Elon Musk Says Established Manufacturers Should Speed Up Efforts on EVs

Doug Field never considered leaving Apple. From the summer of 2008 to the fall of 2013, Field, a former chief technology officer for Segway and development engineer for Ford, oversaw product and hardware design, working on the MacBook Air, MacBook Pro, and the iMac. He earned a generous salary and was excited by the work. Then Elon Musk and Tesla Motors came calling, and Field agreed to become vice president of its vehicle program.

In the October 2013 announcement of his hiring, Field said joining Tesla was “an opportunity for me and many others to pursue the dream of building the best cars in the world—while being part of one of the most innovative companies in Silicon Valley.”

He likely won’t be the last Apple executive poached by Tesla. The company has hired at least 150 former Apple employees, more than from any other company, even carmakers. The former Apple staffers work in many areas of the 6,000-employee automaker, including engineering and law. “From a design philosophy, [Apple] is relatively closely aligned,” says Musk, Tesla’s co-founder and chief executive officer. Apple declined to comment for this story.

As cars become more like computers, and traditional U.S. automakers struggle to attract Silicon Valley talent, Tesla’s ability to lure people from Apple gives it an edge in developing cars of the future. “It’s almost an unfair advantage,” says Adam Jonas, an auto industry analyst at Morgan Stanley. “As software goes from 10 percent of the value of the car to 60 over 10 years, that disadvantage [for traditional carmakers] will intensify.”

Employees who have worked at Apple say their decision to join Tesla was based on its cars and its CEO. Musk has a reputation, like Steve Jobs did, for a mercurial temper and an obsessive attention to detail. A former Tesla worker who didn’t want to be named says that Musk is enamored with Apple and relishes comparisons between himself and its co-founder. Tesla, says one Silicon Valley recruiter who asked not to be named, attracts the same kind of employees that Apple does—driven, hard-charging, and drawn to a strong leader.

Apple’s influence at Tesla is apparent in the Model S full-size sedan, which went on sale in 2012. The luxury electric car, priced from about $70,000, has a 17-inch touchscreen that controls most functions, from opening the panoramic roof to turning on the air conditioning, and has Internet access. As with an iPhone or an iPad, Tesla’s operating system gets frequent wireless updates.

Brennan Boblett, a former Apple designer, developed the car’s control screen with a team of Apple alumni, including Joe Nuxoll, a freelance design consultant who’s worked at both companies. “You try to design it so that it requires not a whole lot of thinking,” Nuxoll says. “It’s more like an iPhone than a Ford.”

One of Tesla’s first employees from Apple was George Blankenship, who made the leap in 2010 after helping to create the company’s retail stores. Musk hired him to do the same for Tesla. “Everything Tesla did was unique for the auto industry,” says Blankenship, who made $1.2 million in 2012, according to a Tesla proxy statement. He left Tesla the next year. “If you go back to Apple 15 years ago whenever I started there, basically everything we did there was counter to the industry as well,” he says.

According to LinkedIn profiles, former Apple employees at Tesla now include: Rich Heley who joined Tesla in 2013 as senior director for manufacturing technology and is now vice president for product excellence; Lynn Miller, hired last year as associate general counsel; Beth Loeb Davies, director of training programs since May 2011; and Nick Kalayjian, a director of power electronics who has been awarded several patents for his work at Tesla, which he joined in 2006.

“Elon has explained to me that it’s easy for him to hire someone from Apple, because when he does the interview process for a serious software engineer—a big human asset—he’ll meet with the person and geek out with them,” says Morgan Stanley’s Jonas. “They’ll like talk about nerd software coding stuff.”

