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Joe Fedorowicz

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Tesla’s mainstream Model E could ruin big auto’s run

I started following Tesla motors before they released the Roadster, before the IPO,  before they released the Model S and definitely before they were a major player in the automotive industry. One thing is clear now, however, Elon Musk and co. are not playing around.

What started as a rich guy’s hobby soon turned into a venerable business. Tesla Motors is still not rolling in dough. They aren’t making Apple money and, despite reports to the contrary, Apple isn’t going to be buying them.  Still, the concept of first developing a car for the 1-percent — a car that cost most of my first house — was one that was laughed at in the beginning. Surprise, surprise. A wait list of a couple years could not be proven wrong and while Tesla started off as a sign of wealth for the super-wealthy, this is slowly changing.

The Model S showed that Tesla was here to stay. The sedan, which was not the technological marvel that the Roadster was, still had a range of between 230 and 300 miles per charge. It could still go 0-60 in 5.6 seconds, as opposed to the four seconds or so for the extremely-sporty Roadster. Most importantly, the Model S was sold for $70,000 – $80,000, almost $30,000 less than Tesla’s first car.

I couldn’t afford one, but the 1-percent quickly grew to, I don’t know, 2.5-percent of people.

The Model X, a sleek crossover SUV. (Tesla Motors)
The Model X, a sleek crossover SUV. (Tesla Motors)

The Electric Car has been a pipe dream for almost three decades. Now, with Tesla readying their third model for production, it appears that the idea might become a reality. The third Tesla, named the Model X, will be a Crossover SUV that is built primarily on the Model S platform.

The extremely-popular crossover category will get an infusion of talent when this is released, and it will be sold for a similar $60,000.

All this is well and good, if you have around $700 a month to spend on an electric car. Sure the $.02 a mile electricity cost (you spend about $.12 a mile on gas now) is appealing, but coming up with the dough is tough. Until now.

Details have been leaking out for some time now about Tesla’s fourth car, a Model E, which will be the first car that is truly available to the mainstream of this world. Codenamed Bluestar, the car would be a more conventional sedan, much smaller than the extremely large Model S sedan. Reports have the car with a 200-mile range, slightly down from their other models but still pretty impressive considering most people do not drive 200-miles without a chance to recharge. The highest range at this point in the mass-produced market? 70-miles for the Nissan Leaf.

I wouldn’t expect the 5.6 second 0-60 time of the Model S, but assume that the same drop will occur that did between their last two cars. The 2011 Roadster came in at 3.7 seconds (CRAZY), meaning that the drop to the Model S was a 66-percent downgrade in acceleration (but still tops in the class). The same drop to the Model E would mean an 8.5 second 0-60, still above average for the price range.

All of this, and I didn’t even mention the fact that the maintenance on these cars is low. There is little oil, no transmission and just an electric engine. It is basically a remote controlled car that can get you to work more quickly, and more stylish, than anything else. At a price that is accessible for a strong majority of new car buyers.

And these are people that will no longer be stopping at gas stations to fill up. At $.12 a mile, the average American spends about $1440 on fuel per year. At $.02, the Tesla owner will pay $240. That is exactly $100 a month, and gone are the quarterly oil changes. My transmission check is out. No longer will the moving parts of your car’s engine be an issue.

The implications of this math are grave. Given the choice between a Tesla at $30,000 (or so, and this before a current $7500 government rebate) and any other mid-sized sedan or coupe, I’ll side with Mr. PayPal. 

And I think you will too. Other car makers better get on it.

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Sapphire Crystal iPhone screens will put Android phones on ice

I’ve had three iPhones in the past two years, having smashed my iPhone 5 fumbling with my mailbox.

My sister, a 22-year-old, is the worst when it comes to iPhones. I swear she has single-handedly moved Apple’s stock from $400 to $500. She’ll buy a phone, break it, deal with it or fix it at the mall, and then break it again. At this moment, I currently have a friendly wager with her that her current 5s will be broken within the month. I’ll keep you updated.

There is no worse feeling than that half-second from when your iPhone leaves your hand to when it hits something hard. You pick up the phone, knowing that you’ll now have to deal with the spider cracks across the front. Gone is the beauty of owning an iPhone, as now you have a broken iPhone. It is functional and, for the most part, still does what you need it to — but it just is not the same.

All this might be changing, and boy, is it a game changer. It is no rumor that Apple is planning on using Sapphire Crystal in an upcoming device, whether it be a iPhone or the rumored iWatch, but I don’t believe the average consumer understands what this means. See below:

Just imagine no fear when that phone flies out of your hand, hitting a sharp corner or a hard surface. Imagine those minuscule scratches not being apparent on a device of just six months of use. A phone that could be considered tougher than most, without a case, with the popularity of an iPhone.

This will be copied. Samsung will come in and have a Sapphire Crystal phone soon after the possible iPhone is released, just like they did with the fingerprint scanner. The problem is, the new material will need new factories. Apple has already begun crafting this for the new phone, and they are doing so in the United States. This jump on the competition, and the infrastructure to support it, will allow a more expensive material be produced at cost. And while Android sales continue to rise, the profit margins for the phones will start to go up as well. Samsung will not be manufacturing their own crystal. Neither will HTC or Motorola.

They’ll either use a lesser material, like Corning’s Gorilla Glass (of which Samsung owns about 10%), or they will sell the phone at a loss. These phone makers cannot charge more because that is their product’s appeal, that they are slightly cheaper than Apple’s product.

This will be an exciting year in Apple world. We might see a new AppleTV, as Jared pointed to yesterday. We’ll probably see a watch. And we might get a phone that you can drop a cinderblock on.