Model X Mid-Term Impact on TSLA

[smorgasbord]

First, does anyone know what the best selling Caddy was last year?

Is was the Escalade Platinum. This model starts at $91K. The article, which is very positive admits: "This big boy weighs 7,300 pounds. It’ll get there when it gets there."

Does anyone know what kind of gas mileage that beast gets?

Officially it's 15 city, 21 highway, but Autoweek struggled to get 14 combined!

A Model X will save about $2500 in gas a year (12K miles, $3/gallon).


It strikes me that Model X will decimate Escalade Platinum sales next year. Even the far cheaper Mercedes GL-class will suffer, I believe. There have got to be lots of people driving mid to high price SUVs that would really like to be ecological about it. Just as we've seen sedan buyers step up to buy a far more expensive car than they've ever bought before in the Model S, I believe we're going to see many SUV buyers step up to get a Model X.

Hop aboard the WayBack machine and look at what we saw with Model S:
1) Status conscious people trading in their BMWs, Audis, and Mercedes for the Tesla.
2) Ecologically conscious people trading in their Priuses and other hybrids for the Tesla.
3) Regular people trading in their Camrys and Accords and stepping up to the Tesla.

I think Model X is going to amplify all that. I believe there are lots of people driving big SUVs that feel bad about all the gas they consume and pollution they create. The Model X lets them have the size, driver visibility, and bad road condition handling they want in a vehicle without the guilt. Not to mention mini-van owners that would like something better.

Escalade, Mercedes GL, Audi Q7, Range Rover, etc. owners are easy targets. The Model X is far cooler, will drive and handle better, and will impact planet earth less. Whether it's the status of driving a Tesla, ability to take the carpool lane home after dropping the kids off at school, or just saving $25K after 10 years, this is low-hanging fruit for Tesla.

And I believe just as we've seen Toyota and Honda buyers step up for Model S, we'll see Toyota and Honda buyers step up for Model X. And don't forget all those "practical" mini-van owners - a number of them will be eyeing the Model X, too.


Finally, there's an interesting human perception issue with expensive cars vs expensive gas. As much as you have and spend on a car, it hurts to be spending more than $100 at a fill-up every week (or less). A 2500 mile road trip in a big SUV will cost you upwards of $500 - Tesla's free supercharging makes a big perceptual difference.

Status and practicality without guilt. That's a recipe for success in my book. TSLA will be over $300 by Aug next year, and $350 isn't unlikely.

 

[blakegallagher]

First, does anyone know what the best selling Caddy was last year?

Is was the Escalade Platinum. This model starts at $91K. The article, which is very positive admits: "This big boy weighs 7,300 pounds. It’ll get there when it gets there."

Does anyone know what kind of gas mileage that beast gets?

Officially it's 15 city, 21 highway, but Autoweek struggled to get 14 combined!

A Model X will save about $2500 in gas a year (12K miles, $3/gallon).


It strikes me that Model X will decimate Escalade Platinum sales next year. Even the far cheaper Mercedes GL-class will suffer, I believe. There have got to be lots of people driving mid to high price SUVs that would really like to be ecological about it. Just as we've seen sedan buyers step up to buy a far more expensive car than they've ever bought before in the Model S, I believe we're going to see many SUV buyers step up to get a Model X.

Hop aboard the WayBack machine and look at what we saw with Model S:
1) Status conscious people trading in their BMWs, Audis, and Mercedes for the Tesla.
2) Ecologically conscious people trading in their Priuses and other hybrids for the Tesla.
3) Regular people trading in their Camrys and Accords and stepping up to the Tesla.

I think Model X is going to amplify all that. I believe there are lots of people driving big SUVs that feel bad about all the gas they consume and pollution they create. The Model X lets them have the size, driver visibility, and bad road condition handling they want in a vehicle without the guilt. Not to mention mini-van owners that would like something better.

Escalade, Mercedes GL, Audi Q7, Range Rover, etc. owners are easy targets. The Model X is far cooler, will drive and handle better, and will impact planet earth less. Whether it's the status of driving a Tesla, ability to take the carpool lane home after dropping the kids off at school, or just saving $25K after 10 years, this is low-hanging fruit for Tesla.

And I believe just as we've seen Toyota and Honda buyers step up for Model S, we'll see Toyota and Honda buyers step up for Model X. And don't forget all those "practical" mini-van owners - a number of them will be eyeing the Model X, too.


Finally, there's an interesting human perception issue with expensive cars vs expensive gas. As much as you have and spend on a car, it hurts to be spending more than $100 at a fill-up every week (or less). A 2500 mile road trip in a big SUV will cost you upwards of $500 - Tesla's free supercharging makes a big perceptual difference.

Status and practicality without guilt. That's a recipe for success in my book. TSLA will be over $300 by Aug next year, and $350 isn't unlikely.

I agree that many people will opt for Model X, There are many familes that require a SUV and by definition they have in the past had bad gas mileage. The fuel cost savings factor will play in more when comparing the X to other SUV's than it does with the Model S for sure.

 

[anticitizen13.7]

It strikes me that Model X will decimate Escalade Platinum sales next year. Even the far cheaper Mercedes GL-class will suffer, I believe. There have got to be lots of people driving mid to high price SUVs that would really like to be ecological about it. Just as we've seen sedan buyers step up to buy a far more expensive car than they've ever bought before in the Model S, I believe we're going to see many SUV buyers step up to get a Model X.

