Tesla 2011 Annual Report Download - page 5

Table of Contents
North America and Europe. To date, our customers have driven the Tesla Roadster for an estimated aggregate of over 9.0 million miles. We have
developed extensive software systems to manage the overall efficiency, safety and controls within our vehicles. Additionally, we have met
battery shipping and testing protocols of the United Nations, United States Department of Transportation and other government agencies,
allowing us to ship the Tesla Roadster to a number of countries throughout the world.
We announced our second electric vehicle, the Model S, with the public exhibition of a drivable early prototype in March 2009. We
currently plan to begin production of the Model S in mid-2012. We are designing the Model S to be a four door, five-passenger premium sedan
that offers exceptional performance, functionality and attractive styling. As a fully electric vehicle, the Model S will produce zero tailpipe
emissions while accelerating from zero to 60 miles per hour in a targeted time of under 6 seconds. We currently anticipate that the base Model S
will have an effective price of $49,900 in the United States with the standard 160 mile battery pack, 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. Even without the tax credit, we believe
the base list price will be competitive from a pricing perspective with other premium vehicles. We are designing the Model S to offer a variety of
range options from 160 miles to 300 miles on a single charge, as projected using the EPA’s combined two-cycle city/highway test. The EPA has
announced its intention to develop and establish new energy efficiency testing methodologies for electric vehicles, which we believe could result
in a significant decrease to the advertised ranges of all electric vehicles, including ours.
We anticipate that the initial units of the Model S will be introduced with a Signature Series which will include certain colors and options,
some of which may not be available in the general production of the Model S. We also plan to offer the capability to fast charge in as little as 45
minutes at commercial charging stations that we anticipate may be available in the future and the ability to rapidly swap out its battery pack at a
specialized commercial battery exchange facility to complement its range capabilities. We believe that the Model S will demonstrate our ability
to produce increasingly affordable electric vehicles that offer long-range capabilities and uncompromised performance, energy efficiency,
convenience and design.
We are designing the Model S for a significantly broader customer base than the Tesla Roadster. Accordingly, we currently intend to target
an annual production rate of up to approximately 20,000 cars per year from our planned manufacturing facility in Fremont, California. The
drivable early prototype of the Model S was exhibited to the public in March 2009 and the first alpha prototype was driving before the end of
2010. As of December 31, 2010, we had received approximately 3,400 customer reservations with a minimum refundable payment of $5,000.
We intend to develop a substantially integrated electric vehicle manufacturing facility in Fremont, California for the manufacture of the
Model S and its components. In October 2010, we completed the purchase of this facility from New United Motor Manufacturing, Inc.
(NUMMI). We intend to use the facility for the production of our planned Model S vehicle and to build our future electric vehicles. We have
entered into a loan agreement with the United States Federal Financing Bank and United States Department of Energy (DOE Loan Facility), to
arrange loans for up to $465.0 million loan, $363.9 million of which is intended for the continued development of the Model S and the build out
of our Fremont facility.
The electric powertrain we developed for the Tesla Roadster has provided the foundational technology for our planned Model S, our future
vehicles and for electric powertrain components that we have begun selling to Daimler and its affiliates and that we intend to sell to Toyota. Our
electric powertrain consists of only four physical components: our modular battery pack, our power electronics module, gearbox and our motor.
This component design contains far fewer moving parts than a gasoline powertrain. These features enable us to adapt it for a variety of vehicle
applications. The Tesla Roadster electric powertrain will be the basis of the Model S powertrain, with design enhancements. Similarly, using the
existing Tesla Roadster battery pack, we have worked with Daimler since June 2008 to develop a battery pack and charging system for an initial
trial of the Smart fortwo electric drive vehicle pilot program in at least five European cities. We have expanded this business
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