Tesla outsells Porsche, Jaguar, others in California
usatoday.com
usatoday.com
Many of the sales booked to Tesla in California are intended for buyers in other states that lack a Tesla dealership (but do have Porsche and Jaguar dealerships).
I'm asking because the report seems to use registrations and not just sales figures to describe the numbers in California[1]. To my knowledge a registration only occurs in the state where you're going to use the vehicle, but I don't know if the process varies for these trouble states.
Anecdotally, whenever I am in the Brentwood/Santa Monica/other nice areas of West LA, Tesla sightings are getting very common. It's like the next Prius around here.
She will say, "Daddy theres a Tesla logo. " I'll say, "Where and what color." Immediately followed by, " Oh yeah, right you are. Good eye."
Top two comments were:
"Is anyone else tired of tesla PR and seeing 2 tesla articles here everyday?"
and
"Are these sales to Californians, or does this include sales made in California and delivered to another state because of the dealership issue?"
But unlike Tesla, Porsche will never make a mass-market play. Tesla will - at least in the sense that Apple is making a mass-market play in the smartphone market. Tesla may never become the biggest "car company" in the world, although there's a pretty big chance it will become (if it isn't already) the biggest "electric car company" in the world.
Either way, it will be a very important and popular car company, that will get big enough to be able to drag the whole industry after it, and set the standards for the industry.
The Volkswagen Group doesn't get nearly as much press as it should, but I suppose the incumbent doesn't need it -- they already sell hundreds of thousands of vehicles world wide every year.
That being said, Tesla certainly has a long ways to go, but I think they have a good strategy going forward. Not to mention, I think the Model S is a beautiful car.
Same reason why Lexus doesn't play up their Toyota lineage.
So, VW group (and all large manufacturers) necessarily have to limit their press to the individual product lines as opposed to the whole auto group.
Porsche is profitable because (1) they are cost effective to produce; and (2) the effectively sell at well above sticker value, as the options are significantly marked up.
So, their model is very effective in terms of pulling dollars out of the pockets of those in clined already to buy a porsche.
While still leaving a base model within reach for some as well.
I own one and can attest to the "inclined already to buy a Porsche". Porsche is an old brand with meaning it's not bought because it's some kind of rational decision.
The seats in the back of the 911 won't even hold an adult.
You know when I found that out?
When I went to pick it up on delivery.
Was I mad?
No I was glad I didn't know that when I made the original buying decision.
Did it change my thoughts on buying another?
No, I traded it in in less than 1 year and bought another one (they just changed the design last year and I had to have the newer model after getting the latest marketing brochure which I salivated over.)
How do I get treated at the dealership? Not that great I got much better treatment at BMW. Will it matter to me in terms of buying another one? No. (Sounds a bit similar to Apple in past years in terms of treatment of customers, right?)
I've always had nice cars pretty much. But the Porsche is the first one that I literally get comments from people several times a month.
The seats in the back of the 911 won't even hold an adult.
You know when I found that out?
When I went to pick it up on delivery.
The higher margins help pay for the development of what will be standard features 5-10 years down the road.
Tesla is making electric cars that rich people would actually buy. Not low-end electric cars for the masses.
The problem is in the batteries - Tesla Model S batteries come in 60 and 85 kWhr capacities. Using the most generous specific energy estimates and the price estimates (265 Whr/kg and 2.5 Whr/US$ - http://en.wikipedia.org/wiki/Lithium-ion_battery), you're looking at 500 to 700 lb of extra weight and $24k~$32k due to batteries alone. Even if the price halves in 5 years, you can't make money spending up to half the price of the car in batteries alone.
As a premium car, Tesla can charge the extra money required for the large battery pack and things like all aluminum chassis in Model S. At the lowered price point, the revenue just is not there to justify these things.
This basically means that to hit the $30k price point, you're going to end up with a much smaller battery pack (like Leaf's 24kWhr battery pack) and much smaller car so that they can hit the (lowered) performance target in both the driving characteristics (acceleration, top speed, etc which depend greatly on curb weight) and range (weight and battery capacity).
If you look at the engineering trade-offs required to get to $30k pure electric car in 5 year timeframe, it's hard to imagine something drastically different from Nissan Leaf in range, size, and driving characteristics.
They don't need to profit directly on the low end cars, they're looking at increasing the number of Tesla owners, which will help to push pro-Tesla agenda and sell charging stations or other Tesla technologies.
TL;DR - it's hard to make claims to the quality the next Tesla car without having any idea of what they're going to do.
The biggest problem with batteries is that they're chemistry-bound - you don't get the free twice-every-2-years type of thing that we're used to in computing world.
