NEW YORK (TheStreet) -- We are now approximately 90 days or less away from the big launch ofthe Tesla (TSLA) Model S. This is no secret -- Tesla has saidfor a long time it expects to deliver its first Model S car byJuly, and everything seems to have progressed exactly on track.It is easy to get lost in the weeds in terms of the importance of the Tesla Model S being delivered to customers. There is a very important big-pictureview of how the world will view not only Tesla, but also the entireelectric car market as a whole, once the Model S gets into the handsof consumers.
Here is the point: 73 miles just isn't enough for comfort for mostpeople. While 73 miles is more than plenty for many people most ofthe time, most people need or want a car to be able to handleunforeseen situations. Sometimes you just need to go longer than youhad planned for your regular commute that day, and perhaps you don'thave time or ability to charge during the day. If 73 miles don't cut it, are you saying that 160 miles or 230 milesdo? In a word, yes. Or at least: Yes, I think so -- for many, manypeople. Not all, perhaps not even a majority -- but for many people.The bar of success for Tesla is not if it can get 50% of the carmarket -- 1% of the U.S. car market is 150,000 units, and Tesla isgunning for worldwide sales of 20,000 units with the Model S, plusanother 10,000 to 15,000 cars for the 2014 Model X. Totally achievable, inother words. It is true that the Nissan LEAF has become a hit among Silicon Valleyexecutives and engineers, mostly as a second, third, fourth or fifthcar in the household. If you have a set commute, or if youcan charge at work (which is common at Google, Apple, Facebook and soforth), you now have a very functional all-electric car that may lastlonger than your grandchildren will walk this Earth. All you have todo is to inflate your tires, and eventually change those tires, as well asthe brakes. There just isn't much maintenance beyond that. But ... the Nissan LEAF is not likely the car in which most people wantto be seen most of the time. The exterior is a bit weird, and theinterior is not luxurious. Remember, the buyers of these cars aremost likely those who would have spent $50,000 to $100,000 or more on a premium car. The LEAF is a fairly ordinary compact-to-almost mid-size car,that happens to be all-electric.
The Tesla Model S changes all of that. It is a sedan that competeswith Mercedes S550, BMW 750 and the like. It has cargo space vastlyexceeding any other sedan in the market today. It has superiortelematics compared to any other car too -- especially important amongSilicon Valley engineers.
2. General quality issues. Building a car is more than thepowertrain. The established car companies have had in some cases morethan a century of experience in endurance testing. Tesla must not getonly the powertrain and its revolutionary telematics system right --it must also get all the other "boring" details right in terms ofbuilding a car that will exude quality from Day 1 to . . . many decadesfrom now. Fortunately, this second risk is less severe in terms of what wouldhappen in the event of a failure, but it is nevertheless a source ofworry. The press will be watching the Model S real-world performancewith a hawk eye, and issues that would get no attention if theyhappened in a Ford, VW or Honda, will be all over the news ifdiscovered in a Tesla. Unfair, but true.