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If there is one thing that Kevin Yu loves to do, it is drive. If you visit the Tesla Motors

Asia Pacific director at his showroom in Tokyo, he’ll be happy to take you for a drive

around the block. On weekends, he’s often on the roads in one of his company’s colorful

electric cars.

Tesla opened its Aoyama showroom last November to much fanfare, the first Asian destination

for the lithium ion battery-powered Roadster – the only car it currently makes. The hand-

built, carbon fiber electric Roadster accelerates from 0-100 kilometers in 3.7 seconds. Last

year, Tesla formed a partnership with Panasonic Corp to market battery packs for electric

cars and more recently, Toyota Motor Corp invested $50 million in Tesla which will help

develop an electric version of Toyota’s RAV4 crossover vehicle.

Tesla has so far sold only about 1,500 of its Roadster sports cars worldwide. In February,

the Palo Alto, California-based company reported that its 4th-quarter net loss doubled to

$51.4 million from a year earlier as research and development costs for its upcoming Model S

sedan soared. However, revenue almost doubled to $36.3 million from $18.6 million a year

earlier.

Yu, who also oversees Hong Kong, has high hopes for Japan. Since the showroom opened last

November, Tesla has sold several dozen Roadsters. Prior to joining Tesla last year, he spent

four years here as head of PayPal (whose founder Elon Musk is also Tesla Chief Executive).

Japan Today editor Chris Betros visits Yu at the Tesla showroom to hear more.

What are some of the biggest misperceptions that people have about electric cars?

The biggest one in general that people have about electric cars worldwide is that they think

electric cars do not perform as well as gasoline cars, that there’s a technical limitation

that prevents electric cars from outperforming gasoline cars. That’s wrong.

Another is that somehow, electricity is more dangerous than gasoline. I don’t see how that’

s possible. Most people drive around with explosive gasoline in their car every day and think

nothing of it. I’ve also had people look at a Roadster and ask: “Can it go down the block?

”

What is your approach to marketing?

Tesla’s goal in Japan is to prepare the market for mainstream electric vehicles and change

people’s mindsets about electric cars. We think the best marketing is word of mouth –

specifically from our owners – and therefore, we place a high priority on finding real-world

customers for the Roadster. We have to basically introduce consumers to what is a brand new

concept to many of them. Up until Tesla came out and even after, many consumers thought about

electric cars the same way they thought about golf carts. The golf cart is probably the most

common electric vehicle that consumers are acquainted with. Many of the people who come into

the showroom think our cars are like that, despite the fact that they obviously look like

sports cars.

How well known is Tesla’s name in Japan?

Not as well known as in the U.S. where there has been more news about the company for years.

There was no concerted effort to get the word out in Japan until last year. In general,

though, Japanese consumers are familiar with electric cars because Nissan and Mitsubishi are

marketing them.

How many Roadsters have been sold so far?

We have sold 1,500 worldwide. Sales in Japan started last year, but we can’t give country-

level specifics.

What sort of interest does the showroom draw?

Weekends, especially in warmer weather, we get a lot of people. It has even become a tourist

destination. We get people from Thailand, Taiwan, Korea, all over Asia, and more and more

Europeans. You’d be surprised at how many people from Europe and the U.S. have their first

Tesla experience here in Tokyo. Many people who never thought about electric cars at home

check it out when they walk by.

One unique thing about our showroom is that we allow visitors to go on test drives. No matter

who you are, if you have an interest in trying out a Tesla, you can come by and have a ride

around the block. On weekends, there is a line. We don’t do that in any other country.

How much does the Roadster cost?

The price, which includes all the taxes and inspection fees, starts at 12.8 million yen and

can go past 20 million, depending on options.

That’s much more expensive than what Nissan and Mitsubishi Motors are selling.

That’s true. If you’re looking for an economy car that seats four people, then you don’t

buy the Roadster. If you’re looking for a super car that will accelerate from 0 to 100 in a

third of the time that most other cars take, you buy this.

When the company started, the choice was: Do they want to build a car in the $30,000 price

range and compromise on things like performance and range? At what point could they make an

electric car that was both less expensive and performed better than gasoline cars? The answer

was at the sports car level. If you look at the Ferrari 430 which accelerates from 0 to 100

in about 4.1 seconds, and you look at the Porsche 911 Turbo that costs $130,000, you realize

that there is a segment in which an electric vehicle can really be the performance and value

leader. The result was the Roadster that undercuts the Porsche by 15-20% pricewise and still

goes 0-100 faster than the Ferrari.

What was the reaction from Panasonic at first concerning the battery collaboration?

This is a good example of how quickly people can change their minds if you show them

something that actually works. Panasonic did not think automobiles would be an acceptable use

of their batteries at first. Our engineers ended up having to take matters into their own

hands, and demonstrate to Panasonic that our application was not only safe, it was

revolutionary. That was in the mid-2000s. In 2010, Panasonic opened a billion-dollar battery

factor in Osaka specifically to build batteries for electric cars, the same type they said

was not suitable five years earlier. They made a strategic shift pretty quickly all because a

start-up company like Tesla did something with their technology that they had originally

thought was impossible.

When will the cost of Tesla cars come down?

From next year, we will be making a 4-door Model S sedan and the price starts coming down

with that. The Model S will be our bread and butter car and will cost roughly half the price

of the Roadster. It will be more functional.