EU Market Situation and Outlook

[Matthias Buhl]

Just want to bring in my experience from Germany when it comes to Tesla perception. I talk a lot about the car with friends an family.

My Parents
Both of my parents drive an VW Phaeton and would be able to afford a Model S. My mother even considers to by one because she likes to be able to charge at home. But her concern at the moment is that the technology is relatively new and she rather wants to wait another two or three years to see if there are any downsides to the Tesla and to have a better availability of supercharging.

My dad is a quality fanatic. A major downside for him is the (perceived) inferior quality of the interior of the Model S as often reported in reviews. I heard Elon say that they are constantly working on that and also want to bring higher quality seating to the Model S. Maybe this will be a none issue in a few months. My dad also was concerned about the range and the charging time and taking detours to eventually drive by a supercharger. When I showed him the battery swap video he was speechless and I think this could be really an option here in Germany. We want to be able to drive 200 km/h and don't want to stop every hour to wait 20-30 minutes at a supercharger after that. This probably seems crazy to most of you (to be honest it is a bit crazy).

My Friends
When I talk to younger folks a bit more my generation 25-35 years, I see basically everyone is stunned by the car. But the price is out of range for most of them. Most of my friends buy used cars at a price point of around 10-15 €. There is a long way to go here before they are in the reach of a long range EV. But as they grow their income and prices for EVs drop this generation could be a huge market for Tesla, since they are already used to adopting new technology and almost none of them was really concerned with range or winter temperatures or anything like that.

Media
Another real problem here in Germany is that the EVs known to the public are not really compelling products. (Renault twizy (people make fun of), BWI i3 (ugly)) I think this will be solved only with more and more Teslas on the road and people getting to test drive the car. There is only one other person besides me that I know of who test drove a Model S yet. Tesla is getting way less free media coverage here in Germany than in the U.S. Of course that has many reasons. One of them is basically that you can't really write about the Model S without al least indirectly dissing the traditional German car makers for not being able to compete with a U.S. car startup in the most prestigious car segment. Since a lot of advertising money is changing hands between German car manufacturers and news publishers I would say there is a potential conflict of interest.

Internet
And then there is the general FUD throughout internet forums and comments. VolkerP already addressed that in his post. I think the only way to effectively overcome these things is to patiently address every one of these concerns over and over again and educate the public about the facts of Teslas approach to EV technology. I've learned that most of the people react quite surprised when they read about the actual facts of Teslas cars. Hopefully reason will eventually win over FUD.

My Car
I leased a almost fully equipped new Audi A5 just last week for another 4 years. Main reason for not buying a Model S was price. I leased the Audi A5 for about 24% below the list price (460 € p.m. including warranty, service, maintenance etc.). This is a common incentive for business clients with the major German manufacturers. Since we have no real EV incentives in Germany and no business incentives by Tesla I think price will stay the main reason for most people until GenIII. What happens when prices are not so much an issue with this car is basically what you see in Norway at the moment. Hopefully I will be one of the first GenIII reservation holders here in Germany.

P.S. I saw the first Model S in Germany on the Autobahn the day I picked up my new Audi at Neckarsulm (24-03-2014).

 

[Yggdrasill]

WoW, it'll be for sure to exceed 1500/month, even it can surpass 3 times of last best month (553 in december) -- 1659 without much difficulty.

Assume 1467 is the data as of 03/27 (03/28 data won't come out so soon)
There was 1248 as of 03/26
There was 898 as of 03/24

So delivered 219 beteen 03/26 and 03/27
average daily delivery is 175 between 03/24 and 03/26

If keeps this momentum in the remaining 03/28, 03/31 plus weekend in between, it's possible to see another 400-500 deliveries and even challenge 2000/month milestone.

The 1467 figure includes most if not all of 28. March. (These are *not* completely accurate official figures. These are figures generated from a government website where you can look up information about licence plate numbers. By keeping track of which numbers pop up in the database with "Tesla Model S" as a description - one can extrapolate registration figures fairly accurately.)

My guess is that we'll end up in the 1600-1650 area. (Weekends have been slower for registrations, and the cars would really need to be registered before 31. March if it is to be delivered that day.)

