Going Green - Tesla Motor Sports

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| Favorite Color: “Going Green” | | | Rashanna Etenburn | BUSI 510 – Managerial Economics | | Executive Summary Tesla Motors is among the top 25 companies “going green” for our economy. Tesla motors is a venture aimed at proving that cars can be environmentally friendly, without giving up the speed and power, purchasers love. The cost of running this amazing, green driving machine is a mere 2 cents per mile. (Ryan, 2008) Tesla Motors is a company looking to produce a high-performance electric sports car, and is backed by a number of high-profile investors. Introduced in June 2006 to the public complete with a test drive by California Governor Arnold Schwarzenegger, the Tesla Roadster is able to go from 0 to 60 in 4…show more content…
In particular, the report scrutinized the $7,500 tax credit that the government is now offering to consumers who purchase plug-in hybrids like Chevrolet’s Volt or all-electric vehicles like Nissan’s Leaf. This credit, the CBO estimate, will cost $2 billion between 2009 and 2019. In the short term, this credit is unlikely to make electric cars affordable, the report argues. Even with the tax break, an average plug-in hybrid would still cost roughly $4,000 more over its lifespan than a conventional vehicle of similar size and performance, assuming that gasoline prices continue to average around $3.60 per gallon (an assumption that might be wrong). In other words, the tax credit would have to be much bigger to make electric vehicles competitive. That’s one reason why CBO only seems to be expecting around 270,000 or so electric vehicles to get sold over the next seven years—far below President Obama’s goal of putting one million electric vehicles on the road by 2015. Still, the report notes, those sales figures could very well go up if either the cost of gasoline goes higher or the price of electricity goes down. (Alternatively, the cost of batteries might also plunge—a recent report from McKinsey & Company predicted that lithium-ion battery prices could fall by as much as two-thirds this decade, giving a major boost to the industry.) What’s more, for the next several years at least, the electric-vehicle tax credit will have “little or no impact” on America’s

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