EU Market Situation and Outlook

[DaveT]

While most people on this thread appear to be pessimistic on Europe sales in the next couple years, I'm thinking sales will pick up as more service centers, stores and superchargers open up this later this year.

While there are notable challenges as discussed in this thread, Tesla has already secured their European "beachhead" in Norway that will allow them to spread into other European countries.

Service Centers in Europe
19 currently
23 coming soon

Stores in Europe
28 currently
18 coming soon

Superchargers in Europe
14 currently
? coming soon (my guess is that Tesla opens 20-40 new superchargers this year in Europe)

 

[DaveT]

Note: I use the term "beachhead" as referred to by Geoffrey Moore in his book, Crossing the Chasm. He lays out how new technology is adopted and asserts that in early stages it's essential to secure a "beachhead" (ie, Normandy was a beachhead into Europe during WWII). Facebook used this "beachhead" strategy by going after college campuses to establish a secure base in their efforts against MySpace. Once the college campuses fell to Facebook, FB was able to expand more easily to other target segments. In a similar way, the key to Tesla in Europe is establishing a beachhead by winning the hearts and minds of a target segment in one country (ie, Norway). From there, Tesla can use their success in Norway to expand their presence. Enthusiastic adoption in Norway is important because it rebuts the doubts and reservations that people will have in other European countries, thus speeding up the rate of adoption when Tesla expands into these countries.

 

[hobbes]

Enthusiastic adoption in Norway is important because it rebuts the doubts and reservations that people will have in other European countries, thus speeding up the rate of adoption when Tesla expands into these countries.

That makes a lot of sense to me, seems like a good strategy. Too bad Germany can´t be the beachhead.

It would be interesting to compare the curves for Model S sales over time for the US and Europe and see when you shift it by say a year, if they are so much different.

 

[dirkhh]

That makes a lot of sense to me, seems like a good strategy. Too bad Germany can´t be the beachhead. .

The difference is that in Norway there is no domestic auto industry to protect. There is no collective ego that domestic cars are the best in the world. There is no domination of the "luxury sedan" segment by "company cars" that tend to be leased from Audi, BMW or Mercedes.
I remember when I grew up that for the parking lot of the biggest local car part supplier (and largest local employer in my home town) there was an unwritten but strictly enforced rule that the "on site" parking lot was off limits for non-German cars. People who stooped down to driving and import had to park across the six lane street and enter the campus on foot. I don't think something as drastic as this still exists, but I believe the underlying attitude is still around.

But let's look at some hard numbers that I found with a few minutes of googling:
In Germany in 2013 Lexus sold 1,653 cars - compared to Mercedes 277,373, Audi 251,952, and BMW 231,851. And Lexus has been selling in Germany for 24 years.
Now compare this with the US: Lexus: 273,847, Mercedes 312,534, Audi 158,061, BMW 309,280

So in the US market the four are about on par (within a factor of 2), whereas the foreign brand Lexus is THREE ORDERS OF MAGNITUDE behind in Germany.

So no, forget about Germany. Really. Seriously. Just forget about it. There will be 80 cars a month. Maybe a hundred. Maybe they can outsell Lexus and get to 150 cars a month. But it will be nothing more than a footnote. And if Lexus' example is any guidance, it will be a footnote for decades to come.

 

[AustinPowers]

The difference is that in Norway there is no domestic auto industry to protect. There is no collective ego that domestic cars are the best in the world. There is no domination of the "luxury sedan" segment by "company cars" that tend to be leased from Audi, BMW or Mercedes.
I remember when I grew up that for the parking lot of the biggest local car part supplier (and largest local employer in my home town) there was an unwritten but strictly enforced rule that the "on site" parking lot was off limits for non-German cars. People who stooped down to driving and import had to park across the six lane street and enter the campus on foot. I don't think something as drastic as this still exists, but I believe the underlying attitude is still around.

But let's look at some hard numbers that I found with a few minutes of googling:
In Germany in 2013 Lexus sold 1,653 cars - compared to Mercedes 277,373, Audi 251,952, and BMW 231,851. And Lexus has been selling in Germany for 24 years.
Now compare this with the US: Lexus: 273,847, Mercedes 312,534, Audi 158,061, BMW 309,280

So in the US market the four are about on par (within a factor of 2), whereas the foreign brand Lexus is THREE ORDERS OF MAGNITUDE behind in Germany.

So no, forget about Germany. Really. Seriously. Just forget about it. There will be 80 cars a month. Maybe a hundred. Maybe they can outsell Lexus and get to 150 cars a month. But it will be nothing more than a footnote. And if Lexus' example is any guidance, it will be a footnote for decades to come.

Good point. But still I think it is also about price, especially when you compare Norway and Germany.
Model S is a bargain in Norway, compared to its competition. In Germany Model S is quite good value for money as far as EVs are concerned, yet it is not a bargain by any means, not even when compared to its nearest competitors like the greenest versions of the 5-series, A6/7 or E-class.