 

[Yggdrasill]

1600 was probably too optimistic. We probably won't see many more registrations than 1467. So far today there's been 1 new registration. I stopped by the service center earlier and the parking lot is emptying. See pictures here.

The blue Model S that's in the proces of being delivered was registered on thursday, so with ~2 days from registration to delivery, a Model S that is supposed to be delivered on monday will have to be registred today. (Maybe with fewer cars in the pipeline, they can push them out a bit faster, but still, we probaly aren't talking about very many cars remaining.)

 

[maoing]

1600 was probably too optimistic. We probably won't see many more registrations than 1467. So far today there's been 1 new registration. I stopped by the service center earlier and the parking lot is emptying. See pictures here.

The blue Model S that's in the proces of being delivered was registered on thursday, so with ~2 days from registration to delivery, a Model S that is supposed to be delivered on monday will have to be registred today. (Maybe with fewer cars in the pipeline, they can push them out a bit faster, but still, we probaly aren't talking about very many cars remaining.)

I didn't realized that registration should happen 1-2 days earlier than real delivery. Anyway even 1500 is a fatastic number IMO. I believe tesla service center will manage to kick out every possible delivery out of the door by 12am 04/01, every car counts in Q1 ER. Thanks again for first-hand report.

 

[hummingbird]

Thank you for your report from Germany Matthias !

FYI: I live near Palo Alto, California. Around here, more and more each month, the Model S and Nissan Leaf is popping up everywhere I look. Naturally Model S is the car everyone wants. In this area of the SF Bay Area I think we are getting to a situation where if someone was in the market for a high-end car north of USD$70,000, and if that person does not buy the Model S, he is going to look retarded. The situation is very similar to the Blackberry when the iPhone first came out on the AT&T network in the USA. Blackberry was a great device before the iPhone came out. But then very soon most AT&T Blackberry users switched to the iPhone and later Samsung. I think this is what's happening with high-end car buyers and owners. As soon as they acquire a good understanding of what the Model S is, an EV that's completely different & better than an ICE car, they will choose the Model S. I suspect Model X will do even better in 2015/2016.

The Model S is sold strictly by word-of-mouth. That's very powerful once it gets going. One tells 2, 2 tell 4, 4 tell 8, 8 tell 16, etc. I suspect the underlying true demand for the Model S is a very big number worldwide (Americas, Europe, Asia). No one knows for sure at the moment what that number is because the Model S is production constrained. I suspect the situation is very much like the old Blackberry vs. iPhone in 2007/2008/2009. A massive % of high-end car buyers and owners will switch to the Model S in the next few years if production can ramp up.

I agree with your father that the interior of the Model S is currently not good. However, if your father is in the market to buy a car next week, I suspect he will choose the Model S (because when all things are considered, the current Model S is better than any ICE car). I suspect the interior of the Model S will quickly improve by 2015/2016.

Just want to bring in my experience from Germany when it comes to Tesla perception. I talk a lot about the car with friends an family.

My Parents
Both of my parents drive an VW Phaeton and would be able to afford a Model S. My mother even considers to by one because she likes to be able to charge at home. But her concern at the moment is that the technology is relatively new and she rather wants to wait another two or three years to see if there are any downsides to the Tesla and to have a better availability of supercharging.

My dad is a quality fanatic. A major downside for him is the (perceived) inferior quality of the interior of the Model S as often reported in reviews. I heard Elon say that they are constantly working on that and also want to bring higher quality seating to the Model S. Maybe this will be a none issue in a few months. My dad also was concerned about the range and the charging time and taking detours to eventually drive by a supercharger. When I showed him the battery swap video he was speechless and I think this could be really an option here in Germany. We want to be able to drive 200 km/h and don't want to stop every hour to wait 20-30 minutes at a supercharger after that. This probably seems crazy to most of you (to be honest it is a bit crazy).

My Friends
When I talk to younger folks a bit more my generation 25-35 years, I see basically everyone is stunned by the car. But the price is out of range for most of them. Most of my friends buy used cars at a price point of around 10-15 €. There is a long way to go here before they are in the reach of a long range EV. But as they grow their income and prices for EVs drop this generation could be a huge market for Tesla, since they are already used to adopting new technology and almost none of them was really concerned with range or winter temperatures or anything like that.

