US vs European market, where is the focus?

[Robert.Boston]

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.

They could always hedge these using financial products, albeit at a cost. Arnold makes an excellent point about the highly fragmented European market, which likely serves as a greater barrier than FX risk.

 

[widodh]

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.

We Europeans we always make fun of American cars, the image they have is that they are fast in a straight line, but are rubbish when it comes to cornering

As a European I however LOVE the Model S, you can clearly see there are influences from Jaguar, a brand I like, but I'd never buy. (Cars for old and stubbern british people)

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.

It could be indeed a problem that the markets differ, but EU regulations also make this easier. For cars there are European rules, which apply to almost every country.

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.

Yes, true, I also fully understand that the focus is on the US launch, but the things we hear from Tesla are confusing at least.

They do take European orders, but they are still a bit vague about the delivery and the amount of events in the US are much higher then in Europe.

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.

That might be a good answer as well, they don't want to overpromise in the EU? If you want to reserve a Model S, you are free to do so, but they simply can't handle more orders for now?

 

[vfx]

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.

I hope someone is documenting that (and other) closing stores for history.

 

[Mitrovic]

Thank you for the good topic of this discussion, I thought about it very often. To make it very short:

I think Tesla Motors is focusing on the USA market. I think this is wrong in the mid term. I do not know how it is in the short term, but I think they could have sold many more roadsters in Switzerland if they really tried ( 3 P charging, real marketing and advertising ). I think this is true for most European countries.
I'm sure that they are still around because they are selling cars outside USA. There would be no Tesla Motors anymore if they had tried to sell only to USA.

I think that there will be no Tesla Motors if they do not adapt to other markets then USA.
I think Tesla Motors does not listen to customers from outside USA so far. That's why I think it is time for USA customers to wake up and tell Tesla Motors:

"Come on guys I want to buy a car from a company which will be around in 5 years. And I want you to create jobs in America! This can only be done if you adapt to international needs!"

Right now ( e.g. without 3P charging ) its like trying to sell a LHD car to England.

 

[Norbert]

They do take European orders, but they are still a bit vague about the delivery and the amount of events in the US are much higher then in Europe.

They also took orders in the US a long time before increasing the amount of events. A successful US launch will give them media exposure which will make it much easier to market the Model S in Europe, european media will report about it as well. That will get them a lot for free. Besides, Europe is still selling Roadsters.

 

[SByer]

Man, it's so cool that this forum has such an international membership.

I just wanted to note that thinking of the U.S. as a single market is a little bit simplistic - California (and to a lesser extent Oregon and Washington) are definitely a bit apart from most of the states. It's more gradients in the U.S. vs. (what I'm guessing - correct me if I'm wrong) harder lines in the EU in terms of differences across boundaries, but it's still there.

Tesla seems to be running a just-in-time operation. They need to get past U.S. launch, and then we'll see. They've never been very communicative as a company, so don't mistake not saying for not caring.

(widodh is right - loud-and-stupid straight line speed is what I think of when someone says 'Corvette' or 'Camero')

 

[Eberhard]

my problem is, that Tesla is refusing necessary action for the european launch. I already put down a deposit of 30.000€ half year ago, not knowing what i will get in the very end. I trusted Tesla, but how long can i go on with that, if Tesla ignore my needs?

 

[vfx]

...
Tesla seems to be running a just-in-time operation. They need to get past U.S. launch, and then we'll see. They've never been very communicative as a company, so don't mistake not saying for not caring....

Transparent but not communicative.

 

[Eberhard]

Tesla was very communicative to my be saying, there is no need for 3-phase charging, DC is all you need even for Europe.

 

[EVNow]

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.

Actually, US is not considered open to change. We are a lot more conservative (and price sensitive) than Japan & EU.

 

[Norbert]

Actually, US is not considered open to change. We are a lot more conservative (and price sensitive) than Japan & EU.

I'd say the US has both sides, the innovative side probably most visible in California (and around places like MIT, for example). Especially Japan may have caught up in recent history, and the EU in regards to renewable energy.

 

[Norbert]

I just wanted to note that thinking of the U.S. as a single market is a little bit simplistic - California (and to a lesser extent Oregon and Washington) are definitely a bit apart from most of the states. It's more gradients in the U.S. vs. (what I'm guessing - correct me if I'm wrong) harder lines in the EU in terms of differences across boundaries, but it's still there.

I guess you could say that some states in the US get less attention from Tesla than some countries in Europe.

 

[clea]

I guess you could say that some states in the US get less attention from Tesla than some countries in Europe.

there is a map produced by NPR which demonstrates some of this (not focused on tesla however), but is it because of lesser interest on the part of the consumers or less attention to those targets by the manufacturers that they (ev and hybrids) are selling more on the coasts with a larger portion going to the left coast.

Map of Hybrid/Electric Vehicle Sales Across the US