Tesla's Founder is VW's Secret Weapon in the Plans to Beat Toyota

Filed under: Green, Motor City Blogman, Volkswagen

You know the name Elon Musk. He's the PayPal founder who has procured some $550 million in federal funds and has raised some $226 million more in Tesla Motors' initial public offering. He's planning to build the $60,000 luxury electric-powered Model S sedan from scratch in Toyota-GM's old NUMMI plant while providing Daimler's smart with electric powerplants. And now, he's teaming up with Toyota to build electric RAV4s.


You may also know the name Martin Eberhard.

A couple of years ago, Musk forced Eberhard out as CEO of Tesla Motors. The two engaged in a litigious argument over who could claim to be Tesla's founder. They mediated out of court, and Musk issued a statement that Eberhard was "indispensible" in Tesla's formative years. Eberhard is a self-described longtime champion of "consumer" cell batteries, the 18650 version of the lithium-ion batteries used in the laptop I'm using to write this.

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At its Electronics Research Laboratory (ERL) in Palo Alto, California, VW Group CEO Martin Winterkorn said Monday that the automaker plans an electric-powered Golf and an electric-powered Up-type car to be ready for the market by calendar 2012.

"One of the two will be the first all-electric VW in the U.S.," Winterkorn said. The VW e-Golf currently under development has a 26.5 killowatt-hour battery pack with a 100-mile range, though like its competitors, Volkswagen is working to keep up with rapidly improving battery technology and to take advantage of rapidly falling costs.

As a result of the Tesla mediation, VW proudly introduces Eberhard as "founder of Tesla Motors." Eighteen months ago, he quietly became electric vehicle engineering director at VW's ERL in Palo Alto. Eberhard says VW will have working prototypes of electric cars on the road this year. Has he sold VW on consumer cells, like those used in the Lotus-bodied Tesla Roadster?

"They're coming around," Eberhard says.

VW has set a lot of hard-to-reach goals for 2018. Three percent of the vehicles it sells by then will be electric-powered, and while that doesn't sound like much, that's 300,000 worldwide. (Eberhard hopes electrics will make up the vast majority of the market in 20 years.) And in '18, VW plans to sell 800,000 Volkswagens, plus 200,000 Audis in North America. Those numbers will help VW Group pass Toyota to become the world's largest automaker.

It shouldn't come as a surprise that VW sees its ERL as the perfect place to develop electric car technology. Palo Alto is far from the old-tech automotive engineering centers of Detroit, Tokyo and Wolfsburg, Germany, where engineers don't feel confined by longstanding engineering "rules."

Their legal squabble reportedly began after Musk questioned then-Tesla CEO Eberhard's costs estimates for the Roadster model. This won't be an issue for Eberhard at VW, which benefits from the cost efficiencies of being a full-line automaker while its bean counters can perform the task of realistically estimating the costs of pretty much any new technology.

I don't know who told Musk he could sell a $60,000 luxury electric-powered sedan at a profit, but Musk might think about a new round of firings. Leading up to his company's IPO, Musk has insisted Tesla Motors will remain independent. His deals with Daimler and Toyota should help mitigate the big dose of reality he must be facing with the ambitious Model S.

This all sets up a fascinating battle for the rest of the decade: Tesla principle + Toyota vs. Tesla founder + VW.

Read more: http://blogs.motortrend.com/6670742/green/teslas-founder-is-vws-secret-weapon-in-the-plans-to-beat-toyota/index.html#ixzz0uTO8cVLq