Thu, Jan 16, 2014 - Page 15 News List

Tesla sales up despite safety issues


Electric car upstart Tesla brushed off a new safety issue on Tuesday, as it turned in fourth-quarter sales numbers that underscored its dominance of the US electric car market.

Tesla founder Elon Musk said that the National Highway Traffic Safety Administration recall announcement for a charging adapter for Tesla’s hit Model S should not be branded a “recall,” since the issue was addressed electronically via a software update.

Fourth-quarter sales numbers underpinned that confidence.

Tesla sold about 6,900 of its luxury electric sedans in the period, as the company continued to step up production to meet a huge backlog of orders.

For the entire year Tesla remained just under 20,000 cars, and the recent quarter’s pace suggested it could grow another 40 percent or more this year.

That showed that avid buyers shrugged off safety concerns that arose last year after three Tesla Model S caught fire.

All three hit hard objects on the road which broke holes into the car’s battery protection plate underneath, causing the batteries to overheat and burst into flame.

No one was hurt in the incidents, and the company has insisted that regular cars suffer fire incidents at a much higher rate.

“People realize it is a very safe car ... one of the safest, if not the safest, car on the road,” Tesla vice president for global sales Jerome Guillen said at the Detroit auto show on Tuesday.

Even so, the highway traffic safety agency is investigating to see if there is an overriding safety concern, while Tesla says it is working to boost protection from objects in the roadway.

Guillen would predict only “reckless growth” for this year, with sales picking up in Europe after the US and Canada markets, and the car’s first deliveries in China coming within weeks.

Despite a price that begins at about US$64,000 and rises above US$100,000 in the US after subsidies, Tesla has staked out center ground in the electric market, where unit sales reached only about 96,000 units, a drop in the bucket of the total US car market of about 16.5 million vehicles.

With its roots in Silicon Valley and selling its cars online instead of in dealerships, Tesla still plays the industry outsider, and this week Musk again snubbed the annual Detroit show, the country’s premier vehicle showcase.

On top of its good looks, Tesla’s strengths have been some of the best quality and safety ratings from industry experts.

However, its strength in a mostly gasoline-fueled industry is boosted by a growing network of “supercharger” stations that it promises will very soon allow a Tesla owner to cross the country without fear of running out of power.

In addition to slow charge stations more widespread, the supercharger chain now has 80 sites, and the company is opening nearly one a day, Guillen said.

“The cross-country route is almost finished,” he said.

Tesla has the cash as well to continue that effort. The company’s shares were fairly static for three years after its 2010 initial public offering, but took off last year, taking its market value to nearly US$19 billion. That compares with US$55 billion for General Motors, a company which sold 9.7 million cars last year, more than 500 times Tesla’s output.

Tesla shares rose nearly 13 percent to US$157.33 on Tuesday.

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