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Why Tesla's $35,000 Model E is a pipe dream

A car that costs 80 percent as much to produce as another can't be half the price. That's the simplistic version why Stanphyl Capital Management says Tesla Motors will not be able to sell its "mass market" sedan for the low, low (by luxury electric-vehicle standards) Elon Musk-backed price of $35,000. In fact, the California-based automaker will take about a $13,000 bath for each unit it sells of the new vehicle, now referred to as the Model E. Stanphyl Capital Management breaks down the fourth-quarter costs and revenue associated Tesla's Model S, of which it sold about 6,900 units during the last three months of the year. In a nutshell, Tesla generated a whopping $106,000 per vehicle sold, with about two-thirds of the company's gross profit coming from battery and optional upgrades. And while Tesla may be able to get the Model E battery costs down to about $8,100 compared to the $15,600 cost of the Model S battery (the smaller car will use a smaller battery that will provide about a 200-mile single-charge range), all of the other stuff brings the Model E's unit cost up to about $48,000. That compares to the $59,600 average cost of a Model S. Fremont, we have a problem. Reports came out in December saying that the Model E may be unveiled at one of next year's auto shows and sales could start as early as 2016. The argument against the possibility of a $35,000 Model E may sound reasonable on paper, but more than a few people have lost money betting against Elon Musk. You can read more at ValueWalk.

Five years ago, the DOE loaned Tesla Motors $465 million

*This post has been updated to reflect the nature of the new funding. Five years ago this week, the US Department of Energy finished the paperwork on its Advanced Technology Vehicles Manufacturing (ATVM) loan to Tesla Motors. Despite a lot of controversy about that program, Tesla managed to pay back the $465 million loan early and with interest. The DOE made four other loans under the ATVM program – to Ford, Nissan, Fisker and a small startup, VPG, that wanted to make natural gas powered vehicles for people in wheelchairs. Ford and Nissan are paying the money back, Fisker and VPG are not. Speaking at the Washington Auto Show this week, Energy Secretary Ernest Moniz said that while the two loans "did not fully perform," the portfolio overall is doing well. Even the vehicle that VPG was going to make is still moving forward because another company stepped in. That's why Moniz was proud to discuss details of a separate funding program that will hand out over $55 million for what the DOE calls, "cutting-edge vehicle technologies that strengthen the clean energy economy." Moniz said the new money – as well as a separate $35-million funding program that will be available in February – will be used for improved batteries and other electrification technologies, lightweight materials and better engines for both light- and heavy-duty vehicles. One thing Moniz singled out was a way to make recharging an EV even easier. "This is directly supporting our EV Everywhere Grand Challenge," he said. The Secretary joked that the manager of the new funds has just had a baby, so anyone who wants some of the money should apply soon, while he's still groggy. "Our goal is to help establish these industries and help them grow," Moniz said, adding that the DOE may emphasize private partnerships in handing out the new loans. The two consequences of that would be to increase the amount of money available and also that, "we think there is an advantage in bringing more lenders and more banks to have experience in terms of getting into debt financing across this whole spectrum of technologies." Moniz said that the US government is handing out all of this money on generous terms.

Recharge Wrap-up: Eberhard helps Chinese EV maker in US, 'Hail a Honda' at Austin City Limits

Honda is partnering with nonprofit ridesharing service Ride Austin to provide "Hail A Honda" service during the Austin City Limits Music Festival. For both weekends of the festival (Sept. 30 – Oct. 2 and Oct. 7 – Oct. 9), attendees can ride to the event for free in a special liveried 2016 Honda CR-V. The Ride Austin app will feature a "Honda at ACL Festival" tab to hail rides, and users will get a free bandana and water. 2016 marks Honda's eighth year as an Austin City Limits sponsor, and the automaker hosts its own stage at the event. Read more from Honda. Tesla cofounder Martin Eberhard is helping a Chinese EV company enter the US market. Chongqing Sokon Industry Group says it has hired Eberhard as a consultant with a two-year contract. Sokon has created a US-based subsidiary called SF Motors, and Eberhard will manage "the integration of the world's top talent for new energy vehicles, to promote the company's product positioning, R&D, design, technical innovation, talent pool, marketing, in the United States." Since helping to found Tesla, Eberhard has worked on EVs with Volkswagen, Atieva, and as an investor in Alta Motors. Read more at Electrek. A supplier for the Tesla Model 3 describes the automaker's perfectionism. Fuji Technica, a die maker supplying aluminum dies for the Model 3, describes its relationship with Tesla in an article from the Nikkei Asian Review. The company calls Tesla a demanding customer, asking for very specific shapes despite the difficulty of working with aluminum. Fuji Technica must work some dies by hand to achieve Tesla's "meticulous specifications." The company is proud of its achievements, though, especially considering its turnaround after years of financial troubles. Read more from the Nikkei Asian Review, and at Inside EVs. Related Gallery Tesla Model 3 View 18 Photos News Source: Honda, Electrek, Inside EVs, Nikkei Asian Review Green Marketing/Advertising Honda Automakers Tesla Transportation Alternatives Electric recharge wrapup