Tesla Motors: Roadster electric car costs more than twice as much as expected

Tesla Motors' Chairman Elon Mush admitted his firm has grossly underestimated how much it would cost to produce its all-electric Roadster car. The firm set the price of its roadster at $92,000, as it expected the production costs would be around $65,000, but then made the alarming discovery that the actual production cost would be around $140,000 - more than twice as much as the company had estimated.

Last year Tesla increased the price of its Roadster to $98,000 and then to $109,000, but even at these price points it's losing a substantial sum on each vehicle it is selling. The electric car maker says people who have placed a $50,000 deposit for a car - some as long ago as early 2007 - will still get their cars at the original price, but they will not get the high-speed charging cable and custom alloy wheels they thought they'd be getting. Both options will cost $3,000 each, and the high-speed charging cable is a necessary upgrade because otherwise it would take 37 hours to fully recharge a drained Tesla battery pack.

Mush said the changes would affect 400 customers who pre-ordered their cars and are scheduled to receive them between now and October. He also added Tesla Motors hopes to get the production cost down to about $80,000 a car by summer.

The company had expected production costs to be about $65,000 per car. Subsequent changes in manufacturing approaches, the car's drivetrain, heating and air conditioning system, wiring and even the supplier of body panels has helped lower costs tremendously, but each still costs Tesla "between $90,000 and $100,000" to build, Musk said.

Add overhead, including payroll, marketing and facilities costs and the auto maker still is losing a substantial sum on each vehicle it is selling, even with its price hikes last year to $98,000 and then $109,000.

To turn things around, Tesla recently told customers who have placed $50,000 deposits on cars - some as long ago as early 2007 for vehicles with a stated price of $92,000 - that they can still get their cars at the original price, but not with the high-speed charging cable and custom alloy wheels they thought they'd be getting.

A price hike for those items, he said, will help make the company profitable sooner - and showing that profitability is likely is a requirement for obtaining the $350 million in federal loans the company says it must have to proceed with its next venture, a battery-electric sedan expected to retail at just under $60,000.

More info at Green Car Advisor.