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Tesla investor: Detroit 3 have ‘lost the electric-car battle’



This news story was published on September 14, 2012.
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By Nathan Bomey, Detroit Free Press –

DETROIT — California startup Tesla Motors claims to be ahead of traditional automakers in the battle for electric-car supremacy, one of the company’s high-profile investors said Wednesday in an interview.

But the Palo Alto, Calif.-based company has only sold 100 cars so far this year and has cut in half its production target for the new Model S sports sedan, according to Wunderlich Securities analyst Theodore O’Neill.

Tim Draper, co-founder of $6 billion venture capital firm Draper Fisher Jurvetson, which has backed startups like SpaceX and Skype, said that Elon Musk’s Tesla has the resources to beat the Detroit Three.

“Oh, yeah,” Draper said Wednesday in an interview at the Techonomy conference at Wayne State University. “Don’t live in your reality distortion field here in Detroit. You’ve got to look at it and say, ‘Yeah we could do something here. We can innovate.’ ”

He added: “Create a flying car. Create something different, because you’ve lost the electric-car battle. See if you can win another.”

Tesla has said that in 2012 it expects to sell 5,000 of its new Model S pure-electric sedan at a price range of more than $50,000 to nearly $110,000. The company says it will sell about 15,000 in 2013, but analysts have expressed skepticism that orders will meet those targets.

Electric cars and partially electric vehicles haven’t yet achieved early sales projections. General Motors’ Chevrolet Volt hit a record month in August, but the company has offered discounted leases to juice sales and the vehicle will miss its original production targets for 2012. Still, GM has sold about 13,500 Volts so far this year, making it the most-popular vehicle with a large lithium-ion battery pack.

But Draper said the Detroit Three automakers are trailing Tesla on electric-vehicle technology.

“They have not innovated nearly enough in the auto industry here,” he said in an interview following his speech at the conference. “They really should wake up.”

Asked whether Draper Fisher Jurvetson would consider opening a venture capital office in Michigan, Draper said it’s possible.

“You know, I haven’t really thought about it,” he said. “It would be driven by the entrepreneurs I see here, and I’ve seen a few, but I haven’t seen too many.”

One of the region’s top assets, he said, is its “incredible education institutes.”

“So you do graduate some incredible people,” he said. “The question is: Do they want to stay? It would take a real innovative hero to say, ‘I’m going to stay in Detroit and I’m going to start a business, and since all those people are unemployed and all that real estate is so cheap, I think I’ve got a real edge.’ ”

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