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Sound ambitious? That’s because it is. Members of Hsieh’s Downtown Project are being asked to get rid of their personal cars and start using the Project 100 transportation mobility system app when it becomes available later this year or next. They’re starting an invite-only beta program in the coming months, and when the transportation system is fully deployed it’s supposed to hit all those 100 numbers.

Here’s how it works. A Project 100 member opens the mobile app and is offered a number of choices based on their location and the location of the nearest transportation option. A member could see:

• 1). An on-demand Tesla Model S that can be driven to you and pick you up. Like an Uber but with a subscription and a Model S.
• 2). A bike parked near you that you can unlock and pedal to an appointment that’s several blocks away.
• 3). A bus shuttle stop near you for longer trips.
• 4). A neighborhood (slow and low range) electric vehicle that you can unlock and drive and park at your desired location.

Details are scarce about how much this would cost to build or how much the monthly subscription would cost users. The customer pricing will be based on zones in Vegas and tiered plans.

The Downtown Project calls its plan “the ultimate in collaborative consumption,” and the FAQ says that the team looked at currently available options like Uber, Zipcar, and public transportation, but wanted to build an entirely new option. That’s in keeping with the spirit of the Downtown Project, which is using the clean slate of downtown Vegas to create a new type of community and urban living system.

Project 100 is working with a startup called Local Motion, which is out of Stanford and is building the software and hardware to share the bikes and cars and manage the reservation system. Local Motion is also working with Google for fleet sharing on its campus. Originally Local Motion was developing the electric vehicles that fleets would share (in addition to the software) but it looks like the company has moved more away from that model.

Isolated and defined communities are the optimal places to try new, outside-the-box, and just plain wacky new forms of urban transportation. San Francisco has actually been a pretty good place to launch an alternative transportation startup in recent years, due to the city’s early adopters and lack of parking and good public transportation. Scoot Networks has been building an electric scooter sharing network here, and Ridepal has been developing Google-style commuter buses for companies (both Greenstart companies).

Better Place has focused on Israel for its electric car sharing and battery swapping network, and found mixed success (to put it politely). Masdar City has built electric public transportation pods, though I’ve also heard that not many people use these. New transportation doesn’t always catch on. Downtown Vegas and Project 100 could be an interesting option, though success will be based on how attractive the service is for the customers and how much the network ultimately costs.

Check out our coverage of the tech revitalization of downtown Vegas:

• An inside look at the high-tech awakening in Las Vegas
• For startups, Las Vegas is a beautifully clean slate
• 5 Las Vegas startups you need to know

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And while Tesla became associated with its ultra high end sports car, the Roadster, the vision for the company has always been to bring electric vehicles to the mass market. I caught up with Motor Trend’s Editor in Chief Ed Loh to discuss the challenges ahead for the leading EV company and whether Tesla really can capture the attention of a broader automotive market.

(This interview has been edited for length and clarity).

Q).  What were the key distinguishing features that helped the Model S win Car of the Year?

A). In all of our six criteria (performance and intended function, engineering, efficiency, safety, value, advancement in design), the Model S blew us away. It’s a good looking car. It’s very sexy. It’s got a great profile, reminiscent of the Jaguar XS or the Porsche Panamera. Yet it’s an electric car, one of these new green cars, but it’s not one of these hippie-mobiles like the Prius with a weird campback profile and small wheels. In terms of design it’s gorgeous.

When you talk about engineering excellence, it’s a seven passenger vehicle. Five adults and two children can fit and it has an amazing amount of cargo space. It has a front trunk and a rear trunk. It’s a great driving car. There’s no penalty here. It’s the fastest American built sedan based on our numbers. 0-60 in under 4 seconds for the signature Performance model and it also handles really well. And on top of it, it has this fantastic electric technology. Well you look at the criteria, it’s all of these that hit it out of the park.

Q). Tesla currently has 13,000 reservations for the Model S, it’s still a very small company. Is this the beginning of Tesla becoming a more mainstream auto brand?

A). We give the Car of the Year the award. We don’t give the business case of the year award. We have some industry heavyweights that are guest judges and that was a big part of the discussion. This is a very small company and some of the numbers don’t shake out. But that’s not what it’s about. The award is about the car.

We do think this is a significant turning point. Motor Trend’s been around since 1949, 64 years of giving this award, and the award has always gone to a car powered by gasoline with an internal combustion engine. That we gave it to an electric car is a big deal in our history.

At Tesla you view this as validation from someone in the establishment. Elon [Musk] and I were chatting and one of the things we said is that we hope this is an inflection point, a turning point in the history of the automobile where new technology is being embraced. I think Tesla is definitely banking on this as something that changes people’s minds.

Q). Tesla is using a retail experience model rather than a dealership model. What is Tesla doing differently and do you think it’s going to work?

