27th July, 2015 · Technology

How Bright is the Future for Electric
Cars?

6 minutes to read

There’s been a lot of discussion about electric vehicles (EVs) and it often seems to be focused on the negative; range anxiety, slow sales growth, battery reliability and the overzealous predictions of its future by some economists, political leaders and forecasters.
But according to Heath Walker, the Marketing and Communications Manager for Tesla Motors Australia, the future is bright for electric cars and you only need to take a look at the tech to see why.

CB: Do you think the sales expectations of EVs have been hyped up too much?
HW: No I don’t think so. I think certainly the media have reported that there are some hurdles associated with electric vehicles. We don’t actually report on sales figures as other companies do, but we are very excited about the response we’ve had in Australia to date and moving forward.
What that reflects is the investment we’ve made in infrastructure. We’ve now got three stores in place and we’re building a super charger network as well. We’ve got one super charger out the front here in Melbourne, and then we’ve got two in Sydney. By the end of 2016 we’ve committed to go to Brisbane and just north of Brisbane, which means that we’ll have connected all major cities on the east coast by the end of 2016.

CB: How would you describe the internal culture at Tesla?
HW: It’s great. The one thing that probably sums it up is we operate a bit like a start-up, and even though we’re the size we are globally now we still have the flexibility, the lack of bureaucracy. We want to remain flexible and always customer-first. So everything that we do we think about our owners before making any decision.

CB: How have people reacted to the opening of your Richmond location?
HW: It’s been an exciting time for us. Our owners now have a location where they can charge and also have their cars serviced.
From a store point of view we’ve not got a physical location. We’re out at Chadstone (Melbourne), but we’re in a display area really. It’s nice to be able to introduce people to the vehicle at Chadstone, but then for a more one-on-one and better service provision, we’re able to bring them [to Richmond] and give them greater time allocation. We’re running test drives from both locations and the owner response has been great.

CB: Why is the traditional dealership model wrong for Tesla?
HW: I think there are just barriers to selling an electric vehicle. We’ve built a car from the ground up. Traditional Dealers are trained in certain benefits of an internal combustion engine. We have to flip that on its head and show the benefits of owning an electric car of which there’s multitudes. The convenience factor alone is a huge one, and I think being able to train staff up and have them deliver exactly what you need said is important. Overcoming preconceived barriers is key for us. We also have a mentality of ‘customer first’, and a single customer view.  We want to know what’s happening with that customer throughout their whole journey. So when you come into a store we provide you with a product specialist. They take you through the car and educate you on the car. They hand you over to an owner adviser who then explains what it’s like to own the vehicle and take you on a test drive. We then transition you (if you purchase the vehicle) to a delivery specialist. They meet with you for coffee, a bit like a friend from the store who updates you on what’s happening with your vehicle prior to delivery, and then walks you through the delivery process once you take the car. And then finally we hand over to the service team who essentially become your key contact during ownership. If there’s ever an issue with the car they’re able to assist you with it, and are there when you want to take your annual service, should you choose to take one. By owning this process we can ensure that each part is delivered at its optimum level, and I think with a dealership model that can be broken at any stage.

CB: Did you look at the traditional dealership model before you embarked on selling your vehicles?
HW:  In the US they did look at that model and saw so many hurdles associated with it. We wanted to provide a unique experience. We think of ourselves as a tech company first and an auto company second. Our biggest hurdle is getting enough cars made to pull the wait time down, but it’s also all customised, which is why we offer the online component as well. So we can educate in-store, but because there’s no commission set through a third party we don’t have to pressure someone into making a decision on the showroom floor. We can allow them to go home, sit on their couch and go through the process of ordering on their computer and ultimately make a comfortable decision in their own home.

CB: What’s the first thing a potential customer says when they walk into your store?
HW: It’s usually one of three things. They usually say ‘how much?’ And then ‘how far’ and ‘how do I charge it?’

CB: Do you think the Australian Government or the State Governments should be subsidising EV buyers?
HW: Definitely. If they want this technology to be taken up in the short term, it’s been proven that subsidies assist that. All you need to do is look at countries like Norway which tax petrol cars and subsidise electric vehicles. In fact, the Model S has been the number one selling car there for months on end, and then you look at a place like California. It’s incredible to see the uptake of electric vehicles based on the subsidies, but also the benefits. It doesn’t always have to be monetary. There’s some easy wins that state governments can do to assist, because a lot of the rebates would have to be either high-end state or Federal based, but there’s things such as reduction of tolls [for EV Drivers], use of the transit lanes and parking infrastructure so that low impact cars can park closer to the store fronts.

Tesla S 'Skateboard' rolling chassis with integrated battery pack

Tesla S ‘Skateboard’ rolling chassis with integrated battery pack

Tesla Model S premium performance AWD sedan
Tesla Model S premium performance AWD sedan

CB: Your typical customer wants…?
HW: Performance, surprisingly, is probably the highest driver for coming into the showroom. Second is technology, and I’m not talking just about technology in the car but the way it drives and handles. The reviews have been very favourable to date, and the last is the EV credentials. So the ability to drive a car and feel good about yourself when you drive it because it’s better on the environment, especially if you’re using green energy or solar when you’re charging up at home. In terms of an audience, we’re getting an older audience, pre-retiree.  So those that are still working, but probably want to spoil themselves one last time before they retire and still have a car that has the ability to fulfil their everyday needs, whilst having a bit of a sports car to the side.

CB: Male or female?
HW: We’re heavily skewed towards males at the moment, and I don’t think it’s due to disinterest in the vehicle from females. It’s just due to knowledge, and that’s where my role comes in. I’ve got to create a greater awareness of what Tesla is and what Model S is.

CB: When the customer takes a Tesla for a test drive, what’s their first impression?  
HW: We have this thing called the ‘Tesla grin’, and that’s usually what occurs.

CB: Is it costly to install a charging station in my home?
HW: No, what we do is provide the wall unit at no cost and then the install can vary depending on your electrical setup – on average it would cost around $1000.

CB: Can a qualified electrician set the whole thing up?
HW: Any electrician can do it, and if someone doesn’t have a local electrician that they know or trust we can put them in touch with someone in their area.

CB: The lifespan of a Tesla battery?
HW: We’ve got an eight year warranty on the battery and drive train – unlimited kilometres.  We say after around eight to 10 years if you treated the battery as poorly as you could possibly treat it, you’d be looking at around 70 to 75 per cent capacity still left in the battery after that lifetime. So that’s 25 to 30 per cent degradation on a battery. So again one of the hurdles that we face is education. We get asked how much it is to replace a battery. We don’t like to give that figure out for two reasons. One, it’s under warranty for eight years so you don’t need to worry about it. And secondly in eight years’ time battery technology is going to change so much and the efficiency of cost is going to come down so much that we’ll be talking about a completely different figure.

CB: Finally, describe Elon Musk in three words
HW: Inspiring, clever and innovative