Bloomberg News

Tesla Model S Eyed as U.K. Government Scouts Green Cars

July 18, 2014

Tesla S

Tesla sold more then 25,000 of its electric Model S sedans through the end of 2013, and is aiming to deliver at least 35,000 this year. Photographer: Lam Yik Fei/Bloomberg

Tesla Motors Inc. (TSLA:US), a month after starting Model S deliveries in the U.K., said its flagship electric sedan is among the cars being considered for purchase by the government there to transport officials.

The Government Car Service that provides vehicles for U.K. ministers will make the initial purchases under a program to buy more than 150 ultra-low emission vehicles, the nation’s Department for Transport said yesterday in London. The government set aside 5 million pounds ($8.6 million) for the program, according to a release.

“The Model S we understand will be under evaluation for inclusion,” said Simon Sproule, Palo Alto, California-based Tesla’s spokesman. The sedan was among the cars on display at a press conference, and “it would be great to see California-built Teslas transporting Her Majesty’s ministers on official business across London,” said Sproule, who was born in the U.K.

The carmaker led by Elon Musk is accelerating overseas deliveries as part of a plan to boost production by more than 50 percent this year. Deliveries of right-hand-drive Teslas to the U.K., where the car is priced from 50,280 pounds, began in June and Musk inaugurated the start of shipments to China in April.

Customers in Hong Kong start getting cars next week, Sproule said. The company said this week that its third electric vehicle will be called the Model 3 and is due by 2017. The car is to have a range per charge of at least 200 miles (322 kilometers) and a base price about half that of Model S, which starts at about $71,000 in the U.S. The second addition to Tesla’s lineup, the Model X sport-utility vehicle, arrives in 2015.

‘Two Round Trips’

The prospect of sales to the government in the U.K., which already has consumer incentives for electric car purchases and is poised to install charging infrastructure, comes as China this week set a goal for electric cars to make up at least 30 percent of government vehicle purchases by 2016.

“London streets are cramped, you can’t go that fast and there are all sorts of limitations and fees for gasoline-powered vehicles, so there’s a logic to buying electric cars,” said Karl Brauer, senior industry analyst for Kelley Blue Book in Irvine, California. For Tesla, “it could have some halo effect for the brand if you see the cars used by the government,” he said.

The Model S, able to travel about 250 miles or more per charge, has the best range of any vehicle being considered by the U.K. program, Sproule said.

“It’s the only one that can make at least two round trips between 10 Downing Street and Chequers without recharging,” said Sproule, referring to the London residence and country retreat of U.K. Prime Minister David Cameron.

Separately, the company said yesterday it will release second-quarter results, including its revenue from initial sales in China and the U.K., on July 31 after the close of New York trading. Tesla rose 0.4 percent to $216.35 at 9:58 a.m. in New York. The shares had risen 43 percent this year through yesterday.

To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editors responsible for this story: Jamie Butters at jbutters@bloomberg.net Niamh Ring, Stephen West


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