Tesla plans to debut a cheaper 'Model E' in 2015
Tesla Motors is planning to unveil a new electric car in early 2015, which could sell for around $40,000. According to reports, the more mainstream offering could be key to the automaker’s future growth.
Currently, Tesla’s only offering is the Model S, a premium sport sedan that starts at $71,070 before any state or federal tax incentives – that price can increase steeply with additional options and add-ons. The Palo Alto automaker also plans to release the long-awaited Model X sport utility vehicle in late 2014, although that is expected to sell in the same price range.
Tesla announced on Friday that the third, lower priced model (possibly the Model E) could make its official debut at the 2015 North American International Auto Show in Detroit. It would begin selling in 2016 or 2017.
Tesla, the brainchild of Elon Musk has been promising a more affordable electric car for some time. Delivering one will be critical to its ongoing growth and success.
“This is hugely important for Tesla,” Thilo Koslowski, an auto industry analyst at Gartner told the LA Times. “This is ultimately the car that will make Tesla a household brand rather than just something in the premium segments. No car company can live off 20,000 to 30,000 sales a year and be profitable in the long term.”
Tesla is close to reaching the 21,000 milestone of its current vehicle, the Model S sedan. The automaker hopes to double that figure in 2014, with the introduction of the Model X.
Increasing battery range
A new, more affordable and mainstream option would certainly expand the company’s reach, however Tesla would need to squeeze a 200 mile range out of a smaller, more cost effective battery. “One hundred to 120 miles of range isn't enough for mainstream consumers to really feel comfortable,” said Koslowski.
A $40,000 car with a 200-mile range would give Tesla a significant competitive advantage, as mainstream automakers probably will not hit those cost and range targets for at least another year or two, Koslowski said.
SEE MORE: Tesla posts surprising profits
Ramping up production
Also important for Tesla's success will be its ability to ramp up production volumes. The current Model S is built at Tesla's Fremont, Calif., plant and uses only about a quarter of the facility's 5 million square feet of space. The Model X will also be built at this location.
The X will use essentially the same drivetrain as the current rear-wheel-drive Model S, apart from it will have another electric motor driving the front wheels, making it all-wheel-drive. The vehicle will sit higher than the Modal S and will use a pair of gullwing-style doors for easier access to the second and third row of seats, Tesla said.
Tesla is already taking refundable $5,000 deposits for the Model X.
The Model X and S are considered by the company as the second step in its evolution of electric cars. The first was the Tesla Roadster, the two-seat sports car of which Tesla sold about 2,300 copies worldwide, and which is no longer in production.
The newest model debuting in 2015 will be the third step, as its platform will differ significantly from anything else Tesla has built so far.
The plan for a mainstream model follows a strategy that Tesla Chief Executive Elon Musk laid out in a 2006 blog post.
“The strategy of Tesla is to enter at the high end of the market, where customers are prepared to pay a premium,” Musk wrote in a post titled The Secret Tesla Motors Master Plan (just between you and me). “Then drive down market as fast as possible to higher unit volume and lower prices with each successive model.”
Marketing matters: from IBM to Kyndryl
Prior to joining Kyndryl as Chief Marketing Officer, Maria had a 25-year career at IBM, most recently as the tech giant’s CMO where she oversaw all marketing professionals and activities across North America, Canada and Latin America. She has held senior global marketing positions in a variety of disciplines and business units across IBM, most notably strategic initiatives in Smarter Cities and Watson Customer Engagement, as well as leading teams in services, business analytics, and mobile and industry solutions. She is known for her work with teams to leverage data, analytics and cloud technologies to build deeper engagements with customers and partners.
With a passion for marketing, business and people, and a recognized expert in data-driven marketing and brand engagement, Maria talks to Business Chief about her new role, her leadership style and what success means to her.
You've recently moved from IBM to Kyndryl, joining as CMO. Tell us about this exciting new role?
I’m Chief Marketing Officer for Kyndryl, the independent company that will be created following the separation from IBM of its Managed Infrastructure Services business, expected to occur by the end of 2021. My role is to plan, develop, and execute Kyndryl's marketing and advertising initiatives. This includes building a company culture and brand identity on which we base our marketing and advertising strategy.
We have an amazing opportunity ahead at Kyndryl to create a company brand that will stand apart in the market by leading with our people first. Once we are an independent company, each Kyndryl employee will advance the vital systems that power human progress. Our people are devoted, restless, empathetic, and anticipatory – key qualities needed as we build on existing customer relationships and cultivate new ones. Our people are at the heart of this business and I am deeply hopeful and excited for our future.
What experiences have helped prepare you for this new opportunity?
I’ve had a very rich and diverse career history at IBM that has lasted 25+ years. I started out in sales but landed explored opportunities at IBM in different roles, business units, geographies, and functions. Marketing and business are my passions and I landed on Marketing because it allowed me to utilize both my left and right brain, bringing together art and science. In college, I was no tonly a business major, but an art major. I love marketing because I can leverage my extensive knowledge of business, while also being able to think openly and creatively.
The opportunities I was given during my time at IBM and my natural curiosity have led me to the path I’m on now and there’s no better next career step than a once-in-a-lifetime-opportunity to help launch a company. The core of my role at Kyndryl is to create a culture centered on our people and growing up in my career at IBM has allowed me to see first-hand how to prioritize people and ensure they are at the heart of progress in everything Kyndryl will do.
How would you describe your leadership style?
I believe that people aren't your greatest assets, they are your only assets. My platform and background for leadership has always been grounded in authenticity to who I am and centered on diversity and inclusion. I immigrated to the US from Chile when I was 10 years old and so I know the power and beauty that comes from leaning into what makes you different from other people, and that's what I want every person in my marketing organization to feel – the value in bringing their most authentic self to work every day. The way our employees feel when they show up for themselves authentically is how they will also show up for our customers, and strong relationships drive growth.
I think this is especially true in light of a world forever changed by the pandemic. Living through such an unprecedented time has reinforced that we are all humans. We can't lead or care for one another without empathy and I think leaders everywhere have been reminded of this.
What’s the best leadership advice you’ve received?
When I was growing up as an immigrant in North Carolina, I often wanted to be just like everyone else. But my mother always told me: Be unique, be memorable – you have an authentic view and experience of the world that no one else will ever have, so don't try to be anyone else but you.
What does success look like to you?
I think the concept of success is multi-faceted. From a career perspective, being in a job where you're respected and appreciated, and where you can see how your contributions are providing value by motivating your teams to be better – that's success! From a personal perspective, there is no greater accomplishment than investing in the next generation. I love mentoring younger professionals – they are the future. I want my legacy as a leader to include providing value in work culture, but also in leaving a personal impact on the lives of professionals who will carry the workforce forward. Finding a position in life with a job and company that offers me a chance at all of that is what success looks like to me.
What advice would you give to your younger self just starting out in the industry?
I've always been a naturally curious person and it's easy for me to over-commit to projects that pique my interest. I've learned over years of practice how to manage that, so to my younger self I’d say… prioritize the things that are most important, and then become amazing at those things.