Tesla Cars on Sale for Half the Price

PALO ALTO, Calif. (TheStreet) -- You know who you are: There are 12,200 of you who have put down deposits ranging from $5,000 to $40,000 for the new Tesla (TSLA) Model S electric supercar. Only 10 of you have actually taken delivery.

The price that most people pay for the first 1,000 units of the ModelS is around $100,000, or $90,000 after tax incentives. What if I toldyou that you could get a Tesla almost right away for half the price,instead of waiting as long as nine months?

It's true. Yes, there are some caveats, and I'll get to them insome detail, but here is the background: Two years ago, Toyota ( TM) hadinvested in Tesla, and the companies agreed to jointly develop a Toyota-brandedall-electric car with Tesla's signature battery and electric motor,among other components.

For the body, they chose the small SUV called the Toyota RAV4, whichis everywhere on U.S. roads. The fruition of this conversion will be hitting the dealerships a month from now, and the price is $50,000 before tax adjustments, so $40,000 after, in California.

Speaking of California: The only place it will be sold is inthat state's four major cities. That's the biggestcaveat. The second caveat: Toyota and Tesla are committing tobuild only 2,600 units, compared with Tesla's 12,200 for the Model S.

Starting in a couple of weeks, you will be able to place an order forthe Tesla-based Toyota RAV4 Electric, pay $50,000, take delivery ofthe car in California by September, and then get a $10,000 tax credit.If you were waiting for a Tesla Model S and prepared to pay twice as much -- and you didn't know whether toexpect the car in September 2012 or in May 2013 -- this can be aterrific deal for you.

I got the chance to drive the Tesla-based Toyota a few days ago, tothe tune of 60 or so miles for a couple of hours. If you have alreadydriven another Tesla, a Chevrolet Volt or any of the other excellentpowerful electric cars, you should be able to guess whatto expect once you have read the specifications of this uniquevehicle.

The body of the RAV4 has undergone aerodynamicimprovements on every side, forming the most aerodynamically efficient SUV on the market today. Under the skin,the regular gasoline engine with its muffler, gasoline tank and othergazillion components have given way to Tesla's key streamlinedelectric car modules.

The battery has a usable capacity of 41.8 kWh, although the totalcapacity is greater -- and unspecified -- but the "standard" mode ofcharging will fill it to only 35 kWh, because that lengthens the life of the battery. The warranty is 8 years and 100,000 miles.

The electric motor and its related components sit up front, same as where the gasoline engine usually is. In other words, it's basicallya regular Tesla, except this one is front-wheel drive. Thebattery looks like a gigantic 800-pound iPad and sits in the floor ofthe car, which makes for a zero-compromise interior with lots of spacefor people and their luggage.

The interior is basic cloth and cheap mouse-gray plastic. By no means is this a premium car. The electronics in and around the center stack are similar to other premium electric cars, however, such as the Chevrolet Volt.

The basic ergonomics of the Tesla-based Toyota are straightforward in agood way. You step into the car very comfortably, and you can startdriving it without any tutorial. I really don't think you even needto know that it's an electric car -- just press the start button andgo. And go it does!

Performance: It's mostly about driving range.

In a pure electric car, what most people want to know is the range.On a 35 kWh charge, the EPA certification looks to be 92 miles onaverage. On a 41.8 kWh charge, it would be 113 miles. I drove thecar aggressively with modest A/C and it looked like the carwould be able to go at least around 100 miles if I had driven it toempty.

The theoretical maximum range is 170 miles. I suppose most peoplewill have no problem clearing 110 miles in most of California, unlessthey drive very fast on the freeway. The topspeed is limited to 100 miles per hour.

As for acceleration, it's quick. Zero to 60 mph comes up in 6.9 seconds, and I found that the limiting factor was the economy-orientedwheels. This is no Chevy Corvette or Volt, which has relatively fatlow-profile sports wheels. I tore up the asphalt, leaving long tiremarks, and embarrassed a variety of exotic European sports cars.