Beyond design, Apple’s influence is evident in Tesla stores and how the company operates other aspects of its business. When it wanted to build a giant battery factory, it considered following Apple to Mesa, Ariz., where the computer company purchased a factory in 2013. Tesla executives met with city leaders to explore the incentives available to them before deciding the company would build elsewhere. “A lot of their executives and people had come from Apple, so they were very much aware of us,” Christopher Brady, Mesa city manager, said in an interview last year. “When they sat down with us, we started talking about how we had done things with Apple, and they said, ‘You don’t have to explain that to us. We already know about the Apple story.’ ”

Automakers from around the world are rushing to set up offices in the Bay Area to tap the engineering talent. “When you talk to people in Silicon Valley, there’s a totally different mindset. They look at Detroit as old,” says Dave Sullivan, an automotive analyst for research firm AutoPacific. “You don’t see that same innovation.”

Sullivan says he doesn’t know of any former Apple employees at traditional automakers he regularly deals with. When Ford opened a Silicon Valley office in January, it highlighted the hiring of a midlevel engineer from Apple in a news release to raise its profile in Silicon Valley.

Musk says Apple has been trying to poach Tesla employees, too, offering $250,000 signing bonuses and 60 percent salary increases. “Apple tries very hard to recruit from Tesla,” he says. “But so far they’ve actually recruited very few people.”

The bottom line: Tesla’s ability to lure talent from Apple could give it an edge as cars become more like computers.

There's been some debate about how Tesla is really doing in China - a cornerstone market for the California company - and whether media stories about troubles there are overblowing the situation. Just last July it was breaking quarterly records with the help of 1,000 sales in China and we called the momentum "gangbusters." Then the news trend went the opposite direction for the rest of the year, with the company's two top managers resigning and a constant rill of speculative articles laying out the various issues Tesla was having there and why it's switching up its disclosures.

Well, the issue might be overblown, but there is definitely something brewing in China. Reuters was shown a transcript of an e-mail Elon Musk sent to regional managers at the end of January after they sold 120 cars for the month. Those 120 sales were on the heels of "unexpectedly weak" sales in Q4 last year, when Musk said the China situation would "be in pretty good shape probably in the middle of" 2015. In the missive he said managers could be fired or demoted if they can't show that they're "on a clear path to positive long-term cash flow." He also wrote that that specialized roles and any personnel outside of vehicle production would need to be justified because, "There is no way that we can afford to subsidize a region of any size in the long term without causing serious harm to the company."

In 2013, when Tesla was ramping up for sales in China, Musk predicted that market would be about on par with the US by this year; Tesla sold almost 19,000 cars in the US last year, and a 120-unit January won't get China anywhere near those numbers. We're sure there'll be a lot of questions about the e-mail, the Chinese market, and Tesla's projections when the company holds a conference call for analysts after presenting its 2014 results later today.

Tesla's Dual Motor Model S is a categorical improvement on conventional all-wheel drive systems.

Conventional all-wheel drive cars employ complex mechanical linkages to distribute power from a single engine to all four wheels. This sacrifices efficiency in favor of all weather traction. In contrast, each Model S motor is lighter, smaller and more efficient than its rear wheel drive counterpart, providing both improved range and faster acceleration.

CNBC's Jim Cramer was not impressed with the earnings conference call Tesla hosted last week to explain its 2014 fourth-quarter and annual results, calling CEO Elon Musk's reasons for the company's performance "horrendous," "ridiculous," "a fiasco," and reminiscent of "the rambling John DeLorean."

Musk said Tesla met its production target of 35,000 Model S units for the year, but missed out on getting something like 1,400 of those vehicles into customers' hands because of the weather, problems with "actual" ships, and customers being on vacation. Revenue rose to $956.7 million for the year, but the company posted a loss of more than $107 million for the quarter.

Tesla saw its third Chinese executive in a year resigned from the company this month, when its VP of communications and chief marketing officer departed. Musk argued that problems in China are "overblown." Part of the trouble in China, Musk argued, has been that the Tesla sales team has been telling customers it's difficult to charge the cars. And the company also dropped two bombshells: Telsa has planned to spend $1.5 billion on capital expenditures planned this year, without borrowing, a statement that a Morgan Stanley analyst called hitting the "insane button." And Musk said Tesla will have a higher market cap than Apple in ten years. Right now, Apple's market cap exceeds $700 billion, Tesla's is about $27 billion; Musk's plan would need 50-percent annual revenue growth for a decade, depending on who you believe.

