Tags: Farkas | success | filter | Tesla

Car Charging Group's Farkas to Moneynews: Tesla's Success Will Filter Down to Cheaper Electric Cars

Monday, 05 Aug 2013 06:33 PM

By John Bachman and Dan Weil

The success that Tesla Motors is now having with high-end electric cars will ultimately trickle down to less expensive models, says Michael Farkas, CEO of the Car Charging Group, which provides electric car charging services.

"The core problems that all of the other car companies had was very simple. If we see any new technology, it's always adopted by those that can afford it, and it's typically those on the higher end of the market," he told Newsmax TV in an exclusive interview.

The same thing happened with computers and cell phones, Farkas says. "Tesla just did it with the right business model whereas the [Chevrolet] Volt and the [Nissan] Leaf didn't in their initial cars."

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Tesla opted for the top end of the market, where people can spend the extra for a high-quality product, Farkas says. The next step is "you start seeing efficiencies in the lower end of the market, . . . [and] the lower end of the market then starts participating," he said.

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Now Cadillac is making a version of the Volt, and BMW has an electric car. "We see still again a little bit more of a premium car," Farkas said.

"And then these products are going to be commercialized, commoditized. Prices come down, and then we'll see them in the Chevys and the Kias and the Hyundais of the world."

So it's just the normal introduction of technology into the marketplace, Farkas says. Tesla had the initial advantage with a "phenomenal product," he said.

Tesla's expansion into stores and on the Internet raises the issue of whether car dealerships are still necessary.

"That's a good question that we must ask the consumer," Farkas says. "Are they happy with the car shopping experience that they have when they go into these large dealerships?"

His own experiences haven't been "the greatest going into these dealerships," Farkas said. Meanwhile, "going into a Tesla dealership and buying a car is a no-hassle experience," he said.

"There's no pressure at all, it's done through a computer . . . at their locations. I have to tell you, the experience is just a pleasure at the Tesla dealership."

The move of high-end auto makers to offer cars that run on regular unleaded gasoline rather than on more expensive high-octane fuel won't hurt the electronic car business, Farkas says.

"Either way, gas is still way too expensive. It's just much cheaper to power your car using electricity to travel that same distance. Whether you use cheaper gas or more expensive gas, the bottom line is they're both expensive."

Internal-combustion engine cars can adopt a lot of technologies, Farkas says. "But, again, the bottom line is electronic vehicles are just much cheaper to power a car," he said.

"They're much cleaner. We now have the ability, utilizing solar and renewables, to be completely clean from the well to the wheel. You'll never get there with internal combustion engines."

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