• by Karl Greenberg , July 16, 2009

New York's art gallery district in Chelsea might, at first blush, seem like a hostile locale for a car dealership. But Tesla Motors, the San Francisco-based startup whose sole product is a $100,000 two-seat roadster powered by a proprietary electric motor, is hoping to plant roots right there.

 

"For us, Chelsea represents a unique opportunity to position ourselves in a creative community that is about doing things in a progressive manner, which resonates with our brand," Joe Powers, Tesla's sales manager for the Northeast region, tells Marketing Daily.

The new dealership also happens to look like an art studio, with the industrial Dia:Beacon-style concrete floors, flat white walls and functional tables on wheels, a cappuccino maker, and, of course, a couple of Tesla roadsters.

The company opened the store this week with free test-drives in a couple of the cars parked out front and hors d'oeuvres on tables inside.

Powers, a 20-something guy in jeans and T-shirt who could have stepped out of an episode of "The O.C.," says the store will be Tesla's flagship in the U.S. The company launched the store earlier this week with an event in Chelsea for prospective customers and media, "but now we are open seven days per week."

Tesla, which launched last year, is averaging national volume of 750 units in the U.S. and 750 in Europe. "New York is our third-biggest market after Los Angeles and San Francisco, so we will leverage as many brand-building opportunities as we can here," Powers says. He says the company will turn a profit on the roadster by month's end. A true four-seat sedan, to be called the S model, is due out in two years.

By year's end, the company will have opened stores in Miami, Seattle, Chicago and Washington, D.C., and in Monaco and Munich. It recently opened a Tesla store in London.

Powers says that the competition for the $100,000 roadster isn't a hybrid but quite the opposite: a Porsche. "The buyer also has a 911, a Prius and an SUV in his or her garage. We are offering both efficiency and performance." The company says the roadster goes 0 to 60 in a blistering 3.5 seconds. Porsche's 911 has a sticker price ranging from $76,000 to $140,000. Tesla is offering financing through Bank of America.

Besides the sticker price, which couldn't be too painful for someone who can shell out for a 911, the bigger challenge, per Powers, is building trust for a new brand. "That's gotten much easier as we have just secured a $480 million loan from the U.S. Department of Energy earmarked for development of the model S. That builds trust as it shows we will be around."

He adds that Daimler-Benz has invested in Tesla with an eye toward developing an electric version of the two-seat Smart car. That roadster gets about 244 miles per charge, and costs about $4 to "fill," per the company.