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Tesla has shaken the automotive world with its all-electric Roadster and will now build a gas-electric hybrid. The new approach will be applied in its Whitestar sedan that will appear in 2009, the new model will also be available in all-electric form. So is this important news? I think yes because it seems that Tesla never started with serious hybrid vehicle intentions and really counted on its all-electric approach for both technical and marketing differentiation. So why will they now make a gas-electric hybrid Whitestar? I came up with the following explanations:

1. Range: it s no surprise that Tesla calls their gas-electric car a REV, or Range Extended Vehicle. It of course implies that with hybrid technology you get more miles or kilometers than with the all-electric approach. While the all-electric Whitestar will get 150 to 200 miles before its batteries give up, the hybrid’s small internal combustion motor recharges the battery so in terms of usage it is like a conventional car.
2. Car character: the Tesla is a fun sports car. Everybody loves them but of course some regard them as toys for the young rich boys. Needless to say I belong in the first group -without the money to buy one unfortunately- and would love to take the Tesla for a spin, but would never consider it seriously for a long holiday drive for obvious practical reasons. So at this stage it is a niche showcase model that from the marketing point of view affords to be all-electric because it would never be used for family trips or even a trip with a single suitcase or supermarket bag. The Whitestar on the other hand is a full blown sedan that will compete with the big brands of this world and has no niche to hide behind. If it is ever to stand a chance it has to do what its competitors can do.
3. Which brings us to the unavoidable competition. GM’s Chevy Volt is an REV that will come to market in 2010 with a range of 400 miles! Whether the Whitestar REV’s range is shorter or longer is not that important. What matters is that the Whitestar’s all-electric version does not stand a chance against competition, unless a magic wand installs fresh battery stations along gas stations. European, American and Japanese manufacturers are all going to have hybrids throughout their ranges very very soon. If Tesla does not manage to get on the hybrid sales wave it will stay a niche all-electric car manufacturer with an unlikely future.
4. Which brings us to production volume. The car industry cannot live without it. Even established sports car manufacturers that had annual production volumes of hundreds of cars some years ago, now run in the thousands as they realise how much it helps with lowering production costs. Inescapably, the same applies to Tesla and I think its people realise that a single sports all-electric model will not get them very far in terms of volume and will not help lower production costs even in the medium term. Even when production is farmed out, the price you get depends heavily on the order volume…
5. For the moment, the hybrid approach makes perfect technical sense. I have previously touched the same issue with a post about Project Better Place in Israel. The automotive industry is in a state of flux. Environmental pressure pushes change faster than before. However, existing infrastructure is more difficult to change for technical, financial and political reasons. For this reason, the internal combustion engine is here to stay for years to come, in one form or another. The full use of all-electric cars is automotive utopia, not because the cars are not technically feasible, but because the energy production background and infrastructure is not yet developed to support them. To put it simply, it is like having a super-fast PC with an operating system that cannot support it at all. All large car manufacturers know it and Tesla comes to realise it. Hybrids are an unavoidable step to reduce emissions before zero-emission solutions are better developed.
6. Price and target customer group. The Roadster costs $98,000. The Whitestar will be between $50,000 and $70,000, and surprise surprise, the hybrid will be a little bit cheaper than the all-electric version. The reason? It has fewer batteries and the internal combustion engine is established technology that is not expensive. These prices are by no means cheap, especially for the US where the same model is taxed less and costs much less than in the EU. And bear in mind that GM wants to sell the Volt for $30,000! Still in my opinion, the hybrid Whitestar stands a lot more chances to appeal to a broader range of customers, thus lowering costs and giving Tesla a chance to compete more effectively.

With the Whitestar, Tesla is effectively extending its model range by two models, as its two versions will appeal to different customers. The more wealthy person that does not care much about long routes and the the more practical type that will use it as full time car. In fact, it is a large experiment for Tesla is it now dives in a deep pool of large and competitive sharks. High publicity is great, but it is clear that the company must soon go out there and sell lots of cars. The hybrid choice is an indirect admission that all-electric is not yet practical. Of course, Electronrun will follow relevant developments, stay tuned for news on vehicles, batteries, infrastructure and energy production that will determine what we drive tomorrow.

Link: Crave