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My Town Hall Notes

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Here are my notes from the "Town Hall" conference. . .

Production car number one -- Elon's car -- has been assembled at Hethel. This car does not have the final transmission, and it has a life expectency of only a few thousand miles before the transmission is liable to fail. Elon apparently finds this acceptable, but he acknowledges that that's not going to fly with Tesla's regular customers.

The first and second transmission suppliers couldn't deliver, and now Tesla are on their third and fourth suppliers. That means they have two companies working on the problem in parallel. As Ze'ev explained it, even if one fails the other will come through. If they are both successful then Tesla will be able to accelerate their production plans. Now that Tesla is a recognized name, it's easier to get the bigger and more experienced transmission companies to work with them.

The EV has very unique transmission requirements, and Tesla have learned a great deal about them. "We've seen every possible way a transmission can fail." Transmission companies 3 & 4 are not starting from scratch; they are taking the existing transmission design and improving it. The design itself belongs to Tesla, and could become an important IP asset for the company. White Star will "probably" use the same transmission unit as the Roadster.

A single-speed transmission wouldn't solve the problem. Some of the problems they've experienced are related to shifting, but many are not. Elon expressed frustration with durability problems, because these are things that only show up after driving the car a few thousand miles. That makes the problems time-consuming to diagnose and fix. Tesla will probably ship at least some of the first cars with a less-than-perfect transmission and slightly reduced performance, then upgrade them later. (Ze'ev pointed out how expensive the upgrades could be for Tesla, but insisted they'll do it regardless.)

The car is very nearly 100% approved for sale, from a regulatory standpoint. There is a minor test, a "door vibration" test as I understood, which is all that remains. No mention was made of the airbag exepmtpion, but it would seem to be implied that they have that resolved.

The previously announced EPA range of 245 was the result of an error by the testing lab. The corrected result will more likely be somewhere in the area of 220-230 miles. This does not reflect any change in the car's actual performance, and the "real world" results described on Tesla's website are still as valid as they were before. It is also likely that some changes to the car will require re-testing for range, so it will be some time before there is a truly final, official number that goes on the window sticker.

A question was asked of why they couldn't get a higher top speed from the car. The explanation was, to design the car to be stable and operate correctly at a high speed would have required compromises that would have reduced its energy efficiency. For example, the aerodynamics would have to generate more downforce to keep the car glued to the road at that speed, which would result in increased drag at normal driving speeds. Other parts would have to be over-engineered and their weight increased.

There is no change to Tesla's "Master Plan". They are not planning to sell out to any other company. They are going through another private investment round now. They do eventually want to go public, but they are wary of doing that too early. Fundraising is not a concern for the company's immediate survival. According to Elon, even if all their many other investors got cold feet, he personally would back the company financially to whatever extent necessary.

Future Tesla cars, including White Star, may be "pure EVs" or "pure EVs with range extenders" (apparently all are pure, but some are more pure than others). Tesla's goal is to increase the number of miles people drive on grid power, and they are agnostic about the means used to achieve that.

Elon reiterated several times that they are absolutely committed to delivering a car that buyers will love. Production will be very slow until the transmission problems are fully resolved, which means full-rate production will probably begin about summer, probably late summer. There are some uncertainties about the schedule, and they are trying not to over-promise until they have it figured out better.
 
They would not promise that all 600 (or so) present buyers would get cars by the end of 2008. I got the distinct impression that this is unlikely to happen. Being #584, I'm expecting a 2009 model. Up until now, I had some hope that it would just make it in 2008, like Santa would deliver it on Christmas eve or something.

Also, they are not yet ready to declare what the warranty period and coverage will be, but it would be appropriate for a sports-type car. Again, my impression is that it would not be the 7-years, 100,000 miles full drivetrain warranty that one caller requested.

I thought it was a very good conference, lots of good information. I recorded it, but I'm not sure how that turned out. I'll have a chance to give it a listen tonight or tomorrow.
 
Thanks for posting the recap, folks.

..."pure EVs with range extenders"...

I still struggle with that phrase and concept.
If it is a BEV with a detachable generator, that you only take on long road trips, I could see that.
But if there is an ICE permanently part of the vehicle I will always think of it as a hybrid.
 
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Thanks for the posts gentlemen.

Good to see continued openness.

A 4th transmission supplier! Well at least some good will come of it if Tesla can get a few more patents out of the process.

I hope that Elon's comment about the depth of his own pockets can be tested with covering the cost of the transmission upgrades when they become available. Especially for car #2 :)

Mistake at the EPA lab? By 15 -25 miles? Maybe this happens a lot, we just never hear about it.
 
