Tesla 2012 Annual Report Download - page 38

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In addition, reports have suggested the potential for extreme temperatures to affect the range or performance of electric vehicles. Based on
internal testing, we estimate that our Tesla Roadster would have a 5-10% reduction in range when operated in -20°C temperatures. To the extent
customers have concerns about such reductions or third party reports which suggest reductions in range greater than our estimates gain
widespread acceptance, our ability to market and sell our vehicles, particularly in colder climates, may be adversely impacted.
Additionally, we will become subject to regulations that require us to alter the design of our vehicles, which could negatively impact
consumer interest in our vehicles. For example, our electric vehicles make less noise than internal combustion vehicles. Due to concerns about
overly quiet vehicles and vision impaired pedestrians, in January 2011, Congress passed and the President signed the Pedestrian Safety
Enhancement Act of 2010. The new law requires NHTSA to establish minimum sounds for electric vehicles and hybrid electric vehicles when
travelling at low speeds. New standards must be proposed by mid-2012 for implementation within three years of the Act’s enactment date of
January 3, 2011.
The influence of any of the factors described above may cause current or potential customers not to purchase our electric vehicles, which
would materially adversely affect our business, operating results, financial condition and prospects.
Our success could be harmed by negative publicity regarding our company or products.
From time to time, our vehicles are evaluated by third parties. For example, the show Top Gear which airs on the British Broadcasting
Corporation did a review of the Tesla Roadster in 2008. Top Gear is one of the most watched automotive shows in the world with an estimated
350 million viewers worldwide and is broadcast in over 100 countries. Since originally airing in the fall of 2008, the episode about the Tesla
Roadster has been rebroadcast repeatedly around the world. The review of the Tesla Roadster included a number of significant falsehoods
regarding the car’
s performance, range and safety. Such criticisms create a negative public perception about the Tesla Roadster, and to the extent
that these comments are believed by the public, may cause current or potential customers not to purchase our electric vehicles, which would
materially adversely affect our business, operating results, financial condition and prospects.
The range of our electric vehicles on a single charge declines over time which may negatively influence potential customers’ decisions
whether to purchase our vehicles.
The range of our electric vehicles on a single charge declines principally as a function of usage, time and charging patterns as well as other
factors. For example, a customer’s use of their Tesla vehicle as well as the
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the environmental consciousness of consumers;
•
volatility in the cost of oil and gasoline;
•
consumers
’
perceptions of the dependency of the United States on oil from unstable or hostile countries;
•
government regulations and economic incentives promoting fuel efficiency and alternate forms of energy;
• access to charging stations, standardization of electric vehicle charging systems and consumers’ perceptions about convenience and
cost to charge an electric vehicle;
•
the availability of tax and other governmental incentives to purchase and operate electric vehicles or future regulation requiring
increased use of nonpolluting vehicles;
•
perceptions about and the actual cost of alternative fuel; and
•
macroeconomic factors.