The Tesla Roadster: Running on Empty?

Abstract

Technology-intensive product development involves huge up-front investments into research design and development, prototype testing, standardization, and eventual commercialization. Often, such start-up ventures spend several years before they manage to achieve critical mass in sales volumes and to break even on their initial investments. Yet, such ventures are of great interest to equity investors owing to the potential upside that a breakthrough could generate, forcing well-established technology and mature industry players to play catch-up. The Roadster was the first of several electric vehicles (EVs) proposed to be commercially launched by California/Palo Alto-based Tesla Motors. The company had made substantial investments into the design and development of the product and a further few years making losses from the sale of the Roadster.

It’s a head-turner, jaw-dropper…If this is the future of the automobile, I want it.

—Warren Brown, The Washington Post, 25 January 2009

Tesla is arguably making the most exciting car in the world today.

—Gregory Kats, President of Capital-E and

Fmr. Director of Financing for RE and EE, Department of Energy, William J. Clinton Administration,

International Herald Tribune, 24 May 2013