in above table, 3/4 occurrence Norway takes 50%+ EU sales. IMO, besides Norway and Netherlands, the rest of Europe sales won't do anything better than China.
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in above table, 3/4 occurrence Norway takes 50%+ EU sales. IMO, besides Norway and Netherlands, the rest of Europe sales won't do anything better than China.
Probably the former because this is not an exception : if you look at 2014, half of the European sales over the full year were for Norway and every single month Norway takes between 35 and 65% of the orders. I expect no different for this quarter.
Yeah, seriously, Sweden, France, UK and Germany better start paying up for all those Superchargers.
Population (in millions), total Model S, Model S per million
Norway: 4.9, 6417, 1309.6
Denmark: 5.4, 611, 113.2
Switzerland: 7.8, 785, 100.6
Belgium: 10.8, 674, 62.4
Sweden: 9.3, 323, 34.7
Austria: 8.4, 199, 23.7
Germany: 81.8, 1102, 13.5
UK: 62.0, 811, 13.1
France: 65.5, 393, 6.0
Italy: 60.3, 66, 1.1
Or the expected parity of EUR/USD could be the biggest risk for EU sales.
In spring-14, 1€ = 1.39USD
Today, 1€ = 1.05USD
Some analysts believe, due to Quantitative Easing by EU Central Bank or so, that 1€ = 0.85USD by 2016.
If Tesla has to increase its retail prices in EUR by 30% or more, that could be devastating ?
dirkhh
Middle-aged Member
While I understand that this is an "EU Market Situation" thread, let's keep in mind that this would have impact in other markets as well. Audi/BMW/Mercedes will get cheaper compared to Model S. This may not make a big difference for some buyer segments, but might have some overall impact.
Tesla is not doing well in the countries without subsidy? If so, this means the primary hurdle is still price tag. This is only going to get worse in 2015 with strong dollar. I highly doubt EU market can grow 50% S in 2015, at best 10-20% or even stay flat.
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good point. seriously, I suspect investors should think about the possibility that TM miss 50% Growth goal for S. If X can't ramp up production quick enough, then 55K might be at risk.
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good point. seriously, I suspect investors should think about the possibility that TM miss 50% Growth goal for S. If X can't ramp up production quick enough, then 55K might be at risk.
There's been a broad agreement across all parties to not change the EV incentives until there are 50k zero emission vehicles on the road or 2017 arrives. We'll reach 50k zero emission vehicles this month or possibly next month.
As a result, the sitting parties have launched an extensive review of the EV incentives and in fact the entire current car tax system. They will be looking at what works, what doesn't, and come up with a policy for the next few years. This is a process that is ongoing as we speak, and the results are scheduled to be announced in May. And then, changes to the current system will probably not come into effect until 1. january 2016.
Now, what they will actually conclude is anyones guess. You have four parties who will all want to have their say:
The Progress Party - Basically christian conservatives with a strong populist streak. They are against taxes, and pro-individual freedom. They've for instance legalized the Segway. I would say they are conflicted by loving that there are no taxes on EVs, but hating that the lower taxes for EVs cause other cars to be taxed harder. Also, they don't believe in anthropocentric climate change, though they do concede that NOX, SOX and particulate emissions should be avoided.
The Conservative Party - Old-school conservatives (though not extreme). In my opinion they are trying to be viewed as a responsible adult that you can trust. They want to save the environment, and their Environment and Climate minister has promised a 40% cut in carbon emissions by 2030. They also want to be fiscally responsible.
The Christian Democratic Party - Basically feel-good christians. They are for helping refugees, old people, children, as well as saving the environment and the world.
the Liberal Party - Basically pro-(small) business and pro-environment. They are the most vocal supporter of the EV incentives.
The way the dynamic works, is that the Progress Party and the Conservative Party are in a minority government, and are completely dependant on the support of the Christian Democratic Party and the Liberal Party. The support of just one of these parties is sufficient to get policy through the parliament, but there is an agreement of cooperation between the four parties, and the Christian Democratic Party and the Liberal Party have worked together in standing up to the minority government.
How this works in relation to the EV incentive review: The Progress Party and the Conservative Party will be trying to cut down on their least favourite incentives (access to bus lanes is probably first on the chopping block) and they will probably also try to cut taxes. The Progress Party will also be trying to make the car tax system as favourable to the cars their core voters buy (mostly reasonably priced family cars). On the other hand you will have the Liberal Party, hopefully with the support of the Christian Democratic Party, trying to keep as much of the incentives for as long as possible.
Personally, I think the most important incentives (exemption from 25% VAT and exemption from additional car taxes) will last a few more years, with a gradual phase-out over a few years. Maybe in 2020 the incentives will be gone.
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jhm
Well-Known Member
Thanks! YTD 1071 up from 875 last year, 22.4% increase. This is not quite enough, we need a 50% increase y/y. It could just be logistics. We'll need to see how March plays out.
I am glad that Tesla has extended the RVG to Europe and Japan. Hopefully that will shore up demand among potential buyers who might worry that Teslas might lose value like other high end cars. This is one promotional difference between what has supported sells in the US and has not been offered in EU. In effect, Tesla has offered a better value proposition in the US than in Europe, despite effort to keep pricing at parity.
I know that bears will point to this as confirmation of their "demand problem" thesis, but I am not at all questioning global demand. I am questioning relative demand where the value proposition has not been fully comparable. As Tesla brings greater parity of total offer to each market, it will better access the demand in those markets.
