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US vs European market, where is the focus?

Discussion in 'Tesla Motors' started by widodh, Nov 21, 2011.

  1. widodh

    widodh Model S R231 EU

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    It has been discussed multiple times, mostly when discussing about 1-phase vs 3-phase charging, but I think it is a good discussion, but when taking a wider perspective.

    The idea lives that Tesla is only focusing on the US market and think the European (and other) market is a bonus, but not the real goal. But is that true?

    Sure, I'm a European, so I think that neglecting the European market is a stupid and short-sighted decision. But is that also true? Will the US market alone be enough to have Tesla survive and grow?

    Let's go on that path for now. Let's say Tesla would sell 20,000 units in the US only every year, that might go on for 5 or maybe 7 years and then the US market might become saturated. After these 7 years they start focusing on other markets, but would they be surpassed by other manufacturers like Audi, BMW, Mercedes, Nissan or Toyota? It then might be to late to step into the market.

    We've seen the same with other brands like GM and Chevrolet, they are not selling that much in Europe, but the Germans and Japanese are. Ford seems to be the only US manufacturer who is selling pretty well in Europe. But the models here are also focused on the European market.

    Would Tesla be able to catch up and take a share from the market by then? Who knows.

    If you look from the other way, why are they opening stores in Europe? They just opened a brand new store and service center in the Netherlands, why would they if they are not taking the European market serious?

    I don't want to turn this into another 3-phase discussion, but one could argue that the lack of 3-phase charging is a serious sign that they are not taking the markets abroad serious.

    It could also be a "chicken and egg" problem, Europeans feel 'ignored' by Tesla and Tesla thinks the European market is not big, since sales might be (relatively) low, again, is that true?

    Switzerland for example has a lot of Roadster, but the same goes for the Netherlands, so are we Europeans not interested in electric vehicles?

    If you look at the Model S tally thread you might conclude that Europeans are not interested in the Model S since the reservations are low. Again, that might be a wrong conclusion!

    All the marketing of Tesla seems to be going to the US market. Then talking to Americans the majority seem to know Tesla, but here in Europe they are not that well known yet, marketing problem? They might be able to boost their sales if they market their cars more over here?

    I think this could be a interesting discussion, but please, do NOT turn this into a "3-phase discussion" again!
     
  2. ckessel

    ckessel Active Member

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    Tesla has said they're going to deliver in Europe, but it's something like 14 months away at least (6-months after the US release if I recall). Panicking now because Tesla isn't making Europe focused public statements at this time seems over reactive. I've never heard or read anything that would indicate Tesla is going to ignore the European market.
     
  3. widodh

    widodh Model S R231 EU

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    My intention is not to panic or anything. The "focus" came up multiple times in various discussions.

    I just want a open discussion, not causing panic or anything.
     
  4. EV_de

    EV_de Model SP10/XP9 EU ZOE#47

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    #4 EV_de, Nov 21, 2011
    Last edited: Nov 21, 2011
    No ! , i would have never ever consider it to by a US car IF Audi or BMW could provide a similar car ..

    TM has only one change, they are a head now, so they have to bring the Model S
    as soon as possible ( with all European needs !! ) , by End of 2012 is allready very late to establish the Model S in the European market ...
     
  5. stopcrazypp

    stopcrazypp Well-Known Member

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    I guess what ckessel is trying to say is that Tesla still haven't made many statements on their plans for the European market, so it may be a bit early to judge their strategy in the European market.

    However, it's still interesting to talk about the EV market in general and how it is split between US vs Europe (I think the Japanese market is also huge too for EVs).

    My impression on this is that there are a couple of countries in Europe (Switzerland, Netherlands, Norway) that have show much greater interest in EVs per capita. But those countries tend to have a smaller car market in general. The larger car markets (Germany, UK, Italy, France, etc) have shown less interest in EVs (per capita or otherwise). Part of it may be the "chicken and egg" problem you are talking about (or "self fulfilling prophecy" where the automaker thinks the market in Europe is small, so adjusts supply/pricing to match, which in turn brings down demand).