Media
Another real problem here in Germany is that the EVs known to the public are not really compelling products. (Renault twizy (people make fun of), BWI i3 (ugly)) I think this will be solved only with more and more Teslas on the road and people getting to test drive the car. There is only one other person besides me that I know of who test drove a Model S yet. Tesla is getting way less free media coverage here in Germany than in the U.S. Of course that has many reasons. One of them is basically that you can't really write about the Model S without al least indirectly dissing the traditional German car makers for not being able to compete with a U.S. car startup in the most prestigious car segment. Since a lot of advertising money is changing hands between German car manufacturers and news publishers I would say there is a potential conflict of interest.

Internet
And then there is the general FUD throughout internet forums and comments. VolkerP already addressed that in his post. I think the only way to effectively overcome these things is to patiently address every one of these concerns over and over again and educate the public about the facts of Teslas approach to EV technology. I've learned that most of the people react quite surprised when they read about the actual facts of Teslas cars. Hopefully reason will eventually win over FUD.

My Car
I leased a almost fully equipped new Audi A5 just last week for another 4 years. Main reason for not buying a Model S was price. I leased the Audi A5 for about 24% below the list price (460 € p.m. including warranty, service, maintenance etc.). This is a common incentive for business clients with the major German manufacturers. Since we have no real EV incentives in Germany and no business incentives by Tesla I think price will stay the main reason for most people until GenIII. What happens when prices are not so much an issue with this car is basically what you see in Norway at the moment. Hopefully I will be one of the first GenIII reservation holders here in Germany.

P.S. I saw the first Model S in Germany on the Autobahn the day I picked up my new Audi at Neckarsulm (24-03-2014).

 

[TSLAopt]

Thank you for your report from Germany Matthias !

FYI: I live near Palo Alto, California. Around here, more and more each month, the Model S and Nissan Leaf is popping up everywhere I look. Naturally Model S is the car everyone wants. In this area of the SF Bay Area I think we are getting to a situation where if someone was in the market for a high-end car north of USD$70,000, and if that person does not buy the Model S, he is going to look retarded. The situation is very similar to the Blackberry when the iPhone first came out on the AT&T network in the USA. Blackberry was a great device before the iPhone came out. But then very soon most AT&T Blackberry users switched to the iPhone and later Samsung. I think this is what's happening with high-end car buyers and owners. As soon as they acquire a good understanding of what the Model S is, an EV that's completely different & better than an ICE car, they will choose the Model S. I suspect Model X will do even better in 2015/2016.

The Model S is sold strictly by word-of-mouth. That's very powerful once it gets going. One tells 2, 2 tell 4, 4 tell 8, 8 tell 16, etc. I suspect the underlying true demand for the Model S is a very big number worldwide (Americas, Europe, Asia). No one knows for sure at the moment what that number is because the Model S is production constrained. I suspect the situation is very much like the old Blackberry vs. iPhone in 2007/2008/2009. A massive % of high-end car buyers and owners will switch to the Model S in the next few years if production can ramp up.

I agree with your father that the interior of the Model S is currently not good enough. However, if your father is in the market to buy a car next week, I suspect he will choose the Model S (because overall the current Model S is better than any ICE car). I suspect the interior of the Model S will quickly improve by 2015/2016.

This is is good analysis from the most mature Model S market, Palo Alto. I was there a couple months ago and they were everywhere. I suspect 1-2 years from now where I live in the northeast, the wealthy areas will start looking like that too...there are still a lot of people convinced they need AWD here in the Northeast not realizing the S as is right now is actually still great in the snow.

Someone else on this board recently heard from a sales person that AWD will be able to be bought/retrofit into current the current S....I think that will be extremely popular to do if the price isn't too much (ie. Sub 8k)

 

[HenryF]

If somebody were to buy a Model S in Norway, take all the incentives, ship the car to say Germany and re-sell it there, will there be any profit?

 

[dirkhh]

The Germany discussion is re-hashing what has been discussed here several times over the last 6 months. The Model S is not competitive in Germany. Way too expensive, ridiculous range when driven at Autobahn speed, perceived inferior top speed, way too many small issues here and there and everywhere.
They'll sell a few hundred a year for the true believers in EVs - but without a massive change in range and top speed and without a strong subsidy they have no chance to reach the general public.