Cramer, who rarely minces words on anything, thinks that's all just plain insane, writing that Musk's explanations "hang himself" and remind him of John DeLorean. Cramer said he loves the car, but he's frustrated with what he calls a "cult stock," which "can't be valued by traditional metrics." It's a sentiment that Musk is in no hurry to change, but he doesn't need to as long as he backs up his braggadocio.

"At the time these laws were passed many decades ago, the car dealers argued that manufacturers should not be allowed to compete directly with their own franchised dealers, since they might then be able unfairly to undercut their dealers on price," Tuesday's letter reads. "However valid these concerns may or may not have been at a time when the 'Big Three' manufacturers dominated the market, it is important that the law keep up with the changes that have occurred in the automobile market today."

When Elon Musk is not amused by electric vehicles sporting other badges than Tesla’s, his attention is directed at hydrogen fuel cell cars.

Tesla Motors’ founder was recently asked for an opinion on hydrogen-powered fuel cell vehicles, and his response was not surprising for those who know how Musk works.

Simply put, the billionaire believes that hydrogen fuel cell technology used for powering cars is “extremely silly.” He made the remarks at the Automotive News World Congress in Detroit in January, when a reporter asked him why he was so critical of hydrogen fuel cell vehicles.

“I don’t want to turn this into a debate, but I think they are extremely silly,” Musk said. “It’s just very difficult to make hydrogen, to store and use it in a car. Hydrogen is an energy-storage mechanism; it is not a source of energy,” he added.

Musk also said fuel cells are half as efficient as batteries, while hydrogen gas is a pernicious molecule and extremely flammable. He said the market will prove his point in coming years.

“It will all become apparent in the next few years. There is no reason for us to have this debate. It will become super obvious as time goes by,” Musk said. You can watch his entire statement on fuel cell cars in the video posted below, starting with the 10:30 minute mark.

Model S 85D currently has 270-mile range

Tesla Motors CEO Elon Musk has announced through Twitter the Model S is about to get a software update which will "end range anxiety."

Towards the end of January we heard Elon Musk saying the Model S P85D will get a software tweak shaving 0.1s from the 0-60 mph (0-96 km/h) sprint to just 3.1 seconds. Now, another post on Twitter says that next Thursday a conference will be held about an over-the-air software update for the entire Model S range which he promises is going to "end range anxiety."

We remind you the standard Tesla Model S which comes with a 60 kWh battery has an EPA-certified range of 208 mile (335 km) range, while the 85 kWh battery version will do 265 miles (426 km) before running out of juice. Up next is the 85D dual motor variant which has the same 85 kWh battery but can provide a maximum range of 270 miles (434.5 km). The aforementioned P85D focuses more on performance so it has a slightly lower range of 253 miles (407 km).

Musk said Tesla met its production target of 35,000 Model S units for the year, but missed out on getting something like 1,400 of those vehicles into customers' hands because of the weather, problems with "actual" ships, and customers being on vacation. Revenue rose to $956.7 million for the year, but the company posted a loss of more than $107 million for the quarter.

I’m sure you’ve seen and heard more than enough of the Tesla Model S, but the following review from XCar does a great job of summing up the car.

Due to its driving range, practicality, performance and styling, Alex Goy sees the Model S as the best electric vehicle on the market.

The car’s “Achilles' heel” according to XCar is the ride comfort. The Tesla Model S feels quite harsh for a car in this class, with every bump in the road being felt by passengers. There’s also the steep price – a base Tesla Model S costs £49,900 in the UK. But where the Model S compensates is in annual costs, which are only a quarter those of a conventional car.

One thing is certain, though: the Tesla Model S has put electric vehicles back on the map, and hopefully things can only get better from here. Scroll down to watch the review.