Tesla 2015 Annual Report Download - page 5

PART I
Overview
We design, develop, manufacture and sell high-performance fully electric vehicles, advanced electric vehicle powertrain components and
stationary energy storage systems. We have established our own network of sales and service centers and Supercharger stations globally to
accelerate the widespread adoption of electric vehicles. We believe our vehicles, electric vehicle engineering expertise, and business model
differentiates us from incumbent automobile manufacturers.
We are currently producing and selling our second vehicle, the Model S sedan. Model S is a four door, five-passenger premium sedan
that offers exceptional performance, functionality and attractive styling. Model S inherited many of the electric powertrain innovations we
introduced with our first vehicle, the Tesla Roadster. We commenced deliveries of Model S in June 2012 and as of December 31, 2014 we have
delivered almost 57,000 Model S vehicles worldwide. Since its launch, Model S has won several awards, including the prestigious Motor Trend
Car of the Year for 2013. Surveys by Consumer Reports gave Model S the highest customer satisfaction score of any car in the world in 2013
and gave Tesla Service the best overall satisfaction rating in the entire automotive industry in 2015. Model S also earned the highest safety rating
in the United States by the National Highway Traffic Safety Administration. We have continued to improve Model S by introducing
performance, all-wheel drive dual motor, autopilot options, and free over-the-air software updates.
We anticipate commencing customer shipments of our third vehicle, the Model X crossover, in the third quarter of 2015. 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 our all-wheel drive dual motor system and fast 0 to 60 miles per hour acceleration.
After the Model X, our goal is to introduce the Model
3, a lower priced sedan designed for the mass market, in 2017.
The commercial production of fully electric vehicles that meets consumers’ range and performance expectations requires substantial
design, engineering, and integration work on almost every system of our vehicles. Our design and vehicle engineering capabilities, combined
with the technical advancements of our powertrain system, have enabled us to design and develop electric vehicles that we believe overcome the
design, styling, and performance issues that have historically limited broad consumer adoption of electric vehicles. As a result, we believe our
customers enjoy several benefits, including:
We sell our vehicles through our own sales and service network which we are continuing to grow globally. We believe the benefits we
receive from distribution ownership will enable us to improve the speed of product development and improve the capital efficiency of our
business. We are also continuing to build our network of Superchargers in the United States, Europe and Asia to provide properly equipped
Model S vehicle owners as well as future Tesla vehicle owners with fast and free charging to enable convenient long distance travel.
In addition to developing our own vehicles, we have developed and currently sell and service full electric powertrain systems and
components to other automobile manufacturers. We also produce and sell stationary energy storage products for use in homes, commercial sites,
and utilities. The applications for these battery systems include backup power, peak demand reduction, demand response, and wholesale electric
market services.
4
I
TEM 1.
BUSINESS
•
Long Range and Recharging Flexibility.
Our vehicles offer ranges that are over double the range of any other commercially
available electric vehicle. In addition, our vehicles incorporate our proprietary on-
board charging system, permitting recharging from
almost any available electrical outlet. Model S also offers fast charging capability from our Supercharger network. We believe the
long-range and charging flexibility of our vehicles will help reduce consumer anxiety over range, alleviate the need for expensive,
large
-
scale charging infrastructure, and differentiate our vehicles as compared to those of our competitors.
•
Energy Efficiency and Cost of Ownership.
We believe our vehicles offer consumers an attractive cost of ownership when compared
to similar internal combustion engine or hybrid electric vehicles. Using only an electric powertrain enables us to create a lighter,
more energy efficient vehicle that is mechanically simpler than currently available hybrid or internal combustion engine vehicles.
We currently estimate that the cost to fuel our vehicles is approximately one-fourth that of comparable internal combustion vehicles
in the United States, and even less internationally where gasoline prices are typically higher. We also expect our electric vehicles
will have lower relative maintenance costs than hybrid, plug-in hybrid, or internal combustion engine vehicles due to fewer moving
parts and the absence of certain components, including oil, oil filters, spark plugs and engine valves. Additionally, government
incentives that are currently available can reduce the cost of ownership even further.
•
High
-Performance Without Compromised Design or Functionality.
We believe our vehicles deliver unparalleled driving experiences
with instantaneous and sustained acceleration through an extended range of speed. In addition, our Model S seats five adults,
provides best in class storage in the trunk and hood while offering design and performance comparable to, or better than, other
premium sedans.