Model S buyers do care price tag, otherwise it can't explain why sales is so poor in EU countries without heary EV subsidy. Strong dollar and low oil price is not the fault of Tesla, but TSLA investor should prepare for it.
dirkhh
Middle-aged Member
I don't think that the data that we have proves that at all. The data shows that some countries with subsidies show better than average sales growth. It would be a massive oversimplification to turn that around and claim that this shows price sensitivity. There are many other explanations, many of which have been explained here in great detail.
other than competitive pricing after subsidy, I can't find reasonable explanation why tesla is doing so poor in France, Italy, Spain, Sweden blah blah. I agree there are some other factors, but pricing looks the major one. Not to mention Germany, not only it's anti american car but also model S is expensive
My take on slower uptake of Tesla in Europe as compared to US market:
Tesla's size is too big for many European towns and streets. Tesla can not do much about this.
It is US made car. Branding of US made cars in Europe, before Tesla, was not so favourable when compared to some European car makers. Hopefully more Tesla cars on the roads will correct this image problem:smile: of US made cars, around the world.
Another, perhaps larger reason is a lack of awareness of Tesla being electric. I think once that awareness spreads a bit more, European car buyers will flock to Tesla as petrol is more expensive there.
My guess would be that car buyers in Europe would be more sensitive to petrol prices rather than Tesla price.
Similar situation in Australia, lack of awareness may be the largest hurdle and perhaps the easiest to overcome.
Perhaps the most efficient way to penetrate more into both European and Australian markets would be to win "business car" market segment, as this market segment overlaps to a large degree with the potential Tesla buyers. People that can buy Tesla very often drive business car, or company car. That involves financing, though financing can be arranged through numerous providers. Toyota has its own Toyota Finance division, which is doing quite well. My BMW is leased through Toyota Finance, as employers pick finance providers for their fleets, and then employees have a choice of which car to lease, with some restrictions.
Tesla needs to win National Sales Managers, as most sales people drive a business car. Some businesses have so many business cars that they employ National Fleet Managers. Strange job, but hey there are so many of these here.
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dirkhh
Middle-aged Member
I'm sorry, maybe you're not thinking this through.
Have you driven on the streets in France, Italy, or Spain? Most inner cities are hard to negotiate in a 3 series BMW. The Model S is way too big for their streets.
Charging. Tesla isn't doing any marketing and people worry about this stuff. See China. There are lots of people who don't live in large houses in the suburbs with three car garages. Cities in Europe tend to be a LOT denser than in the US. Twice so in Asia. If you live in an apartment or condo, charging becomes a huge issue.
Reputation of US cars. The Chrysler LeBaron was the best selling US car in Germany in the early 90s. No, I am not making this up. The disastrous Daimler/Chrysler marriage has certainly shaped the opinion of many Germans about US cars (and they are very much local buyers, more so than most any other country - again, look at the numbers).
You are taking a simplistic approach. Maybe your result matches your intentions (you seem to almost exclusively post in the investor part of this forum). But the conclusions that you draw here are a massive over reach based on the data available.
I think language also plays a part in rate of Tesla uptake. English-speaking countries seem to be adopting faster because it is easier for the message to get across. UK seems to be doing okay, and I believe English is widely spoken in the Netherlands and Norway.
We know that owners are the best salesman, causing a positive feedback demand cycle, and so it's a question of how fast demand will increase, not about where the demand will come from. EU and Asia have not had the car for as long as the U.S., it will take time for the momentum to build, and probably longer when people need translation and can't listen directly to Elon videos on YouTube or even read TMC.
We know that owners are the best salesman, causing a positive feedback demand cycle, and so it's a question of how fast demand will increase, not about where the demand will come from. EU and Asia have not had the car for as long as the U.S., it will take time for the momentum to build, and probably longer when people need translation and can't listen directly to Elon videos on YouTube or even read TMC.
I still think it is incentives what matter most. And yes, price is very important : this is a 100k purchase after all. Even for those with a top quintile income, it's still a significant purchase. But it's also the other incentives. For example, I live in a large city in the Netherland and although there is only street side parking, this isn't a problem at all. You put in a request with the city council and they'll come install a charger right in front of your door. (For free too). Win/win because now you've got a guaranteed parking spot right in front of your door. There are at least 10 chargers I know of that are within a 5 minute walking distance from my door. I'd have to look it up how many they have in total, but a few months ago they had a bit of a party because they installed the 1000th public charger this way in a city of barely 600k.
As far as I am aware English is widely spoken across Europe, spreading more by the day.
Agree with you that the momentum in Europe might take longer to build than in US, there are more hurdles for Tesla to overcome.
Going after large government contracts might speed Tesla's path, however that is unlikely to work in the markets with local car makers.
RobStark
Well-Known Member
Adult English Proficiency.
Interesting that Norway has the lowest English proficiency in Scandinavia.
Given the population and GDP per capital Estonia is a good Tesla market and has a correspondingly high English proficiency.
Belgium has much higher proficiency than France and correspondingly much higher Tesla sales per capita.
The one that really sticks out is Switzerland. Lower proficiency than Austria but much better sales.
BTW I think Ireland should be ranked in there. :tongue:
Interesting that Norway has the lowest English proficiency in Scandinavia.
Given the population and GDP per capital Estonia is a good Tesla market and has a correspondingly high English proficiency.
Belgium has much higher proficiency than France and correspondingly much higher Tesla sales per capita.
The one that really sticks out is Switzerland. Lower proficiency than Austria but much better sales.
BTW I think Ireland should be ranked in there. :tongue:
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How many cars gets sold annually in Norway in Tesla’s segment? I mean how many cars Tesla would sell in Norway without tax exemptions?
I think it is worrisome, that 50% of Tesla’s EU sales is depended on one country’s tax exemptions.
are a great Tesla market, they dislike paying for the expensive smelly petrol.Similar threads
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