Even with the Nissan Leaf type of vehicle, the growth in battery capacity and more efficient / lighter chassis may result in extension of range to, say, 150 miles from 100 miles by 2018. Will that make it a no-compromise electric car? What would the no-compromise range be?
Looking at what Tesla has done, and what Elon has said (who actually very carefully said "sort of affordable" - http://greenenergyholding.blogspot.com/2013/08/teslas-next-e...) what's more likely is a new model starting at, say, $40k ($30k after tax credits) with fairly limited range, with really usable range starting at around $50k. Is that affordable? Probably not. But probably does fit the label of "sort of affordable".
It makes sense now, but it wouldn't have been my first guess.
Have to say, tho, that my wife's F250 diesel feels like it could tow an aircraft carrier!
If they also do the diesel for folks who need the higher tow weights or assume they will start buying the F-250 / F-350, then it might be a very good deal for the professional.
1) it also is rumored to have stuff like stop/start technology that shuts off the engine while idling in traffic except when hauling a load.
If any car should be a niche product, it's a truck
You figure a truck is more niche than a V10 supercar? Trucks fill an important role, and I think more people have a use for them than you realize. It's easy to lose sight of that when you live in the city, where trucks have limited use, but the gross majority of the USA is rural.
The other thing that bolsters their sales numbers is use as fleet vehicles, which makes perfectly good sense. Trucks are generally simple, reliable, easy to maintain and inexpensive to build. So they are popular in fleets. Surprise, surprise.
Yes, trucks have an important role. I own a truck (paid it off and bought a car for commuting as well). My grandpa (a farmer) owns a truck. Many of my friends own trucks. But that excess capability that you speak of is the entire reason for owning a truck. Big engines, big transmission, big differentials, a big bed, and a strong frame is what a truck should have. If I can't tow a horse trailer let alone a load of steel, what good is a pickup? Pickup trucks have significant drawbacks (dangerous in the winter, deadly in accidents, hard to park), but none of that matters if you need a pickup.
You talk about contractors and fleet vehicles as if they're reason for mass-market full-size pickup trucks, but those are not mass-market use cases. Those are business uses. And let me make a big correction here, but most of the US is not rural. Not even close [1]. As of the 2000 census, almost 80% of the US was urban/suburban, and more than half of that was people living in cities over 200,000 people.
Pickup trucks are a status symbol, and while I don't have numbers to back it up, I would guess it would be more economical for people who need a pickup only occasionally to drive a car and rent a pickup. For the rest of us who actually use pickup trucks, the mass-market is turning them into minivan-substitutes the same way SUVs got turned from 7-seater trucks to soccer mom commuter cars. Compare the Tahoe today to the Blazer of 1985 for evidence.
[1] http://www.fhwa.dot.gov/planning/census_issues/archives/metr...
I didn't mean most of the US population was rural, just that the majority of the US by area is rural.
Anyway, I'm getting a bit bogged down in the details. I just object to your characterization of trucks as a niche vehicle. While it may be technically accurate- as everything can be described as addressing a niche in the market- it implies the subset of the market is very small, and I don't think that's accurate, particularly not in relation to many other categories of vehicle.
I do share your fears of trucks becoming too "soft" though. I already had to flee the SUV market and put a camper on a light truck instead, because of how SUVs have been changed. My hope is that the market demand for actual trucks is large enough to resist the trend.
I did use hyperbole in saying that trucks are the most niche vehicle, but I'm using hyperbole to prove my point. Contractors, farmers, work men, yes they need pickups. A mom driving her kids to school does not. A person working in an office and living in the city does not. A person who occasionally pulls a camper does not (many SUVs and crossovers are rated for pulling the weight of an average travel trailer).
When snow hits the road, the first two cars to go into the ditch are old compacts (inexperienced drivers) and pickup trucks. Pickup trucks are inherently dangerous to drive, and the people you speak of (work men/women) tend to know how to operate (not just drive) a pickup.
I can agree to disagree, I'm just voicing my frustration at the number of $50k luxury pickup trucks I see driven by people who live and work in the city.
You're right on needs vs. does not need. Just the other day saw a Volvo wagon pulling a little camper, seemed to handle it quiet well.
As for snow on the road, I'd throw in that SUVs are disproportionately found in ditches where I live (my coworkers and I suspect because they breed false confidence) but yes, pickup trucks are also notorious for throwing people in ditches. Many ordinary drivers are not very good with RWD vehicles in slippery conditions.
I hear you on the last part. It does grind my gears a little bit to see the shiny, never-dirty top-spec F150's driving around town. Not to mention the pristine super-duty trucks, although most of the super-duties I see around where I live are either beat to shit and full of stuff or hauling- a service life well-lived.
