer network.  They can each provide you service and if needed, tow your car, to a nearby dealer.  Tesla doesn't have that and has insisted on taking an Apple-like approach to their dealer network, owning each location.  That will limit the number of dealerships that ultimately pop up.

At this point some of you are going, "OK so what?  Do you think there are a ton of Spkyer, Lotus, Morgan, etc. dealerships out there?"  There aren't a ton but then again, they aren't necessarily trying to revolutionize the industry, an industry that in the U.S. has more products on the road than people.  Tesla is and this is no easy task.

Investment from Daimler and Toyota

Yes, Daimler and Toyota have both invested in Tesla.  For Daimler, I believe it was an investment in the purest sense.  They think there is a chance that Tesla will develop their tech enough that it can be used in Daimler products.  So does the Mercedes Benz SLS Electric use Tesla technology? No.  Kinda weird huh?

Toyota has a marketing angle that I believe is the main reason behind the investment.  Toyota had shuttered the NUMMI plant, and Tesla wants to use it.  Toyota was also embroiled in the biggest crisis it had ever faced and could have used some positive PR.  $50 million later, they have some decent PR spin.  But that's not all.  Toyota's had been working on, and has prototypes of, plug in Priuses.  So why do they need Tesla?  Maybe they felt there might be something to gain from looking at their tech, maybe they aren't as far along as they would like, maybe it's a great way to buy a shortcut.  I don't know.

Tesla's Impact is bigger than itself

So I've pretty much laid out my argument.  All of this means I think Tesla is inconsequential and doesn't really matter, right?  After all, Tesla didn't invent the electric car (not by a long shot) and they really haven't mattered much.  Those last 4 words are where you and I might diverge since I think they have mattered quite a bit.  I think the cars coming from more mainstream manufacturers might have never come, or come much later, if Tesla hadn't stepped in and shown that there is a possibility of producing, and selling, electric cars.  Almost as important is that Tesla made an electric SPORTSCAR, not a bland mobile.  By starting a fresh new company unconstrained by bureaucracy, Tesla was able to try something that other makers may have thought of and then decided against.  There is no doubt that Tesla was seen as arrogant by many, possessing an attitude of "Those Midwesterners are doing it wrong, let's show em." (See here.)  Sometimes you have to ignore arrogance and see the idea behind it, it's like being a fan of Kanye West.  On the other hand, building, selling and supporting cars is not like doing the same with a website, iPod or computer (Musk says Tesla is more like Apple or Google than GM or Ford) and I really truly think Tesla is going to learn that the hard way.

As a cop out, when someone doesn't believe you, cite others who agree with you.  Here are my "cop out" links:

http://www.focus.com/fyi/operations/tesla-next-delorean/

http://www.allcarselectric.com/blog/1020424_tesla-model-s-may-fail-to-deliver-on-its-hype

http://siliconcowboy.wordpress.com/2010/07/08/tesla-ipo-fail-why-marketing-shouldnt-be-left-to-engineers/

http://community.nasdaq.com/news/2010-07/the-truth-about-tesla-motors.aspx?storyid=29959