But I am quite confident that Tesla will eventually outsell Lexus over here. The main problem with Lexus in Germany is, that a Lexus generally is perceived as an overpriced Toyota. And people think "why buy a luxury Japanese car when you can get a German one" - true, when it comes to cars we are patriots. Plus, a Lexus is no good when you want to impress your neighbours, colleagues etc. They will go "oh, so he want's to own an upper-class car but can't afford a proper one, so he bought a Lexus instead." :wink:

 

[glemmestad]

quoted from http://seekingalpha.com/user/2372261/instablog

A person tracking new car registrations via official channels have confirmed that until yesterday (24. March) a total of 898 Model S have been registered in Norway in March. Today, at 8pm, there had been another 177 Model S registered, bringing the total for the Model S so far to 1075.
Some owners who have yet to receive their cars have reported that their deliveries are now scheduled for Saturday, which means that the deliveries are probably planned to continue at the same pace on Wednesday, Thursday, Friday and parts of Saturday (and possibly Monday).
If we take a closer look at the numbers, they should be at least as follows for Q-on-Q growth:
Q4: October/November/December 2013: 98/527/553 = 1178 cars
Q1: January/February/March 2014: 132/431/1075+ = 1638+ cars
That is a Q-on-Q growth of at least 39% in the first quarter from the forth quarter (which was the first quarter of Tesla Model S deliveries in Norway).

Really amazing Noway sales in Q1!

That's actually my Seeking Alpha article. Since, the deliveries have continued

We registered 1491 cars in March. That's higher than any other month in history, ever; not by EVs... but by ANY car.
For Q1 2014 the total is now at 2054 cars, representing a 77% increase from Q4 2013.

Norway loves Tesla.

How are the deliveries in the Netherlands and Germany going? When can we get accurate numbers out of there?

 

[Ole]

1491 Model S sold in Norway in March, a new record. No other car model has ever sold that many in one month.

I would say that Tesla is well established in Norway.

 

[perdru]

1491 Model S sold in Norway in March, a new record. No other car model has ever sold that many in one month.

I would say that Tesla is well established in Norway.

It would be interesting to know TMS US sales this month ; anyone ?

 

[dirkhh]

It would be interesting to know TMS US sales this month ; anyone ?

Given that they make 600-700 Model S a week this sounds like it would be more than 50% of total production (and yes, of course, sales in Norway are time-offset because of shipping time... so the comparable month most likely would be February).

 

[Auzie]

Note: I use the term "beachhead" as referred to by Geoffrey Moore in his book, Crossing the Chasm. He lays out how new technology is adopted and asserts that in early stages it's essential to secure a "beachhead" (ie, Normandy was a beachhead into Europe during WWII). Facebook used this "beachhead" strategy by going after college campuses to establish a secure base in their efforts against MySpace. Once the college campuses fell to Facebook, FB was able to expand more easily to other target segments. In a similar way, the key to Tesla in Europe is establishing a beachhead by winning the hearts and minds of a target segment in one country (ie, Norway). From there, Tesla can use their success in Norway to expand their presence. Enthusiastic adoption in Norway is important because it rebuts the doubts and reservations that people will have in other European countries, thus speeding up the rate of adoption when Tesla expands into these countries.

It is interesting that you link a book to a new technology spread, I do the same but with a different book. I listened to Malcolm Gladwell's 'The Tipping Point' some months ago. His thesis: "Ideas, products, messages and behaviors spread like viruses do."

The spread of awareness of ev technology fits very well into this thesis.

The book postulates that the ideas or products that are subject to tipping point must be sticky. There is no doubt in my mind of the "stickiness" of this particular product, Tesla cars.

My favourite expectation for Tesla is:"The tipping point is that magic moment when an idea, trend, or social behavior crosses a threshold, tips, and spreads like wildfire. Just as a single sick person can start an epidemic of the flu, so too can a small but precisely targeted push cause a fashion trend, the popularity of a new product, or a drop in the crime rate."

 

[RationalOptimist]

"Norway is to Europe as California is to US." Discuss.

 

[Auzie]

"Norway is to Europe as California is to US." Discuss.

I do not really see it that way. Main reason: European countries are far more diverse than US, economically, culturally and technologically. Europeans speak numerous funny languages, and Norway is just one of the many unique European cultures. Also somewhat larger cultural intolerance in Europe might impede the spread of ideas or products across countries.

 

[Adm]

Situation in the Netherlands was funny in 2014. A serious tax break changed into a reasonable tax break on december 31st 2013 resulting in a rush of Model S deliveries before that date and a serious slow down after that. After 1200 deliveries in 2013 just 17 cars were delivered in January and February. As I expected deliveries picked up again to 190 cars in March.

In perspective:

Audi A6/7/8: 188
BMW 5/6/7: 241
Jaguar all: 18
Lexus all: 104
Maserati: 5
MB E/CLS/S: 195
Porsche all: 88

I have to assume those dealers are a little bit envious. I think they should be concerned what will happen when Model E comes to Europe.