 

[Yggdrasill]

If somebody were to buy a Model S in Norway, take all the incentives, ship the car to say Germany and re-sell it there, will there be any profit?

No, the Model S isn't very much cheaper in Norway, you only save VAT, which you'll have to pay anyway when you import into Germany. Access to car pool lanes, cheap electricity, toll road fees exemption, etc obviously doesn't follow the car.

 

[perdru]

hummingbird wrote :
" The Model S is sold strictly by word-of-mouth. That's very powerful once it gets going. One tells 2, 2 tell 4, 4 tell 8, 8 tell 16, etc. I suspect the underlying true demand for the Model S is a very big number worldwide (Americas, Europe, Asia). "

Tesla´s non-advertising concept is probably still applied in the US - in Europe , particularly in Norway they advertise.

 

[Thomas_K]

To boost EU sales Tesla needs to get Superchargers in Denmark and southern Sweden up and running before june. They need to efficiently connect Norways Superchargers to the existing ones in EU. The latest maps indicate some coverage in Denmark by mid 2014, but only as far south as Gothenburg in Sweden. The distance between Gothenburg and Copenhagen needs to be covered too. They are expecting people to take a ferry from Gothenburg SE to Fredrikshavn DK. This is not a good solution. I hope they are not underestimating the comercial value of 4000+ norwegian Model S hitting central europe for summer vacation.

Supercharger maps from 24:38:
Tesla Motors Scandinavian Director at Learning to work differently with strategy - YouTube

 

[Right_Said_Fred]

Let's face it: Germany is not going to do it for Tesla in the coming 2-3 years. But that isn't such a big deal, as the US, China en some smaller EU-countries will sweep up all Model S and Model X production capacity at Freemont anyway.

Why Germany will not be a success right now:

- Germans are a bit boring in their car choice (sorry, no offense meant) and don't mind driving the same model Audi, Mercedes, BMW or Porsche that half the country is driving. No urge to stick out of the crowd (except for some tuning enthousiasts).

- Germans prefer to buy home-made cars and have a lot of home-made brands to choose from. Many foreign brands suffer from this, not just Tesla. Volvo also hasn’t been able to gain a foothold and the same goes for Italian, French and Asian brands.

- American cars have an image of bad quality. Even if the Model S is of high quality (still some improvement needed), Tesla would still suffer from this image.

- Many Germans think they need a car that can easily drive 200+ km for hours, while in practice only a small percentage of car owners actually drives that fast. And more and more highways have speed limits anyway. But it's a lingering ‘need’, just like many Americans feel the ‘need’ to have a gun to protect themselves (but will never actually need it).

- Germans are wary of EV's, which is an image problem. Until now EV’s were almost always small cars with little range.

- There are no EV-incentives. Ofcourse it isn't hard to see why: incentives don't favor the German car industry, which doesn’t have many EV’s yet. Anything that hurts the German car industry, which employs millions directly and indirecty, is off limits. It’s a bit of a hypocrisy ofcourse: spending tens of billions on subsidies for windmills and solar panels which now cover the country, but not doing much against polluting cars (actually even trying to sabotage European legislation which put limits on CO2-output). But then, solar panels are being made in Germany and clean cars aren’t. And unfortunately most people need incentives before they do anything ‘green’ (not just in Germany by the way). Subsidies on solar panels are/were actually so generous you could make a profit, so you can now find villages where half the houses are covered with solar panels, and some houses even have panels on the walls.

It would be a good thing if German car companies would introduce more clean cars, hopefully forced upon them by European regulation (which has in the end passed, albeit in a somewhat watered down version). Maybe that finally opens the door for some more stimulus.

Footnote: I spend a lot of time in Germany, my business depends on Germans, so I believe I know them reasonably wel. They are lovely, sweet people (as long as you avoid the ‘formal’ ones). 

 

[HenryF]

Can someone fix the title of this thread please? It's giving me a sore eye. Thanks

 

[hummingbird]

Thank you for explaining this view from Germany RSF. That makes sense. Jobs are very important. Culture is too. I suspect one day soon, somewhere sub $200/kWh battery cost, the EV industry in Germany will turn. When it does, Germany will move very quickly as a nation. The tipping point is not too many years away. Sub $200 is coming for sure. At sub $150, it's all over for ICE and big oil.