A). It’s a little early to draw any conclusions. It’s fascinating. The veterans are incredibly cynical because Tesla has positioned itself head to head against NADA (National Automobile Dealers Association). They’re challenging them because auto company owned stores or dealerships are against the law. A lot of people want to put Tesla out of business simply because they’re operating these retail outlets. Even though from Tesla’s point these are not traditional dealerships, you can’t walk in, buy a car and drive it off that day.

Obviously George’s (Blankenship) impact is clear. These are Apple stores for Tesla. They’re situated in high traffic, ritzy high end locations. I went to the opening of the one in Santa Monica and George told me, “yeah I remember ten years ago standing here on the opposite side of the street just over there” and pointed at the Apple store. They want that Apple experience… you’re dazzled by the hardware, and you get to touch it and interact with it. The key difference is you can buy an iPad. This builds the excitement.

My core concern is will enough Americans be accepting of this purchasing processing? We’re famous in the world for wanting it yesterday and buying whatever’s in stock. I spoke to a guy at Rolls Royce and he said for the American customer, the dealer has so much power because it orders all the cars. When you’re a Rolls Royce customer you can customize it to the nth degree yet nobody in America does that whereas in China and Europe the customer is happy to wait for the car and get it exactly the way they want. The millionaires in America walk in, want a white one, here’s the check, and I want the keys right now. With that kind of purchasing history mindset, will they accept a Tesla store that requires you to wait three months to get your car?

Q). Do you think now that the Model S is a bonafide competitor for the German automakers?

A). Yes and no. Until they’ve achieved volume, which is a considerable feat, the answer is likely no. It’s a rounding error for the 5 series BMW or the E class. They’re not afraid if a few people go with a Model S.

But, absolutely when you look at the specs, dimensionally, performance and in terms of cachet. It is a premium luxury sedan, it’s right in the wheel house of the Porsche Panamera. It really does span the full scope of an E class or a 5 series. It’s got better economy than a [BMW] 528 yet it performs at the level of an M5.

Q). Tesla has had some issues scaling and is behind schedule. How much of an issue do you think scaling the manufacturing process will be?

A). That truly is one of the core questions that came out of our deliberation process. Building one is a feat in itself and something they should be lauded for, but getting scale is an entirely different shooting match.

They’re not as supplier-constrained as a typical auto manufacturer. They do a lot of the building in house. Elon has put it that they bring in raw metal and plastic pellets and spit out a car. They’ve brought in a lot of what were the traditional relationships with vendors because the parts are just not available. To get up to a larger production scale, they’re already facing challenges. They are late. Any new technology is a painful process.

Q). Tesla has laid out an ambitious roadmap. It’s talking an SUV, the Model X, for 2014, for 2015 a scaled down Model S for around 30K, another Roadster and crossover SUV after that. Do you think Tesla can succeed in making EVs viable in the market?

A). The major signpost will be once the smaller battery versions of the Model S, the 40KW and 60KW models, start shipping. Obviously the Model X will be a huge step in the right direction in terms of greater volume because that’s a huge market segment.

Truly the lower priced, the mass market electric car is the biggest goal. If they can hit that and get into the Prius category, like a loaded Prius, you’ll start to see a major shift. It’s actually pretty easy to build a Bugatti Byron Veyron, a 3 million dollar no limit supercar. It’s a lot harder to build a Camry or a Prius, that gets purchased by everybody because it has all the right features at the right price. Tesla’s demonstrated they can build something at a high end, high level. If they can bring something out that can bring out the masses, that’s a big challenge.

As for the phase after that, a new supercar or a smaller SUV, those will not happen unless they can get through the Model X and the mass market electric car.

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Back in July, executives at the electric car company had expected to ship about 500 Model S cars in the third quarter and 5,000 overall in 2012. In September, Tesla acknowledged that it was lowering that goal to making 300 cars and delivering 200 to 225 because it was four to five weeks behind schedule.

Tesla has had no problem attracting reservations for the Model S, its second model and one that it hopes will generate profits, but it needs to crank up its factory to mass produce the car. Tesla CEO, Elon Musk, said back in July that the company’s pace of producing Model S should hit 20,000 per year by the end of 2012, and on Monday he said the company should hit that milestone in the next four to five weeks.

The company, which delivered the first Model S in June this year, now expects to deliver 2,500 to 3,000 Model S in the fourth quarter and over 20,000 in 2013.

“Several months ago, I said that the coming several months will be a test for Tesla as it goes through the valley of death. I feel as though we’ve made it through that valley at this point,” Musk told analysts during a conference call about the company’s third-quarter earnings on Monday.

The company’s first model was a luxury sports car called the Roadster that costs over $100,000. The Model S starts at $57,400 (without counting the $7,500 federal tax credit). Tesla went public in 2010.

As a young carmaker, it’s not surprising to see Tesla running into manufacturing challenges, which include correcting mistakes in cars that just rolled off the assembly line and changing component suppliers. And that was the basis of some questions from analysts during the conference call. Musk said most newly built cars require some work to correct “minor issues,” including ones that involve the aesthetics of the car, and said those issues aren’t something average consumers would notice. He added that he was not aware of any supplier issue that would prevent the company from getting to the annual production rate of 20,000 cars.