 

[Yggdrasill]

"Norway is to Europe as California is to US." Discuss.

I think that view is somewhat accurate. Europe is certainly quite diverse, but so is the US. The US doesn't have an offical language, it consists exclusively of cultural minorities, each state has a substantial degree of autonomy, there are significant differences in prosperity between the different states, etc.

It obviously doesn't capture the whole situation, as no 9-word sentence could, but it does capture some similarities. One difference is that California is the most populous state in the US, compared to Norway, which is one of the smalles countries in Europe. California is also the base of operations for Tesla, in that they have both their headquarter there, and their factory.

I'm not sure to what extent one can hope that sales in Norway will rub off on the rest of Europe, but what is certainly true is that the sales in Norway makes expansion into the rest of Europe that much easier. Consider the alternative, if Norway taxed electric cars equally to fossil cars, Tesla would probably sell something like 10-20 Model S in Norway annually. That would be a quite acceptable market share in that price range. With something like 5000 fewer sales in Europe per year, investments into superchargers, homologation, service centers, logistics, etc would be that much harder to justify. Without Norway, Tesla might have been forced to write off Europe for the first few years, drop homologation, Mennekes-plug adaptation, Euro NCAP, etc, and simply focus on the US and China. With Norway, they were going to go into Europe at (almost) any cost, so their investements could as well be directed at all of Europe from the start.

 

[Mario Kadastik]

"Norway is to Europe as California is to US." Discuss.

Well Tesla sales wise maybe. But I know that Estonia is quite often referred to as Silicon Valley of Europe because of the huge amount of startups per capita including major percentage of successful ones. I think simply listing a few like Skype, TransferWise, GrabCad, Playtech, Click & Grow, ERPLY, Fits.me and so on... (sample list: Garage48 HUB - coworking space for tech startups in central Tallinn, Estonia | Estonian Startups). Even a term was coined #EstonianMafia because the percentage of estonian startups that got funded at various accelerators etc was so much higher that it really is competing with major players like US.

We've also got quite a good charging infrastructure and subsidies. I think the real big blocker for adoption of Teslas has been the lack of possibility to finance it. You have to buy the car outright, get it to country and ONLY THEN can you finance it. This blocks 99% of the people who could easily buy Model S's and therefore the uptake has been relatively low as of now. However I hope that this changes soon and the moment it does the floodgates open (my hope)

Anyway, you can refer back to my #2 post in this thread, just had to comment on the Californian comparison

 

[schonelucht]

Situation in the Netherlands was funny in 2014. A serious tax break changed into a reasonable tax break on december 31st 2013 resulting in a rush of Model S deliveries before that date and a serious slow down after that. After 1200 deliveries in 2013 just 17 cars were delivered in January and February. As I expected deliveries picked up again to 190 cars in March.

Also 1Q2014 was one of the worst quarters for the Dutch carmarket in decades. Going forward we should expect Tesla to sell at least 200 cars per quarter in the Netherlands with the Model S.

 

[dalalsid]

Situation in the Netherlands was funny in 2014. A serious tax break changed into a reasonable tax break on december 31st 2013 resulting in a rush of Model S deliveries before that date and a serious slow down after that. After 1200 deliveries in 2013 just 17 cars were delivered in January and February. As I expected deliveries picked up again to 190 cars in March.

In perspective:

Audi A6/7/8: 188
BMW 5/6/7: 241
Jaguar all: 18
Lexus all: 104
Maserati: 5
MB E/CLS/S: 195
Porsche all: 88

I have to assume those dealers are a little bit envious. I think they should be concerned what will happen when Model E comes to Europe.

Are these March sales or Q1 sales for the others?

 

[Adm]

Are these March sales or Q1 sales for the others?

March sales vs March sales

 

[dalalsid]

March sales vs March sales

Thanks! Where do you get this data?

 

[Yggdrasill]

The official figures for Norway just came in. It ended up at 1493, exactly the same as the unofficial numbers. Tesla was the second largest car maker in Norway in March, only beaten by Volkswagen, and the sixt largest car maker thus far this year, beaten by Volkswagen, Toyota, BMW, Nissan and Volvo, in that order.

The Model S is the most sold car model both this month and thus far this year, with respectively 1493 and 2056 sold. Market share ended up at 10.8% this month and 5.6% thus far this year.

Electric cars ended up with 20.3% market share this month, with 2813 sales, aided by the Nissan Leaf selling 425, the VW e-Up! selling somewhere around 400 (they don't seperate between the electric version and the gasoline version), and the BMW i3 selling 336. 20.3% market share is an increase of 720% from March 2013, where electric cars had a 3.2% market share.

Insane Tesla Record
Tesla crushes all - historic record in March
Crazy Tesla record!

Also FUD:
Clear breaches of the Working Environment Act