As a follower of technology companies and products I've been watching Tesla Motors for years. With the Model S, Tesla has produced a luxury car that has raised the bar in terms of usability, features, performance, and safety and scored a near perfect score in Consumer Reports review.
Tesla appears to be putting significant pressure on luxury car brands. The Model S outsold, in the first half of 2013, Porsche, Jaguar and Land Rover in California and in the first quarter of 2013 some models of Audi, BMW and Lexus. At this point, demand for the Model S appears to be outpacing production capacity. The current delivery wait on the Model S is two months or more, as indicated on the Tesla website.
Today, at ~$70k USD, the Model S is in a different market segment and significantly more expensive than the the biggest selling EVs on the market. The Toyota Plug-in-prius (US$32,000), Nissan Leaf (US$29,650), and Chevy Volt (US$34,995 in the 2014 model year) cost less than half of a Model S. Like the original Apple iPhone that started at $500, Tesla may introduce a lower cost model in the next year or two. A model in the ~$50k USD range with a similar range to the Model S (~200 miles on a charge) would be near enough to the cost of a Pip/Volt/Leaf to start to put pressure on these and other mid range cars.
It's interesting and exciting to see a new strong contender in the car industry. Building cars is capital intensive, requiring expensive development and tooling costs and there are few new and successful car companies. Tesla appears to have made it through the riskiest part of building their business, and is nearing profitability. I'm willing to bet that Tesla is a frequent topic of internal discussion in car companies. The increasing level of competition is likely to yield product improvements similar to what was seen in the smartphone market after the iPhone was released. Car companies will have to work hard to make their vehicles more efficient, safer, and easier to use if they want to keep up with the benchmark that Tesla has set.
Tesla appears to be putting significant pressure on luxury car brands. The Model S outsold, in the first half of 2013, Porsche, Jaguar and Land Rover in California and in the first quarter of 2013 some models of Audi, BMW and Lexus. At this point, demand for the Model S appears to be outpacing production capacity. The current delivery wait on the Model S is two months or more, as indicated on the Tesla website.
Today, at ~$70k USD, the Model S is in a different market segment and significantly more expensive than the the biggest selling EVs on the market. The Toyota Plug-in-prius (US$32,000), Nissan Leaf (US$29,650), and Chevy Volt (US$34,995 in the 2014 model year) cost less than half of a Model S. Like the original Apple iPhone that started at $500, Tesla may introduce a lower cost model in the next year or two. A model in the ~$50k USD range with a similar range to the Model S (~200 miles on a charge) would be near enough to the cost of a Pip/Volt/Leaf to start to put pressure on these and other mid range cars.
It's interesting and exciting to see a new strong contender in the car industry. Building cars is capital intensive, requiring expensive development and tooling costs and there are few new and successful car companies. Tesla appears to have made it through the riskiest part of building their business, and is nearing profitability. I'm willing to bet that Tesla is a frequent topic of internal discussion in car companies. The increasing level of competition is likely to yield product improvements similar to what was seen in the smartphone market after the iPhone was released. Car companies will have to work hard to make their vehicles more efficient, safer, and easier to use if they want to keep up with the benchmark that Tesla has set.
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