Even before the Tesla gets delivered to its first owner, the very notion of this electric-car start-up – its greenness, its technological promise, its Silicon Valley roots – already has the eyes and ears of politicians in Washington and Sacramento.
The company says it will deliver its first electric car, a two-seat Roadster that costs about $100,000, to customers later this year. For the past year, the company has been showing off prototypes of the Tesla Roadster to politicians and policy-makers, including Secretary of State Condoleezza Rice and Gov. Arnold Schwarzenegger, either at its San Carlos headquarters or on road trips to Washington and Sacramento.
The man who has helped open doors for Tesla has inside-the-Beltway knowledge: Diarmuid O’Connell, Tesla’s director of strategic affairs. He worked in the State Department for the Bush administration until 2006, helping support military operations in Iraq and Afghanistan.
O’Connell can point to no specific policy achievements but sees the fact that political bigwigs know about Tesla as his big accomplishment so far.
“The fact I can have these conversations with, as they call them in Washington, with principals, with senators or senior policy-makers in the White House and DOE, these are things not usual for your average start-up,” he said.
How has Tesla connected to the political establishment?
– It appointed Steve Westly, once controller for the state of California and an unsuccessful gubernatorial candidate, to its board in 2006.
– Schwarzenegger was the star at Tesla’s public unveiling in Santa Monica last year. He also spoke when the Tesla was one of five alternative-fuel cars exhibited at the Los Angeles Auto Show in November 2006. He appeared again with the Roadster last week in Sacramento.
– When Rice, a former Stanford University provost, visited the Bay Area in May to show off U.S. green technology to Australia’s foreign minister, she got a ride in a Tesla at Moffett Field. She gave the car a thumbs up, calling it “a little rocket ship.”
– In June, Tesla received a $561,000 grant from the state’s Air Resources Board to help develop chargers for electric cars.
– In August, Sen. Barbara Boxer, D-Calif., held a hearing in San Jose to discuss energy efficiency, with Tesla Chairman Elon Musk as a speaker.
– Last week, in a promotional effort for both Tesla and the Hyatt hotel chain, Tesla held media events where San Francisco Mayor Gavin Newsom as well as Schwarzenegger spoke.
Tesla “invested in a product that advertises itself,” said Roland Hwang, vehicles policy director for the Natural Resources Defense Council in San Francisco. “It has an immediate attraction to politicians who want to gravitate toward a product that makes a statement.”
Automakers covet that kind of attention. The Detroit News recently reported General Motors, Ford and DaimlerChrysler spent more than $15 million in the first six months of 2007, mostly to lobby against large hikes in federal fuel-economy standards.
O’Connell shies from the word lobbying. He won’t say what Tesla has spent on its efforts to champion things such as tax breaks, but it doesn’t have offices or staffers in Washington, nor has it hired outside lobbyists.
He sees his work as an extension of Tesla’s mission: Spreading the word about technology and innovation, to confirm that solutions to big problems such as global warming and a dependence on foreign oil are possible, and that they’re coming out of Silicon Valley.
“This is not all gloom and doom,” O’Connell said in a recent interview. “You don’t have to sacrifice (style and performance). That’s the message we’re working on.”
O’Connell describes “the things we care about on Capitol Hill” as an income tax credit for electric-car buyers; Corporate Average Fuel Economy (CAFE) credits, which would allow a company whose cars exceed fuel economy standards to trade with other companies whose cars don’t meet standards; the Energy Department’s loan guarantee program, which would provide federally guaranteed loans to start-up alternative fuel companies; and incentives for makers of electric cars and batteries.
O’Connell expects most of these issues to be decided after Labor Day, when lawmakers return from their vacations.
In May, he wrote on his blog at www.teslamotors.com that Tesla has been “very busy” in Washington for six months. “We’ve been trying to get the word out that there is a company in California that’s applying good-old-American ingenuity to address the twin crises of global warming and foreign oil dependence,” he wrote.
The blog post includes photos of O’Connell with Sen. Jeff Bingaman, D-N.M., chairman of the Energy and Natural Resources Committee, and Sen. Pete Domenici, R-N.M., another member of that committee. Domenici praised the car on his blog: “This Tesla car has some real zip, but it has no noise, no pollution and no gasoline.”
Gloria Bergquist is very aware of Tesla. She’s vice president of the Alliance of Automobile Manufacturers, the Washington-based lobby group representing nine automakers including Ford, Chrysler, General Motors, Toyota and Volkswagen.
In June, she said, Democratic Sens. Harry Reid of Nevada, John Kerry of Massachusetts, and Evan Bayh of Indiana held a meeting on energy efficiency with representatives from four companies, including Tesla. Roll Call, the newspaper of Capitol Hill, ran a photo of Reid being driving in a Suburban SUV on his way to drive the electric Tesla.
“There clearly is an infatuation with the electric motor and its possibilities,” Bergquist said.
The Alliance doesn’t see Tesla as a rival. “We view it as a positive,” she said. “There are a lot of creative entrepreneurs and engineers working on different ideas.”
But displaying a prototype of an electric car for politicians isn’t the same as producing a production vehicle that’s as affordable as the average car that costs about $25,000, she said.
“That’s the challenge,” she said.
In the meantime, as Hwang noted, Tesla has become the poster child of the emerging green economy.
“Tesla, in a very kind of crisp manner, articulates the ability of new technologies,” he said. “There’s a hunger, a pent-up demand for a real environmental car that’s fun to drive. There’s political demand there, too.”