    On the other hand, currently much of the consumer EV sales to date is in the US/Japan markets. Part of this is because of the production schedule, which lends to selling first in Japan or the US (Leaf being made in Japan, the PHEV Volt/Ampera being made in the US; will be true also for the Model S). The exception seems to be the iMIEV/iOn where more than half its sales is in Europe (with the rest in Japan/Asia); however, it seems the iMIEV/iOn is mostly focused on fleet sales at this point, not consumer sales. But it's still a bit too early to tell market trends since the list of highway capable EVs for sale is still very low at this point: Roadster, Leaf, iMIEV/iOn, Th!nk City, Smart eD, Fluence ZE.
     
  6. VolkerP

    VolkerP EU Model S P-37

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    I'd never consider to buy an U.S. made car. I'd never consider to buy a $50k car, let alone one for EUR65k. But here is the chance to demonstrate that getting off oil, using energy in an efficient way, and helping save the climate actually can be fun!
    If Audi or BMW or VW pulls it off with a car that is at least half as good as Model S and is available in 2013, I'd give it a thorough examination - might even step back from my Model S reservation.
     
  7. Robert.Boston

    Robert.Boston Model S VIN P01536

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    The substantial investment that Tesla has made in European stores and marketing events strongly points to a commitment to the European market. Its success in Europe will depend on (a) getting to market fast, to establish credibility against the many strong European brands and (b) addressing the particular charging needs in Europe.

    I worry that Musk's "we do it better" attitude towards charging may be the downfall of Tesla. Fortunately, I think it will be easy technically for Tesla to reverse course on charging, if not for the initial Model S release then sometime down the line, should the idiosyncratic charging ideas of Tesla not find traction in the market. In that scenario, it won't be the engineering holding things back, but Musk's willingness to reverse course.
     
  8. EV_de

    EV_de Model SP10/XP9 EU ZOE#47

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    VolkerP ^^^ dito

    the only German highway capable EV's are the Roadster ... the other ones a legal to drive on the Autobahn, but they are a traffic obstruction !
     
  9. Eberhard

    Eberhard #421 Model S #S32

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    Tesla is just opened a niche in the market for luxury electric cars. there is no competition in Europe for high class electric car like Model S.
    But as soon as the german car maker are pressed to offer similar cars, they will do it at the best.
    Tesla has to settle their brand in Europa in time, otherwise they will disappear, like all the other american car maker.
     
  10. tennis_trs

    tennis_trs 2010 2.0 Roadster Sport

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    They don't seem to be marketing much here in the USA either, maybe in CA, but doesn't seem like much here in VA. Seems like a little less than half the people who ask me about my car have heard of Tesla. I had expected the Roadster to sell a good bit better/quicker after they proved that they could get several production cars to market, without widespread significant issues, and with the good press they rightly got due to how fun the car is to drive (even though they are very expensive).
     
  11. markwj

    markwj Moderator, Asia Pacific

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    I suspect Tesla's current focus is 100% on a summer 2012 US launch. They are laying the groundwork for other markets, but rightly focussing on getting the Model S on to US roads on time.
     
  12. stopcrazypp

    stopcrazypp Well-Known Member

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    I think they don't do any kind of traditional advertising. I haven't seen a print, web, or tv ad yet from the main Tesla Motors company; although some have mentioned some advertising (may have been individual stores or other partners):
    http://www.teslamotorsclub.com/showthread.php/3664-Tesla-Motors-Paid-advertising

    Tesla's reputation in the US spread mainly by word of mouth and media reports (personally I found out about them from an auto show). It's still not a household name, but I suspect widodh is right that Tesla is better known in the US than in Europe.
     
  13. Cobos

    Cobos S60 owner since 2013

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    #13 Cobos, Nov 21, 2011
    Last edited: Nov 21, 2011
    I agree and understand with Tesla's current focus on the US market. That's where the car is selling first and initially that will be their biggest market.

    At the same time I've heard from people within the European branches of Tesla and experienced myself that the image of the Model S is a pure US car image. The performance of the car is a big issue in the US while that is still important in Europe though less so. The whole idea that a BMW 5-series competitor should NOT have a hitch. The BMW does offer one in Europe it does not in the US. The 3 phase issue matches my impression with these other issues.

