Consumer Electronics Giant Apple of Tesla Chief’s Eye

DETROIT – Tesla Motors Inc. envisions a dealer network similar to Apple Inc.’s wildly successful but quirky retail outlets – all of which are company-owned and staffed by product specialists known as “geniuses.”

Tesla, the only maker of road-going, retail-market electric vehicles serving North America and Europe, will not sell dealer franchises, preferring to maintain a direct “connection” with its customers, says founder and CEO Elon Musk.

If Tesla stores were privately owned, “we (would) lose that,” he claims.

With a global network of less than a dozen stores, Tesla is a niche player. But among the some 1,200 consumers who have purchased the auto maker’s battery-powered roadsters, zeal runs high, Musk says.

“The customer feedback has been really positive, close to how Apple customers view their product,” Musk tells journalists during a visit here to accept the 2010 Automotive Executive of the Year Innovator Award from management consultancy DNV.

In the business world, Apple’s approach to developing customer relationships is almost unparalleled. “Apple does an amazing job,” says Mark Johnson, president and CEO of Loyalty 360, a Cincinnati-based customer-engagement think-tank.

“Its product specialists are very knowledgeable, which makes it easier to buy,” Johnson tells Ward’s in a phone interview.

Apple customers also are less likely to stray to competitive brands because its product specialists are so knowledgeable, “which makes it easier buy,” he adds.

Most importantly to a startup such as Tesla, the Apple model pays dividends. This week, the consumer electronics giant announced a net quarterly profit of $3.1 billion, nearly three times the $1.6 billion it earned in like-2009.

Tesla’s Elon Musk, winner of 2010 Automotive Executive of the Year Innovator Award.

Tesla also is targeting Apple’s hardware and personnel. Musk says the interior of the Model S sedan, due in 2012, will boast a 17-in. (43-cm) display screen three times brighter than the screen on Apple’s MacBook Pro laptop computer.

How is Tesla able to promise this? By hiring engineers away from Apple, Musk says to a round of laughter.

In addition to serving the car’s navigation system and other functions, the screen will provide a window for third-party applications, he confirms. Software will be Linux-based and compatible with Motorola’s Droid smartphone.

On the horizon for Tesla is a 4-wheel-drive utility vehicle based on the Model S platform. Though not confirmed, it could happen as early as 2013.

Musk’s rationale? While Tesla customers are environmentally aware, they have grown accustomed to the high seating position afforded by an SUV or cross/utility vehicle.

The arrival of the Model S will mark a hiatus for Tesla’s roadster offerings, as U.K.-based Lotus Cars is phasing out production of its Elise 2-seater.

“The (Tesla) chassis is a modified Elise,” Musk says. “It’s actually quite heavily modified.”

The Elise and the Tesla Roadster and Roadster S have just a 6% component overlap. Musk says, if he could turn the clock back and redesign Tesla’s cars, he would start “from a clean sheet.”

He likens the Elise chassis modification to a minor home renovation gone haywire. “And you end up spending more than if you just built the thing from scratch,” he says.

But the end of Elise production will not mean an immediate stop-sale for Tesla.

“We’re going to essentially build ahead in order to ensure we can supply vehicles in 2012,” Musk says. “That takes us right into the Model S and gives a break of a year or two before we come out with the next-generation Roadster.”

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