Tesla Model S Assembly to Begin With Highest-Priced Version

Tesla Motors Inc. (TSLA), the U.S. electric carmaker backed by Daimler AG (DAI) and Toyota Motor Corp. (7203), said the first 1,000 units of the battery-powered Model S sedan it produces next year will be the most expensive version.

About 5,000 of the cars will be made at a factory in Fremont, California, in 2012, Tesla said on its website today. The first 1,000 will be the “Signature Series” model, which can travel as far as 300 miles on a full charge and has a base price of about $77,400 before a federal tax credit, Tesla said.

“It’s a good business decision: Start with the one that gets you the most revenue,” said Jim Hall, an industry analyst with Birmingham, Michigan-based 2953 Analytics. “Also, if you’re positioning it as a premium product, better to start with the highest-priced model and then work your way down.”

Tesla, based in Palo Alto, California, last month said its fourth-quarter net loss widened to $51.4 million from $23.2 million a year earlier as it increased investment in the Model S. The company, named for inventor Nikola Tesla, seeks to become the leader in battery-powered cars, aided by supply agreements with Toyota and Daimler.

The Signature model will “feature unique badging and an extensive complement of options,” George Blankenship, Tesla’s vice president of sales, said on the company’s website, without elaborating.

The base-level Model S, which goes 160 miles per charge, is about $57,400, and a version able to go about 230 miles will be about $67,400, the company said. The prices for all the Tesla models are before a $7,500 federal tax credit.

Tesla said it expects to be able to build as many as 20,000 vehicles a year at the California plant by 2013. The Model S is the second vehicle from Tesla, following the $109,000 electric Roadster that is partially built in the U.K.

Tesla fell 1 cent to $24.94 at 4 p.m. New York time in Nasdaq Stock Market composite trading. The shares have dropped 6.3 percent this year.

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

To contact the editor responsible for this story: Kae Inoue at kinoue@bloomberg.net

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