    I could find more examples but the point is due to Musk's vision we do get his vision of the car. That is good for a no-compromise engineering solution to many problems but it feels very silly for things like the hitch. Which mind you is a $3000 option for the BMW 5 series, so no one says Tesla should not have a nice proper mark-up for it.

    So to try to answer the original question I think the lack of focus in Europe is natural due to the timing of the launch, but the lack of understanding that the car market is in some ways VERY different in Europe than the US is not so good. This of course is even harder since Norways market is different than the German market or the UK market.

    Cobos
     
  14. Norbert

    Norbert TSLA will win

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    My impression is that Tesla is very much focusing on the US launch, and will use a successful US launch as a basis for marketing in Europe and worldwide. In general, the US is more open to innovative products, the tax rebate helps, and being in the domestic market also makes things much easier for a (still) small company. In addition, except for reservation numbers, they may also be seeing the smaller Leaf numbers in Europe.
     
  15. hcsharp

    hcsharp Active Member

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    Tesla's biggest problem is a shortage of capital and will also suffer from growing pains. I think they have some very smart marketing gurus that know the EU market very well despite the 3 phase debacle (which may in the end turn out to be nothing). I think it's naive to assume they are being short-sighted with the European market. They are juggling multiple priorities - with number crunching on a big scale (for such a small company).
     
  16. Cobos

    Cobos S60 owner since 2013

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    Exactly what do you mean with US more open to innovative products? Depending on how many Leaf Nissan can get to Norway in 2011 it looks like EVs will have sales numbers in the 1-2% range of total car sales this year. An agressivily priced Model S will directly compete with our version of the Ford Fusion, on PRICE here, how's that for rebates. Of course by agressively priced I mean just using the US prerebate price directly and not using the we add another 30% to the price before we sell it in Europe method they are using now for the Roadster. THIS attitude is the exact point that some of us Europeans are trying to make, this is the reason why no true american cars are succesfull in Europe. The only ones that are doing good is European designed and European made cars like most Fords sold here, same goes for Opel/Vauxhall.

    If Tesla wants to have more than a mere presence in Europe they need a European sales manager or even better some regional sales managers with some autonomy or power to influence the actual product. Not to mention they need to get actual live cars here to start to drum up sales, though I'm guessing they will wait until the RC are done.

    Cobos
     
  17. Hache

    Hache Member

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    I talked with a Tesla guy from the Paris store (France). He told me that Tesla is not very well known in europe, but he expected lots from the Geneva auto show, in march. Maybe they planned to start advertising then, with lots of test rides.

    He also told me they conducted some commercial studies. As a result, they'll close the Monaco store. It was good to sell the roadster, but there are not many buyers of luxury sedans there.
     
  18. Arnold Panz

    Arnold Panz Model Sig 304, VIN 542

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    It's pretty clear that Tesla isn't doing any advertising because they have nothing to sell customers until at least the end of next year, and for Europe it's some time in 2013, which is over a year away. Tesla's "commitment" has been demonstrated by opening many stores in major markets in the US and Europe, so it's not a matter of focusing on one market versus another -- both are targeted although for logistics and timing purposes the US gets cars first, so will naturally get a bit more attention on the front end.

    This is also a concise explanation for why it is much harder to do a hard push in "Europe" than the US. The US is truly one market, whereas "Europe" is really made up of a dozen or so discreet markets, distinguished not only culturally by the different countries, but by language, and even product modification (UK cars have the whole right-hand drive issue). This is another reason it's easier for Tesla to try to get penetration and visibility in the US versus Europe because it is significantly harder to promote oneself throughout Europe. For example, a "national" news story in the US could potentially reach 300 million people -- there is no real equivalent to this in Europe.
     
  19. VolkerP

    VolkerP EU Model S P-37

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    Tesla bears the full currency risk when entering the European market. Most expenses for Model S production will be in $. If Euro drops in relation to $ after Tesla set the European sales price, the gross margin is diminished. If Euro rises, the car might become too expensive. Financial preclusion to currency risks have a price sticker, too.
     
  20. Mitrovic

    Mitrovic Member

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    #20 Mitrovic, Nov 22, 2011
    Last edited by a moderator: Mar 13, 2016

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