It seems like we're on the same page, although my views might be a bit stronger than yours.
Now today's Tacoma is bigger than the Ford F-150 from the time of Tacoma's introduction (mid-90's), the Ranger is discontinued, and the rest of the compact pickup field dried up years before.
If someone needs a full bed sometimes but REALLY NEEDS it when they do, I'd rather they be able to drive something that gets upwards of 20mpg (and handles better).
If you can avoid using it as a commuter, by all means, but most people can't afford to have one and the utility it provides and afford a second commuter car, hence the truck as daily driver.
Also, only one time a year? I guess I move a lot of things.
Last time I needed a truck was when I moved this winter. Before that... can't think of when it would have been, but it was years prior. I just don't buy furniture that often.
1) Rams had about a year of popularity here until people realized how crappy they were built
My problem with the rah-rah around Tesla is that, good as they might be compared to the status-quo, they are still cars. There's not enough attention paid to the fact that cars and the sedentary lifestyle they encourage are a net-negative for most people. Many of the folks I talk to who'd like to move to an active form of transportation don't because they are scared of being hit by a car. We've effectively ceded huge swaths of public space to single occupancy vehicles, and made it off limits to humans. This is bad for the health of the people in those cars, but also bad for everyone else.
BTW, I call bullshit on "folks" you talked to - if one really wants to "move to active form of transportation" one just do it. Instead of sitting in the car and complaining how life isn't fair.
It is not SAFE to be on a bike on a public road. Do you read the news and notice how almost every week you hear of a bicyclist being hit and/or killed?
I for one do not ride my bike to school because I do not feel SAFE, no matter if I wear a helmet, pads and armor.
This doesn't make this any less impressive, but I am not sure that it is fair to make the comparison of a company which needs to generate novelty year after year (like Jaguar and Porsche) with an entirely novel company (like Tesla).
If Tesla was putting out yearly models than this would be much more news.
....meeeeh, nobody really neeeeds a Porsche, they just buy them for the novelty (of sportiness) one could say. I think a Tesla in certain areas (anywhere near a big city) could make a much more practical purchase than a Porsche...
edit: Also, 60k ain't what it used to be. Heck, you'll pay that for a 3-series BMW these days (335i).
Or better yet, stop taking my tax dollars and giving them to rich people to buy a luxury electric vehicle.
Except perhaps for the very bottom of Porsche's product lines, the Tesla isn't even close.
Tesla is for geeks and treehuggers - but anyone into cars takes a quick look and then laughs - it's definitely not a gearheads ride in any way shape or form.
So we're in agreement then. The Tesla price point is pretty similar to stock bottom-of-price 911s, and their 0-60 is comparable as well.
I can't speak on handling, but from an outside point of view---they're both sports cars targeting the same market. If Porsche is better than Tesla, that doesn't change their chosen demographic.
My prediction? TSLA at 500 sooner rather than later. Who would have predicted Google at 700 three years ago? (it was 430 then)
Of course, now look for competitors, especially those who can poach Tesla people. I imagine all the car makers are researching aluminum bodies and electric powertrains. Do your research. I had already decided to buy TSLA 6 months before IPO, when Elon, A'nold and Toyota President made presentation at Google One on saving the Nummi plant.
My strategy on investing: stable, smart management; products people buy; stocks only. (no mutual funds, bonds, etfs, etc--if your company does matching 401k, take it, but don't bank on superior annual yields). Learn about foreign exchange. Read everything you can about the companies. Read all SEC filings on the companies you invest in and all their competitors. Stay away from tech, retail, and financial services. These are iffy. Read about the US economy, about the economy of large foreign countries: China, Japan, Germany, France, UK, Russia, India, and if you have time, Poland, Brazil, Argentina, Mexico. Stay away from precious metals, they are a form of currency, with ill-understood inflation. Stay away from airlines. Stay away from very heavily regulated industries that are utilities (telcos, cable, etc). Stay away from disposable-income consumer products--consumers are fickle.
Sell equal amounts of losses and gains, to limit tax exposures. Don't hold on to a stock for sentimental values. If you can't afford to take the risk of it going to zero tomorrow morning, don't buy. Diversify your portfolio. (I have holdings in 60 companies right now.)
An interesting side-effect of studying the market: choice of programming language makes zero difference. If the company is successful, you will be able to hire people to rewrite it all in whatever language is fastest that day. To quote the Unix philosophy: Make it work correctly first, and make it fast later. Facebook today has a market cap just above $100B (price 41 and change) and got started with PHP. Don't knock PHP. By the way, FB's capitalization is 5 times that of TSLA.
Finally, and oddly, smaller companies tend to yield higher returns (not by much, but some).