To say that this car is fun is an understatement: Comparing thedrivetrain of any other SUV to this Tesla-based SUV is like comparinga 12-year-old Motorola Razr flip-phone to an iPhone 4S. Everythingelse in the market feels distinctly Neanderthal in comparison.

As with the other premium electric cars, the Tesla-based Toyota makeswild acceleration into an undramatic event. There is no downshift, noembarrassing noise, and no shakes or rattles. It's just a totallysilent "Andre the Giant's hand" lunging your car forward with afeeling you simply cannot translate into words. You have toexperience it in the driver's seat. The Jetsons Age has arrived.

Handling-wise, the Tesla-based Toyota is limited, again, by the cheapwheels. This is no Chevrolet Volt in that regard. That said, thecenter of gravity is low thanks to the battery built into the floorpan.

One interesting anecdote is that Toyota, in attempting to perform thegovernment's mandatory roll-over crash test, was unable to get thisSUV to roll using the government's prescribed method. Its centerof gravity is so low, it just wouldn't tip. This means the caution you feel while sitting so high up, and taking turnswhile riding on relatively squeaky tires, is, in the end, fundamentallyunwarranted.

Unlike Tesla's Model S, the Toyota version uses a standards-basedcharging interface, so that you can use almost all electric carchargers without an annoying adapter. Toyota uses Tesla's 10 kWhon-board charger, so you can fill up large giant battery from zero in sixhours or less, depending on amperage and climate. That's 50% fasterthan a Ford Focus and three times faster than a Chevy Volt or Nissan LEAF, ona per-hour basis.

You, future Tesla owner, it's decision time.

So let's say you have a deposit on the Tesla Model S -- and you livein California -- should you move fast and try to switch your place inline for one of the 2,600 Toyota RAV4 Electric SUVs before they'regobbled up? The answer is not easy, but here are the factors:

1. Price: The Toyota version will cost you $40,000 net, and theModel S, depending on which version you buy, will cost you anywherefrom $47,500 to over $90,000 net.

2. Range: The Toyota version of the Tesla comes only with a 41.8 kWhbattery capacity, whereas Tesla's Model S also comes in 60 and 85 kWhcapacities. So while the Toyota version will give you a range ofaround 100 miles (conservatively), the Model S will give you optionsall the way up to 265 miles. That's a big difference.

3. Body: The Toyota is a conventional small SUV,whereas the Model S is a unique hatchback in that it also has anextra luggage space in the front. The Toyota has a roomier and muchmore comfortable back seat.

4. Handling: The Model S has an even lower center of gravity, andthe tires are meant for aggressive cornering. Simply put, the Model Stranslates the awesome electric motor's massive power to the grounddramatically better than the Toyota.

5. Luxury factor: The Model S has unique styling, inside and out.On the inside, leather and other materials vastly outperform thebudget look of the Toyota. On top of that, the centerpiece ofthe Model S's interior is the industry-first high-resolution 17-inchdisplay.

6. Practicality: It's easier to get in and out of the Toyota, and the inherent SUV design means it's less fragile to a lotof real-world events, inside and out. Also, if you are planning oncharging at public stations, the Toyota version wins outbecause of its standard port.

What's the bottom line? Given the net worth and income of a typicalTesla buyer, this gets tricky. Why? Well, just buy bothof them. You probably already have a couple of cars, and if you'rewriting one $100,000 check, just write another $50,000 check.Compromise is for losers!

For those of you closer to reality, the Toyota version of the Teslagives you a unique car in the market, essentially rightnow as opposed to many months into the future. The SUV body is "just right" in size and practicality, andthe standard charger means it will be easier for you to fill upthat battery when you are out and about.

California may be teetering on bankruptcy and drowning in red tape,but despite these calamities, the good weather and this Tesla-basedToyota prove that some things remain unique benefits for those whostill haven't fled California's record-high unemployment in favor of Texas prosperity. I give the Toyota RAV4 Electric, made by Tesla,a superb 9 out of 10 rating. Nab one quickly before the 2,600 units are soldout.

At the time of submitting this article, the author was long TSLA andAAPL. Additional disclosure: Toyota provided airfare, lodging andmeals to attend the engineering presentations and test drive of thiscar.

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