Question: currently, do you see any Nissan LEAFs in German cities at all?

It's interesting to note Elon Musk recently commented that he expects the Model S to do well in Germany because Germans bought the most number of Roadsters behind Americans. Perhaps those are simply enthusiasts.

Let's face it: Germany is not going to do it for Tesla in the coming 2-3 years. But that isn't such a big deal, as the US, China en some smaller EU-countries will sweep up all Model S and Model X production capacity at Freemont anyway.

Why Germany will not be a success right now:

- Germans are a bit boring in their car choice (sorry, no offense meant) and don't mind driving the same model Audi, Mercedes, BMW or Porsche that half the country is driving. No urge to stick out of the crowd (except for some tuning enthousiasts).

- Germans prefer to buy home-made cars and have a lot of home-made brands to choose from. Many foreign brands suffer from this, not just Tesla. Volvo also hasn’t been able to gain a foothold and the same goes for Italian, French and Asian brands.

- American cars have an image of bad quality. Even if the Model S is of high quality (still some improvement needed), Tesla would still suffer from this image.

- Many Germans think they need a car that can easily drive 200+ km for hours, while in practice only a small percentage of car owners actually drives that fast. And more and more highways have speed limits anyway. But it's a lingering ‘need’, just like many Americans feel the ‘need’ to have a gun to protect themselves (but will never actually need it).

- Germans are wary of EV's, which is an image problem. Until now EV’s were almost always small cars with little range.

- There are no EV-incentives. Ofcourse it isn't hard to see why: incentives don't favor the German car industry, which doesn’t have many EV’s yet. Anything that hurts the German car industry, which employs millions directly and indirecty, is off limits. It’s a bit of a hypocrisy ofcourse: spending tens of billions on subsidies for windmills and solar panels which now cover the country, but not doing much against polluting cars (actually even trying to sabotage European legislation which put limits on CO2-output). But then, solar panels are being made in Germany and clean cars aren’t. And unfortunately most people need incentives before they do anything ‘green’ (not just in Germany by the way). Subsidies on solar panels are/were actually so generous you could make a profit, so you can now find villages where half the houses are covered with solar panels, and some houses even have panels on the walls.

It would be a good thing if German car companies would introduce more clean cars, hopefully forced upon them by European regulation (which has in the end passed, albeit in a somewhat watered down version). Maybe that finally opens the door for some more stimulus.

Footnote: I spend a lot of time in Germany, my business depends on Germans, so I believe I know them reasonably wel. They are lovely, sweet people (as long as you avoid the ‘formal’ ones). 

 

[Right_Said_Fred]

Thank you for explaining this view from Germany RSF. That makes sense. Jobs are very important. Culture is too. I suspect one day soon, somewhere sub $200/kWh battery cost, the EV industry in Germany will turn. When it does, Germany will move very quickly as a nation. The tipping point is not too many years away. Sub $200 is coming for sure. At sub $150, it's all over for ICE and big oil.

Question: currently, do you see any Nissan LEAFs in German cities at all?

It's interesting to note Elon Musk recently commented that he expects the Model S to do well in Germany because Germans bought the most number of Roadsters behind Americans. Perhaps those are simply enthusiasts.

There aren't many EV's around. I believe there are only about 1,000 Leafs in what is a very big country. The Smart EV did better, but distinguishing it from a regular Smart isn't easy.

I always had my doubts about Elons argument that the Roadster did well in Germany and that therefore the Model S should too. First of all, the Roadster really didn't do that well. Less than 200 cars were sold in three years time. And the Roadster wasn't competing in a highly competitive part of the market, the Model S is.

I hope that in a few years time big European countries like Germany, France and Italy will become more EV-minded. In accomplishing that a solid supercharging infrastructure might be even more helpful than a lower kWh-price for the batteries.

 

[SebastianR]

There aren't many EV's around. I believe there are only about 1,000 Leafs in what is a very big country. The Smart EV did better, but distinguishing it from a regular Smart isn't easy.

Watch for the i3 sales in Germany, they are amazingly strong (if the rumors are true) but of course nowhere near the sales numbers for a Golf.

