Silicon Valley Takes On Detroit

The Tesla Roadster, an electric car, from a Blackstone piece that aired July 22, 2006.

Suppose someone told you gasoline for cars — and remember it's hovering around $3 dollars a gallon — will become obsolete?

Well, that's the promise being made by an upstart automaker — in Silicon Valley, reports CBS News correspondent John Blackstone.

At a glittering Los Angeles party, an ambitious new car maker declared the electric car alive and well. He let a privileged few experience its power.

The Tesla Roadster, which can go from 0 to 60 mph in 4 seconds doesn't come from Detroit, but from high tech Silicon Valley aiming to do what Detroit couldn't — make a commercially successful car that doesn't burn gas.

"Electric cars don't have to be little, pathetic commuter cars," says Martin Eberhard, CEO of Tesla Motors. "They can be beautiful. They can be quick and they can be desirable. The really quick and fun cars, those are electric cars."

Martin Eberhard made millions in the computer industry, then convinced other high tech investors like Elon Musk, the founder of PayPal, to put in big money.

Musk expects huge rewards if Silicon Valley can break Detroit's grip on the U.S. auto industry.

"It's batteries, it's drive electronics, it's electric motors," says Musk. "Those are skills that are present in Silicon Valley and not present in Detroit."

There's a quick charger for the Tesla's lithium batteries but the car can be plugged in anywhere. It'll go 250 miles on a single charge — at a cost the company says, of just 1 cent a mile.

Beginning with an invitation-only launch party, Tesla expects to quickly sell its first 100 cars for $100,000 each. But, don't give up. The company also has plans for a car for the rest of us. Tesla promises a less expensive four-door family car within three years.

For now, however, it's the rich and famous who are getting a charge out of this electric car, such as Gov. Arnold Schwarzenegger, who tried out the car and had two words to say: "Very Nice."
John Blackstone