Tesla 2015 Annual Report Download - page 6

We manufacture our products primarily at our facilities in Fremont, California, Lathrop, California and Tilburg, Netherlands. We are
developing the Tesla Gigafactory, a facility where we intend to work together with our suppliers to integrate battery
precursor material, cell, module and battery pack production at a site near Reno, Nevada. We plan to use the battery
packs manufactured at the Gigafactory for our vehicles, starting initially for Model S and Model X in 2016, and later for
our Model 3 vehicle, as well as for stationary storage applications.
Our Vehicles and Products
We currently design, develop, manufacture and sell fully electric vehicles and electric powertrain components. We are currently selling
primarily the Model S.
Model S
Model S is a fully electric, four-door, five-adult passenger sedan that offers compelling range and performance with zero tailpipe
emissions. We began customer deliveries in June 2012. As of December 31, 2014, we had delivered almost 57,000 Model S vehicles.
Model S offers a range on a single charge of up to 265 miles as determined using the United States EPA’s combined two-cycle
city/highway test. To complement this range, we also offer the capability to fast charge Model S at our Supercharger facilities. In addition, we
designed Model S to incorporate a modular battery pack in the floor of the vehicle, enabling it to be rapidly swapped out at certain of our service
centers and specialized commercial battery exchange facilities that we anticipate may be available in the future.
The 60 kWh and 85 kWh battery pack versions 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 offer performance and all-wheel drive dual motor system options with our 85 kWh Model S. The performance version of our
All-Wheel Drive Dual Motor Model S accelerates from 0 to 60 miles per hour in 3.2 seconds, making it the quickest sedan in the world
according to Motor Trend magazine.
We believe Model S offers a unique combination of functionality, convenience, safety and styling without compromising performance and
energy efficiency. With the battery pack in the floor of the vehicle and the motor and gearbox in line with the rear axle, our single motor Model
S provides best in class storage space of 31.6 cubic feet, including storage under both the tailgate and the hood. By way of comparison, this
storage space exceeds the approximately 14 cubic feet of storage available in the 2015 BMW 5 Series sedan and the approximately 18 cubic feet
of storage available in the 2015 Cadillac XTS. In addition, we have designed Model S to include a third row with two rear-facing child seats,
allowing us to offer seating for five adults and two children. Model S is also available with premium luxury features, including a 17 inch touch
screen driver interface and our advanced autopilot system. Our autopilot system, which is being progressively enabled over time through over-
the-
air software updates, includes both safety features such as collision warning systems and automatic braking and convenience features such as
traffic aware cruise control. Model S also offers advanced wireless connectivity, such as 3G connectivity, and driver customization of the
infotainment and climate control systems of the vehicle. 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.
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 12.1 cents per
kilowatt-
hour and an average gasoline price of $2.83 per gallon over the full ownership of the vehicle which were the average electricity cost and
premium gasoline price in the United States, respectively, for December 2014, and based on our estimate of the energy efficiency of Model S,
we estimate that our Model S could save approximately $1,600 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.
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.
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