“We are seeing a rapid decline in the number of issues that needed to be corrected from vehicles coming off the line,” Musk said.

How well the company can manage the expectations of investors and the public also will be critical for the performance of its stock, which rose over 8 percent to $31.31 per share in recent trading.

Here are highlights from the third-quarter financial results:

Revenue: $50.1 million, up from $26.7 million in the second quarter but down from $57.7 million from the year-ago period.

Losses: $111 million, or $1.05 per share, compared with $105.6 million, or $1 per share in the second quarter and $65.1 million, or $0.63 per share, from the year-ago period.

Roadster update: Tesla shipped 68 Roadsters in the third quarter and expects to do “a decent business” selling used Roadsters now that the car has been out for a few years, Musk said. Tesla has a staff dedicated to managing the used Roaster business.

Retail operation: The number of showrooms and service centers in the U.S. grew by 30 percent during the third quarter. The showrooms — and word of mouth from satisfied customers — are primary ways for Tesla to publicize its cars. The company doesn’t spend money on advertising. Tesla also plans to use the reservation system to sell cars for a while versus selling a car on the spot to anyone who walks into its showroom.

Musk said Tesla may be able to do that starting in 2014, but his vice president of sales and marketing, George Blankenship, played down that possibility by telling analysts that the on-the-spot delivery “is not even a goal. The goal is to have a reservation system so that we can build a car specifically for you.”

Model S cancellation: Now that Tesla has started Model S delivery, it’s telling customers who signed up early on to convert their reservations to non-refundable orders. That has caused some customers to drop out.  The cancellation rate for those who have been contacted by Tesla is about 10-15 percent, said Tesla’s CFO, Deepak Ahuja. The company had over 13,200 reservations in the third quarter.

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Tesla is on the verge of becoming cash flow positive, said Musk, and thus “will not have to spend any of the money raised, at least until we embark upon a major new vehicle program.” In the short run, he said, the funds could help cover any potential unforeseen disasters, like a recent crisis that occurred when a supplier had a flood in their factory and caused delays in Model S production.

Musk also gave context for how the difficult the task that Tesla faces over the rest of 2012:

While we are indeed a few weeks later than we would like, this is perhaps not a terrible outcome for a product as advanced and complex as the Model S, particularly given that Tesla is doing manufacturing of full vehicles for the first time with a new team and new suppliers.

Musk explained the change in the DOE loan payback agreement as an adjustment of making payments to a reserve account, and also an acceleration of payments if Tesla had them in early 2013:

We did suggest that holding nine months worth of principal payments in *advance* in a reserved account was a bit extreme and, moreover, was never part of our original loan agreement. The DOE agreed and reduced the advance payment reserve account to six months.

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Musk has been discussing the idea of a Tesla-bankrolled Supercharger for almost a year and I first heard about the plan back in November 2011. The idea is that because the market for electric cars is so new, Tesla wants to help build out the charging infrastructure, which is one of the industry’s biggest barriers.

Musk called the Supercharger “the answer to the three major problems holding back electric vehicles” in his remarks during the event. These problems are being able to drive electric vehicles long distances conveniently, the issue of electricity being generated at a distant fossil fuel power plant, and the issue of cost of electricity.

One of the surprising parts of the announcement is that Tesla will be installing a lot more stations than I had originally thought. While Tesla announced the locations of its first six stations at the event tonight (“constructed in secret”), the company also says that in 2013 it wants to install many more Supercharger stations throughout the U.S. as well as Europe and Asia. Within two years the U.S. will be covered in Superchargers, said Musk during the event.

In that respect Tesla is making a considerable commitment to becoming an infrastructure installer and is developing more of a vertical business model for electric cars. I wonder how the companies who are building business models off of electric car charging — like Better Place, NRG Energy, Ecotality and Coulomb — feel about Tesla crossing over into their turf.

Because the technology is using solar power, as well as previously designed technology for Model S charging, Tesla says the chargers are cheap to build and install. There’s also the fact that there’s just not a whole lot of Model S drivers out there yet that will be using the power. For those reasons Tesla is offering long distance charging free for Model S owners.

The Superchargers can charge the Model S cars with 100 kilowatts of power and provide three hours of driving at 60 mph in about half an hour. Who wants to take me on a Model S road trip down to LA?

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That’s likely due to a combination of California’s strong state incentives for electric cars, the state’s population of tech early adopters, the area’s environmental leanings, and its population that in areas like the Bay Area have considerable disposable income. And because the population of California is the most receptive to electric cars, the car manufacturers are also concentrating on the state first and foremost, launching cars in California and opening up dealerships in California first.

Tesla Roadsters lined up outside of the Model S Beta Customer event

California also has its own electric car startups, too, including Tesla Motors, Fisker Automotive, and Coda Automotive.

Other states that also have populations interested in electric cars, include New York, Florida, Texas, and Washington.

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