Good read, good points.
Are Tesla's Electric Cars 'Niche Vehicles?' Is Your Gas-Powered Car One Too? - Forbes
Are Tesla's Electric Cars 'Niche Vehicles?' Is Your Gas-Powered Car One Too? - Forbes
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adiggs
Well-Known Member
OMG - that author gets it. I like how he's started this series off and where's obviously going with it.
Part 2 is even better. He addresses some of the recent criticisms head on (referencing both Broder's and the blog of an S owner who had an ordeal traveling in the frigid Midwest).
Tesla: Getting There Slowly or Already Arrived? - Forbes
Tesla: Getting There Slowly or Already Arrived? - Forbes
highfalutintodd
Member
Very nicely done articles. Nuanced, thoughtful, insightful, compelling, and well-reasoned. Too bad that will mean that it will probably only be read by the people that frequent this forum. ;-)
SByer
'08 #383
Wow, I saw Forbes, and.. well, I assume we all thought the same thing. Nicely done. Nice bit about the SF-south commute (I got to work this morning at 9:30 and almost all the charging spots at my building were filled - I didn't 'need' to, of course, but, well, free juice...).
Yes I read the SF scenario and thought 'you're making a good case for a Volt'. It's basically what I do each day.
Suzieq
Member
Mycroft
Life happens
JRP3
Hyperactive Member
Great follow-up piece by Forbes (makes me feel good having such a stake in TSLA too)... especially like the metrics showing parallels between Tesla's potential growth trajectory and Prius ("barely 20k cars in year #1 and now over 200k"), serious growth is on the horizon as long as the Broders of the world pipe down a bit.
JRP3
Hyperactive Member
I'm conflicted about it. On the one hand I hope it's sooner so I can get one, on the other hand I think it might be better for Tesla, and me as an investor, if it's delayed since it will probably end up taking away sales from the more profitable Model S. Plus I don't know if 2015 gives us enough time for battery technology to provide the range and pricing needed for Gen3.
Mycroft
Life happens
I agree TW. I'm expecting 2017 just like I expected mid-2014 for the X when it was announced to begin Dec 2013.
If battery technology improves sufficiently, then I'd expect Tesla to begin deliveries of a Gen3 car in late 2015, roughly two years after the release of the Model X -- which is itself slated to begin deliveries roughly 18 months after the Model S did. Tesla will want to show momentum, for one. They will also want to attack a broader market base and introducing a new chassis is a key step for that. Even if the profit on the car is 1/3 or 1/5 what they make on the Model S, the production volumes are expected to be nearly 10x greater so the absolute profit brought in would be greater for the Gen3 than for prior cars. If those assumptions all hold true.
Note that the high production volumes also mean that Gen3 will seriously dilute the pro rata share of marketing, administrative, and operational expenses for Tesla in a big way, actually thus increasing the profitability of every model in the product line.
Gen3 is aimed at taking market share away from other manufacturers. The Gen3 will not be taking any substantive number of sales away from the Model S, just like having a Series 3 BMW does not imperil sales of the Series 5. They are different vehicles aimed at different customers: he/she who buys a $40,000 Gen3 is very rarely able to buy a $70,000 Model S, and he/she who is able and willing to buy a $70,000 Model S is rarely interested in getting a significantly smaller car. Finally, even if the Gen3 did cannibalize any reasonable fraction of the Model S potential sales growth, it's a well-proven concept that it's better for the company to cannibalize itself than to have someone else do it for them.
Only Tesla can figure out when battery technology will be ready for what they feel is the right feature mix and projected range vs purchase price for the Gen3. Webesee.
Note that the high production volumes also mean that Gen3 will seriously dilute the pro rata share of marketing, administrative, and operational expenses for Tesla in a big way, actually thus increasing the profitability of every model in the product line.
Gen3 is aimed at taking market share away from other manufacturers. The Gen3 will not be taking any substantive number of sales away from the Model S, just like having a Series 3 BMW does not imperil sales of the Series 5. They are different vehicles aimed at different customers: he/she who buys a $40,000 Gen3 is very rarely able to buy a $70,000 Model S, and he/she who is able and willing to buy a $70,000 Model S is rarely interested in getting a significantly smaller car. Finally, even if the Gen3 did cannibalize any reasonable fraction of the Model S potential sales growth, it's a well-proven concept that it's better for the company to cannibalize itself than to have someone else do it for them.
Only Tesla can figure out when battery technology will be ready for what they feel is the right feature mix and projected range vs purchase price for the Gen3. Webesee.
JRP3
Hyperactive Member
I disagree somewhat. A number of S buyers have stated they've never spent that much on a car before, they are reaching to afford it. If the G3 were available they'd probably have bought that instead. I'm sort of in the same boat, I could afford the base S though it wouldn't make much sense for me and would be a stretch, and it's just a larger car than I want, so I'm waiting for the G3. I have no doubt the G3 will take some S sales.
Some, yes. Of course. But let's define our terms to see if we agree or not. For example: when I say that Gen3 "...will not be taking any substantive number of sales away from the Model S...", what I am saying is that I fully expect Tesla to continue to be able to sell out its full planned annual production of 20,000 Model S sedans despite the additional offering of a Gen3 vehicle. Maybe they could have sold 25,000 or 30,000 and then lost some potential S sales because customers chose Gen3... but in the end, I think Tesla will still sell all the Model S sedans they choose to make.
In that case, the customer is happier because he/she bought the car (S or G3) that best fits his/her needs, and has a greater chance of being a satisfied customer who refers others, is a repeat customer, and generally has a positive experience and relationship with Tesla. Tesla sells more cars and makes more absolute money even if the margin per car decreases somewhat.
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