Tesla 2014 Annual Report Download - page 8

Table of Contents
wireless connectivity, such as 3G connectivity, and driver customization of the infotainment and climate control systems of the vehicle. We
designed Model S to be incorporate new functionality through wireless updates, which allows us to continually improve Model S over time.
Model S has also achieved a five star safety rating. We believe the combination of performance, safety, styling, convenience and energy
efficiency of Model S positions it as a compelling alternative to other vehicles in the luxury and performance segments.
The 60 kWh and 85 kWh battery pack options of Model S have an effective base price of $62,400, and $72,400, respectively, in the United
States, assuming and after giving effect to the continuation of a United States federal tax credit of $7,500 for the purchase of alternative fuel
vehicles. We also offer a performance version of Model S for an effective base price of $85,900.
We have designed Model S to provide a lower cost of ownership as compared to other vehicles in its class. We consider the purchase price,
cost of fuel and the cost of maintenance over a six year ownership period in this calculation. We assume comparable residual values, warranties,
insurance costs and promotions and assume that currently available consumer incentives are still available at the time of a Model S purchase. In
addition to the competitive pricing of Model S relative to other premium vehicles, we estimate that customers of electric vehicles will enjoy
lower fuel costs. For example, assuming an average of 15,000 miles driven per year, an average electricity cost of 11.8 cents per kilowatt-hour
and an average gasoline price of $3.24 per gallon over the full ownership of the vehicle which were the average electricity cost and gasoline
price in the United States, respectively, for December 2013, and based on our estimate of the energy efficiency of Model S, we estimate that our
Model S could save approximately $1,800 per year less in fuel costs than a comparable premium internal combustion engine sedan. In
international markets, where gasoline prices can be 2-
3 times those of the United States, the savings are greater. Furthermore, we expect Model S
will have lower maintenance costs than comparable premium internal combustion engine sedans due to fewer moving parts and the absence of
certain components, including oil, oil filters, spark plugs and engine valves.
We have designed Model S with an adaptable platform architecture and common electric powertrain that we intend to leverage to create
future electric vehicle models, including our Model X. In particular, by designing our electric powertrain within the chassis to accommodate
different vehicle body styles, we believe that we can save significant time in future vehicle development. In addition, we believe our strategy of
using currently available battery cells will enable us to leverage improvements in cell chemistries and rapidly introduce planned vehicles with
different range options.
The Tesla Roadster
Our first vehicle, the Tesla Roadster, is the first high-performance electric sports car. The two-seat, convertible Tesla Roadster has a
combination of range, style, performance and energy efficiency that we believe is unmatched in the market today. It can accelerate from zero to
60 miles per hour in as little as 3.7 seconds and has a maximum speed of approximately 120 miles per hour. The Tesla Roadster also has a range
of 245 miles on a single charge, as determined using the United States EPA’s combined two-cycle city/highway test. We have sold
approximately 2,500 Tesla Roadsters to customers in over 30 countries, predominately in North America and Europe. We concluded the
production run of the Tesla Roadster in January 2012.
Model X
In February 2012, we revealed an early prototype of the Model X crossover as the first vehicle we intend to develop by leveraging the
Model S platform. This unique vehicle has been designed to fill the niche between the roominess of a minivan and the style of an SUV, while
having high performance features such as a dual motor all-wheel drive system. Model X will seat seven adults. We anticipate that we will make
Model X available with 60 kWh and 85 kWh battery pack options, with pricing of each version similar to those of a comparably equipped Model
S. We currently intend to target an initial annual production rate of approximately 20,000 vehicles per year from our Tesla Factory. We expect to
have production design Model X prototypes on the road by end of
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