We Want our Transparency Back

I’m sorry but this is not “Openness.” This is damage control. The former “Open” policies were a way of doing business transparently in a very open and public way. This was a meeting with customers to make them feel better about the very questionable recent events. Events that were obviously not addressed and are still of great concern. I’m not saying this is the beginning of the end or anything. However, this meeting is not representative of the type of communication we have come to expect from Tesla.

I do fear that this is what we will continue to see from the current management. Just because you call it a blog that doesn’t mean you are being open. The recent posts have been no more than new marketing propaganda or more damage control for typos in news stories.

It is important that the new management at Tesla understand that we have come to expect a certain company culture from them. It is this culture that should be at the core of the company and our support of such a company. Just going through the motions while making unjustified decisions will not cut it. We know when it is being faked
 
Tesla will probably ship at least some of the first cars with a less-than-perfect transmission and slightly reduced performance, then upgrade them later. (Ze'ev pointed out how expensive the upgrades could be for Tesla, but insisted they'll do it regardless.)

Promises of a free transmission upgrade with purchase are definitely a bit odd, but perhaps the best attempt to salvage this situation.

But what about the terms... Do you get it in writing? Do they replace your gen 1 trans if it is still working a year later at 10,000 miles? Do they automatically retrofit everyone even if a particular car hasn't developed problems? This is a like a pro-active recall notice before they start shipping!

Wouldn't there be some sort of safety liability question if you ship a vehicle knowing full well the transmission may fail soon? Couldn't transmission failures lead to possible accidents?

I want to be positive here, but this sounds like it may not be a viable approach to get past this particular problem.
At least not on a production car for road use on sale to the general public. Maybe you sign something on delivery absolving them of liability related to transmission failures?!

This is really an unfortunate situation.
 
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I’m sorry but this is not “Openness.” This is damage control. The former “Open” policies were a way of doing business transparently in a very open and public way. This was a meeting with customers to make them feel better about the very questionable recent events. Events that were obviously not addressed and are still of great concern.

Not sure what you are referring to. As far as I could tell, they answered every question that was asked.
 
@dogtown

I disagree with you. First of all, I have managed communication at Tesla for over a year now so you can criticize me on how we are communicating but it has nothing to do with the recent changes. The second place where I disagree is that you seem to imply that an open invitation to all customers to come to our place of work or join us by conference call) and meet the entire executive team for a face to face meeting where any questions can be asked and addressed is somehow a step backwards from our previous practice, which consisted mostly of blogs. i am a big fan of the company blogs and definitely want to continue them but I would argue that the key issues that are concerning our customers were great enough that it was much more important to provide a face to face forum rather than a blog. Last, I don't think that customer drives and first drives with the car companies is marketing propaganda. It is a very important and serious milestone and one that I think people are very interested in hearing. Im the first to admit that there has been less communication in recent months and I'll take the blame for that, but we have had our hands full with leadership changes and a very intense focus on the issues at hand, and I have been loathe to fill the void with anything but the most meningful types of updates, which in recent times has been reports of meaningful progress on the transmission and the status of the roadster program.

Darryl
 
Promises of a free transmission upgrade with purchase are definitely a bit odd, but perhaps the best attempt to salvage this situation.

But what about the terms... Do you get it in writing? Do they replace your gen 1 trans if it is still working a year later at 10,000 miles? Do they automatically retrofit everyone even if a particular car hasn't developed problems? This is a like a pro-active recall notice before they start shipping!

Wouldn't there be some sort of safety liability question if you ship a vehicle knowing full well the transmission may fail soon? Couldn't transmission failures lead to possible accidents?

Some of this was discussed actually.

My understanding is that the current transmission isn't considered durable or safe enough to ship to regular customers. They will at least make it safe (so it won't seize up) before doing that.

The early transmission would be an option for those near the beginning of the waiting list. In other words, if you prefer to wait for it to be perfected, then you can wait (and presumably still get your Founder's Series or "Signature 100" car). Those who get the early transmission will know what they are getting.

The cars with early transmissions will be programmed for slightly less performance in order to "baby" the transmission. Elon clearly promised that everybody will end up with a full-performance car. In order for that to happen, everybody has to end up with the final production transmission.
 
@TEG

I think there was a bit of confusion on this. we won't ship any cars without relaible, durable transmissions. The distinction is between the short term solution of a fixed second gear, which is easier to develop and test, but does not provide the performance spec we have set, and the final solution that we will continue to work on. Once we have a final solution to the issue we will provide a free upgrade to customers who have been delivered cars with the earlier transmissions so that their car meets the performance specs we have set.
 
