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Foolishness Or Faith?: 3,000 Buyers Pay $5,000 For Model S Reservation

Foolishness Or Faith?: 3,000 Buyers Pay $5,000 For Model S Reservation

Nelson Ireson

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2012 Tesla Model S

HI-RES GALLERY: 2012 Tesla Model S

Raising capital to help pay for the development of a future vehicle is not a bad idea, and Tesla appears to be pulling it off well, generating 3,000 reservations for the planned 2012 Model S sedan at $5,000 a pop. That's $15 million. But are those early adopters being foolish?

Perhaps they just have faith that the Model S will actually be built. Given Tesla's lack of profitability and the heavy R&D costs that come with any attempt to build road-legal vehicles in the U.S.--let alone all-electric vehicles--that's a fairly big leap. The Roadster, for example, has seen just 1,400 examples delivered to customers since its introduction in 2008. How long will it take Tesla to build 3,000 Model S sedans?

Considering it doesn't even plan to start series production and delivery until 2012, quite some time. On the other hand, partnerships with Toyota and Daimler lend the EV startup a definite sense of credibility and solidity in what is otherwise a quicksand-like marketplace.

The temptation that is the Model S is easy enough to understand: incredibly stylish, promising a range of adequate-to-impressive model variants and Tesla's trademark high performance, it's just about everything a person could want in an EV--and priced from around $50,000. That's a heady mix, and possibly enough of a reward to justify the risk.

So what's your verdict? Is a $5,000 reservation fee a foolish waste or a gesture of faith in what promises to be one of the most interesting cars on the road? If you'd like more background and analysis before offering your take, check out John Voelcker's thoughtful and thorough report on the status of Tesla and its Model S at GreenCarReports.

[USA Today]