Update on Production and Delivery of Cars to Customers

Ze'ev Drori, President and CEO, July 12, 2008

The following update was sent by Ze’ev Drori to Tesla customers yesterday.

You know of course the saying “Good things are worth waiting for” ... undoubtedly we were trying the truism of this adage longer than warranted, but we have broken the logjam. We are delivering the Roadster to our customers. Already 9 production Roadsters have arrived in California, another 3 arrive this weekend, and they will keep arriving at the rate of 4 per week (except for the scheduled factory shut down in the last two weeks of August). In fact, currently there are 27 Roadsters in various stages of assembly. In large measure we deliberately limit the production until we install our own born and bred final transmission by mid-September, at which time production will start to ramp up leading toward a monthly rate of over 100 cars in December.

From the start we planned a slow production rate for the first several months to allow us time to work out the kinks of production prior to increasing the rate of production. As mentioned above, an important mile marker of our progress is the development and implementation of Powertrain 1.5, which is going smoothly. Already we have prototypes running with the Powertrain 1.5 configuration and we are establishing the manufacturing facility for the gearboxes in our own facilities. The performance of this production configuration is extraordinary.

The Roadster delivery to our customers perfectly dovetails with the Grand Opening of our second Tesla store in as many months. The first was the one in Los Angeles and it’s a huge success, and now the one in the heart of Silicon Valley right near Stanford in Menlo Park. The store in Menlo Park replicates the unique customer experience so successfully present in the LA store and more, since in addition to sales and service it is the place where all final assembly, tests and preparations are made with each car prior to customers’ delivery. We are pushing forward with planning for our next stores in New York, Chicago, Miami and Seattle.

In other news, I have hired Mike Donoughe, an accomplished auto industry executive, as our Executive Vice President of Vehicle Engineering and Manufacturing. Mike spent over 24 years at Chrysler, where most recently, as Vice President of “Project D”, he had been tapped to lead their critical redesign of their mid-size vehicle program. Mike’s addition is an example of my commitment to build a world class team at Tesla, combining the best of what Silicon Valley and Detroit have to offer, to build this company into the next great car company. Keep an eye out for additional news on this front.

On behalf of Tesla employees world wide I would like to thank all of our loyal customers and assure you that we do our utmost to justify the faith that you have shown.

Ze’ev Drori
President & CEO
Tesla Motors

Roadsters in final assembly at Tesla Store Menlo Park