Along the same line of thought, I suspect that Model X is going to steal a significant number of sales from the mid-size luxury SUV market. There are people who drive something like a Lexus RX or an Acura MDX who may be willing to pay significantly more than what they've paid in the past in order to drive a Tesla.

The newest RX and MDX hover around 20 MPG City, 27/28 Highway, and older ones are a few MPG lower. People who use these types of vehicles for "soccer mom" duties are going to spend a lot less on "fuel" by going to a Model X.

 

[RobStark]

I don't know how many sales Model X will take from Escalade.

Escalade is a proper truck based body on frame SUV. These Platinum customers could have purchased a Porsche crossover but chose not too. Either because they need the towing, the gargantuan interior and payload or they like the idea of being wasteful and thumbing their noses at environmentalist and environmentalism.

I think Model X is going to kill Porsche Cayenne, Mercedes ,BMW,Audi,Lexus,and Infiniti CUVs "crossovers" as well as the new Cadillac and Lincoln crossovers.

Eventually, it will be the EPA and CARB that kill the Escalade. And Lincoln Navigator.

 

[wws]

I don't know how many sales Model X will take from Escalade.

Escalade is a proper truck based body on frame SUV. These Platinum customers could have purchased a Porsche crossover but chose not too. Either because they need the towing, the gargantuan interior and payload or they like the idea of being wasteful and thumbing their noses at environmentalist and environmentalism.

I think Model X is going to kill Porsche Cayenne, Mercedes ,BMW,Audi,Lexus,and Infiniti CUVs "crossovers" as well as the new Cadillac and Lincoln crossovers.

Agree. Many who are buying a premium crossover or smaller SUV could consider a Model X. But, setting bling aside, there is a lot that Model X will have to prove before it can replace a capable SUV like a Suburban/Tahoe/Yukon and their blingy brother the Escalade.

Eventually, it will be the EPA and CARB that kill the Escalade. And Lincoln Navigator.

I hope not - and this is what people dislike about over-reaching Big Government. A lot of people find a vehicle in that class to be quite useful. Frankly it was the EPA and CARB that pushed families who needed a larger vehicle from large 4-door sedans into vans and SUVs.

 

[Spidy]

Which family needs such a car? I have never seen anything like that Escalade in Germany and families are just getting around fine. I think it's hilarious that you have such cars as best sellers on the road, but at the same time VW has trouble getting their small Diesel engines into the market.

 

[adiggs]

Which family needs such a car? I have never seen anything like that Escalade in Germany and families are just getting around fine. I think it's hilarious that you have such cars as best sellers on the road, but at the same time VW has trouble getting their small Diesel engines into the market.

Need? Of course you're right, and need is much too strong a term to describe things. Of course, once necessities of life are fulfilled, most people buy on emotion and for what they want. And at least here in the US, there's an awful lot of want for such big vehicles. We really do like big vehicles in the US, and it's an important part of why I expect Model X to be selling more units than Model S as quickly as Tesla is able to ramp production. Next year might go to Model S, but the year after (2017) I expect many more Model X's rolling off the line than S.

As a bonus, the more X that gets sold, the bigger the efficiency shift within the overall fleet (still admittedly a trivial change). It'll be the change on companies business models that find themselves selling fewer of those big rigs that'll really move things.

 

[EarlyAdopter]

Luxury SUVs are also the cash cows of the automotive industry. Tesla is about to strike where it's going to hurt other car companies the most - the bottom line. I expect it's going to get ugly quick.

 

[smorgasbord]

Luxury SUVs are also the cash cows of the automotive industry.

Yup. It's interesting how quickly these things changed, as documented in this NY Times story:

While G.M. would not provide profit margins, analysts estimate that the company has to sell five small cars like the Cruze to equal the profit of just one Suburban. G.M.’s largest S.U.V.s reach profits of up to $10,000 a vehicle, said Jesse Toprak, an analyst with Cars.com. By contrast, its smaller cars make about $1,500 to $2,000. Altogether, the large S.U.V.s have added about $1 billion to G.M.’s bottom line this year.

 

[RobStark]

I hope not - and this is what people dislike about over-reaching Big Government. A lot of people find a vehicle in that class to be quite useful. Frankly it was the EPA and CARB that pushed families who needed a larger vehicle from large 4-door sedans into vans and SUVs.

I know a lot of people want to commute alone in a 6k lbs vehicle getting 9 MPG if they have he cash to do so.

Too bad.

Eventually they will have to do with PHEV Crossovers then finally BEV crossovers.

Or they can move to Venezuela or Russia.

 

[wws]

I know a lot of people want to commute alone in a 6k lbs vehicle getting 9 MPG if they have he cash to do so...

It is a fun stereotype. But speaking as a 19+ year Suburban owner, I've never gotten as bad as 9 MPG. Even when fully loaded with wife, kids, "stuff", and towing a small travel trailer through the Sierras. And we have other cars for daily driving.

 

[ggr]

It is a fun stereotype. But speaking as a 19+ year Suburban owner, I've never gotten as bad as 9 MPG. Even when fully loaded with wife, kids, "stuff", and towing a small travel trailer through the Sierras. And we have other cars for daily driving.

Yes, 11 mpg is more than 20% better!

 

[RobStark]

It is a fun stereotype. But speaking as a 19+ year Suburban owner, I've never gotten as bad as 9 MPG. Even when fully loaded with wife, kids, "stuff", and towing a small travel trailer through the Sierras. And we have other cars for daily driving.

I am sure that tmc members are among the least ridiculous full size pick up and full size SUV owners but that does not mean that full blown ridiculous owners don't exist in large numbers. Because I see them everyday.