Tesla's Electric Car for the (Well-Off) Masses

The company says its $49,000 Model S can go 300 miles on one charge and carry seven people. But it needs $350 million to start production for 2011

By Christopher Palmeri

With the economy in the tank and oil prices low, most drivers have more to worry about than their gas bills. Still, the prospect of a Silicon Valley company shaking up the moribund automobile industry with a new all-electric car was enough to draw a crowd for the Mar. 26 unveiling of Tesla Motors' Model S.

The first electric car produced by entrepreneur Elon Musk, the South Africa-born co-founder of PayPal, caused a sensation when it rolled out in 2006. The Tesla Roadster was a low-slung, $109,000 rocket ride, with a body based on the Lotus Elise and capable of going from zero to 60 miles per hour in 3.9 seconds. It was among the first cars to marry an all-electric engine with the looks and speed of a sports car. Musk's company, Tesla Motors, claims to have sold 1,200 Roadsters, with 250 delivered to wealthy, tech-savvy eco-enthusiasts in such places as Silicon Valley, Los Angeles, and New York.

The Model S, on the other hand, is more of what motorheads might call a daily driver. It's a four-door sedan with an optional third set of seats that can boost capacity to seven people. At 196 inches long, the Model S is five inches longer than a Honda Accord. Musk told the more than 100 journalists gathered in Los Angeles on Thursday that extra room was essential: "I see it potentially replacing some SUVs."

Quick Recharge

The new car has improved range and battery life over the Roadster. Tesla's first car can travel a maximum of 244 miles on one charge. Powering it up again takes three and a half hours. The Model S claims a 300-mile range and fast-charging technology that can have it ready to roll again in 45 minutes.

Model S battery packs will be easier to remove, so long-distance drivers may one day be able to stop at repair shops and borrow a fully charged pack. Musk hopes to open 40 shops each in the U.S., Europe, and Asia over the next few years.

The Model S is sleek but hardly a head-turner. The front end is slightly reminiscent of a Maserati Quattroporte; the rear, more like a Nissan (NSANY) Altima Coupe. Tesla's chief designer, Franz von Holzhausen, a veteran of General Motors (GM) and Mazda (MZDAY), says the car was not designed to stand out as a uniquely fuel-efficient vehicle, as Toyota (TM) has done with its hybrid Prius and Daimler-Benz (DAI) with its Smart cars.

"I see us slipping out of an era when we have to broadcast," von Holzhausen says. "Our customer base doesn't need that affirmation."

New Kind of Dashboard

Other features will help the Model S stand out. Holzhausen designed a 17-in. flat-panel screen in the dashboard that will contain most of the interior controls: heating, lights, and stereo. It'll come with wireless Internet access so drivers can check e-mail and read restaurant reviews (hopefully, at stoplights). "We're spending a lot of time on the interface," von Holzhausen said. "I don't understand how I can pay $299 for iPhone and then get in my car and still have to turn knobs."