I think what is missing in the list of reasons mentioned above is the company car policies/incentives. A large majority of cars in the BMW 5 series / E-Class / Audi A6 are company cars. This means that Tesla needs to break into oftentimes decades old agreements between specific suppliers and companies before their cars can be offered to employees.

A friend of mine once wanted a higher level Lexus but ended up with an Audi due to established supplier agreements...

Anyways, I think it is way to soon to tell for Germany: Germans are very conservative/slow. It took years before people started to buy iPhones after the rest of the world bought them in masses

 

[mrdoubleb]

Watch for the i3 sales in Germany, they are amazingly strong (if the rumors are true) but of course nowhere near the sales numbers for a Golf.

I think what is missing in the list of reasons mentioned above is the company car policies/incentives. A large majority of cars in the BMW 5 series / E-Class / Audi A6 are company cars. This means that Tesla needs to break into oftentimes decades old agreements between specific suppliers and companies before their cars can be offered to employees.

A friend of mine once wanted a higher level Lexus but ended up with an Audi due to established supplier agreements...

Anyways, I think it is way to soon to tell for Germany: Germans are very conservative/slow. It took years before people started to buy iPhones after the rest of the world bought them in masses

At this point, strong i3 sales in Germany do much more good than harm as it legitimates EVs and accelerates the bildout of charging infrastructure.

 

[Auzie]

Watch for the i3 sales in Germany, they are amazingly strong (if the rumors are true) but of course nowhere near the sales numbers for a Golf.

I think what is missing in the list of reasons mentioned above is the company car policies/incentives. A large majority of cars in the BMW 5 series / E-Class / Audi A6 are company cars. This means that Tesla needs to break into oftentimes decades old agreements between specific suppliers and companies before their cars can be offered to employees.

A friend of mine once wanted a higher level Lexus but ended up with an Audi due to established supplier agreements...

Anyways, I think it is way to soon to tell for Germany: Germans are very conservative/slow. It took years before people started to buy iPhones after the rest of the world bought them in masses

Similar situation in Australia, many people drive 'company cars'. Most of these cars are leased by employer and provided to employees under various financial arrangements. Petrol card is part of the deal. The employer is often in control of selection of lease cars models. Some employers do not have any restrictions, ie employees can lease any models they choose. Some employers with large fleets make a conscious choice to incentivize 'green cars' in order to reduce their carbon footprint. In my view, company policies regarding lease models selection is more likely to be favourable to Tesla than not.

 

[AustinPowers]

I think what is missing in the list of reasons mentioned above is the company car policies/incentives. A large majority of cars in the BMW 5 series / E-Class / Audi A6 are company cars. This means that Tesla needs to break into oftentimes decades old agreements between specific suppliers and companies before their cars can be offered to employees.

Quite right. I can see the same thing at my company. The fleet management has been outsourced years ago, and the supplier doesn't offer any EV's in its lineup.

I agree with hummingbird that battery prices are key. As soon as EVs become competitive price-wise, they will find many buyers even here in Germany.

One other thing about prices by the way (which I think hasn't been mentioned before in this thread): Germans like to bargain when it comes to cars. Most people who buy cars see it as kind of a competition "who gets the best deal / biggest bargain". Almost no one pays the list price. They go to the dealer, configure their car of choice, and then negotiate a price, which normally ends somewhere between 10 and 25 percent below list price - depending on the popularity of the model. About 15% on average seems realistic.
Now imagine such a German buyer coming to Tesla. He configures a Model S, then asks about the price (expecting to be able to negotiate), but Tesla says "no way, list price is final price". I am sure quite a few people will be put off by that and rather turn to an alternative manufacturer (unless they absolutely want an EV or especially a Model S).

Oh and I looked up the numbers from the KBA (official body for car registrations in Germany): there were 30 Model S registered in January, and 66 in February this year.

 

[Yggdrasill]

How do the company car programs work in Germany? Are all costs covered by the company, so that fuel and maintenance savings benefit the company, or do these savings benefit the user?

If the former is correct - then EVs will need to be cheaper at purchase than fossil equivalents, to entice the companies to include the EVs in the company car program. If the latter is correct - that benefits EVs, as a company will be able to include maintenance costs and fuel costs in their calculations to arrive at a favourable TCO analysis.