TEG, I'm not 100% certain, but I believe that Elon was taking about only 20 cars or so that might need a transmission upgrade later. And each of the early customers would have the choice of either getting a temp. one or waiting for the final one. I think this is just an attempt to head off losing any of the early high profile celebrity buyers who might bail if they have to wait too long, which would look bad.
 
@dogtown
I have heard this arguement before but I am not sure how much more open do people want Tesla to be. I mean they have blogs already and they are willing to talk face to face with customers, which is more open then any other auto company I have seen. I don't see them closing up either in the recent months. You can't really expect daily updates from them. They likely will post updates when they reach a real milestone.
There has been such a negative air in the blogosphere around tesla lately, probably due to the personnel changes, but I don't see indication of them closing up.
@tonybelding
Did you get a chance to ask about Martin's departure? I don't really agree with the tranmission scheme either. I know they want the first cars out quickly, but delivering with a less than perfect transmission doesn't sound like a good move. It would be expensive to replace once it fails. I hope this only applies to Elon's car, which is already built anyways.
 
we won't ship any cars without relaible, durable transmissions.... the short term solution of a fixed second gear...

OK, there have been a number of prototypes driving around locked in 2nd gear for a while now. Without specifically saying (but dancing around it quite a bit) it sounds like the plans is to ship some initial production cars also locked in 2nd gear. (Am I correct about that or not?)

I can understand that approach, but then I wonder about this statement:

"A single-speed transmission wouldn't solve the problem. Some of the problems they've experienced are related to shifting, but many are not. Elon expressed frustration with durability problems, because these are things that only show up after driving the car a few thousand miles."

So, are the models locked in 2nd gear long term durable / reliable or not?
 
Then Someone Should have asked.

I disagree with you...

...Im the first to admit that there has been less communication in recent months and I'll take the blame for that, but we have had our hands full with leadership changes and a very intense focus on the issues at hand...

Thank you for the prompt response. I do not want to try and start a flame war and be viewed as a Troll. I sincerely hope that you are right and the company can over come these hurdles. I have misinterpreted the posts on this forum. I thought there were concerns about what could possible happen at the company, to cause the only founder who was fully focused on this company to be kicked out. I guess the question was just not asked in the open meeting with the entire executive team.
 
For reference, Martin responded about the town hall meeting over here.

martin said:
Town Hall impressions
I think the customer call went pretty well. The Tesla spokespeople did a good job of keeping the discussion focused on the Roadster and on Tesla's vision - rather than on the issues surrounding my departure.

Elon's only comment about my departure was benign, noting that my "personality and attitude" are better suited to running startup-phase companies than larger companies. Generally I agree with with this assessment, though as I have stated before, I would have been happy to have continued to contribute to the growth of Tesla Motors and the delivery of the Roadster in another capacity besides as CEO.

Congratulations to the Tesla team for creating a very positive event that addressed many of the open concerns especially surrounding the Roadster shipment delays. It was a very good idea to make the Tesla executive staff available to answer questions directly from customers at this time and in this way.

Still looking forward to my Roadster #2!"
 
Any specifics on that? Just locked in 2nd gear?
Or something like reduced eMotor torque? Lower redline?

I'm a bit fuzzy on it myself. At one point they seemed to be talking about something in the firmware that would reduce the peak torque, and at another time they seemed to be talking about locking it into 2nd gear. Or maybe both. Or maybe they haven't decided yet.

Any clarification from Tesla would be welcome.
 
tonybelding, thank you for posting your notes very informative.

My understanding is that they will deliver cars with a single speed "set up" to get cars on the road and being driven by customers. Tesla has realised that at this point, time is of the essence, the "transmission problem" and the "realibility problem" is being perceived as a "credibility problem" which goes beyond transmissions.

As they say "perception is reality" and the reality is that there are no cars on the road.

The line would be "If you don't want to wait, we will deliver a car with a single speed and at a later date replace the transmission and alter the software" of course this would be free to the customer.

They had 2 companies work on the transmission, and now they have another 2 companies that seem to have just started working on the transmission.

If you want a Tesla in a timely fashion, get a sinlge speed, get a free transmission upgrade, and get a break on the price in the process.
 
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Tony,

Thanks for the excellent notes. I can't add much to the technical discussion on the transmission, but from what I can tell, the fence-sitters, those that want a Roadster, may even be able to afford it, had better stand back for the time being. Maybe even weigh other EV options. I hope to hell Tesla figures it out and goes public doing so--and Martin has some sort of options. The now VERY speculative time frame is very close to the Volt's, and at 1/3 the price. That's sobering.