Posted on 08/04/2013 9:47:03 AM PDT by ckilmer
Tesla Nabs 8% of the U.S. Luxury Car Market
By Chris Neiger | More Articles August 4, 2013 | Comments (0)
As if Tesla's (NASDAQ: TSLA ) 280% stock price increase since the beginning of 2013 or becoming profitable in Q1 of this year wasn't enough, the Electrification Coalition released a report last week stating that Tesla's Model S made up 8.4% of the U.S. luxury automotive market in the first six months of the year.
In the first quarter of this, year Model S sales outpaced Audi A8, BMW 7-series and Mercedes S Class sales. But what's really striking about the comparison is that Tesla is a young car company and its Model S has been selling for only about 14 months, while BMW has sold its 7-series since 1977 and Audi's flagship A8 launched back in 1994.
Tesla Model S. Source: Tesla.
Part of Tesla's success is due to the acceptance of plug-in electric vehicles, or PEVs, among U.S. consumers and an overall bounce back in automotive sales. We first saw evidence that the U.S. luxury auto market was coming back in 2011, with spikes in sales from BMW and Mercedes. Meanwhile, the PEV business has seen more than 110,000 U.S. vehicle sales since the beginning of 2011 -- including cars from Tesla, General Motors, Nissan, Toyota, and others.
Topping off Tesla's solid PEV and luxury position is that PEV sales have been twice as high in their first two years than hybrid vehicles were in the first two years after that market's initial launch -- a trend that could certainly continue to benefit Tesla.
But Tesla has bigger aspirations than just tackling the luxury or PEV market. Tesla CEO Elon Musk has been very vocal about introducing a $30,000 car for the masses by 2016. To achieve that goal, the company will need to significantly decrease the cost of its batteries. That's why the latest information form the Electrification Coalition is so important. The group expects battery costs to drop by almost half by 2020.
Model S interior. Source: Tesla.
But not everyone is convinced Tesla can lower battery costs in time -- including Bill Alpert of Barron's. "Industries and governments around the world have spent billions on battery research, but few expect to trim electric-car battery costs by more than 20%-30% by the planned 2016 launch of Tesla's car for the Everyman," he wrote in an article last month.
But if battery costs do drop by half by 2020, then it's not out of the realm of possibility for them to fall by 20% to 30% over the next three or four years. GM and Nissan are researching how they can reduce EV battery costs by selling used batteries after their automotive lifecycle is finished. Used EV batteries can still have 70% of their initial capacity after about 10 years, and the two car companies are looking into ways to sell those batteries to energy companies.
But the best way to lower battery costs is for auto consumers to adopt EVs and scale down the overall cost of battery prices in the process. So far, things have been moving in the right direction for that to happen. From 2010 to 2011, just over 17,000 electric vehicles were sold. In 2012, that number jumped to more than 52,000. Now, just seven months into 2013, the EV auto market has already sold almost 41,000 electric vehicles. The models of EV cars on the market also jumped from just three in 2010-2011 to 13 right now. Those stats have contributed to a drop in EV battery prices by about 40% from 2010 to 2012.
I’m in tne bay area and here I see them every day. It’s surprising how many there are considering the price. Good looking car too.
Porsche also invented regenerative breaking at the turn of the century.
Braking
A friend of mine ordered a Tesla about six months ago with, at the time, an expected delivery date of July. I haven’t talked to him in a couple of months so I don’t know it he got it yet. I think he paid $107k for it.
No, he is not a liberal but a hard working, small businessman who is a Conservative Republican.
It's exactly the trim level (Sahara) I wanted, with navigation and satellite radio.
I see several a week here on the west coast and the frequency of seeing them has been increasing.
I saw one on i84 in Connecticut 2 weeks ago.
I don’t know Tesla’s politics, but I for one like the idea of electric cars because I think being grid independent is a good idea. Yes, I know that means you need a way to generate electricity, but that is easier to do than make your own fuel (even though there are survivalists who make their own biodiesel).
I am not against using oil for fuel. I don’t believe man-made global warming is real; and even if it was it would be foolish to enact policies that destroy the economy of the world so we can just keep the temparature from changing a degree. Life on our planet has survived a great deal of climate change and will continue to do so. Nor do I believe in peak oil because even if oil resources ever get depleted the law of supply and demand will result in oil continuing to flow.
An attractive and well-performing electric vehicle for under $30k is a great idea. I wish they also had a one ton or three-quarter ton pickup.
:-)
I am a lifelong entrepreneur with no college education and three successful businesses. In spite of my short comings (and I have many!) I can clearly see that our world is entirely solar powered. If you don’t believe it then imagine our world without the sun. Pretty simple and basic. So we have a clear choice, to create ways to not use any oil which is a finite supply or use the sun which will last as long as the planet has human beings on it. With a $30k solar charging system at my house I can forever charge my Tesla S and supply my home with all the power I will ever need. A total of $120k investment and the coolest car currently on the planet. Every comment here is a head in the sand mentality. Consider all the things we blow money on each year. Including the house you currently live in! Could you get by living in a house that is worth $100k less? And don’t ignore the lower cost of ownership that comes with the Tesla. Forgo a few things here and there and fund your freedom from the Middle East, complicated repairs on internal combustion vehicles, and your local dominating power company. Oh yeah, I am a 30 year car guy. Here is my challenge to you, watch 5 YouTube videos a day for one week about Tesla or Elon Musk and tell me you feel the same. The guy is worth over $5 billion and could just sit back and never put any of his fortune at risk, thankfully for all of us he doesn’t do that! Lastly, most all of these negative comments were eerily familiar to arguments against the modern car when the horse was the preferred method. It’s coming, like it or not.
Elon Musk is a devout Baraqqi.
But I agree with a number of your points in the post.
The reality is that Tesla makes their profit selling phony “electric car credits” to auto makers that don’t have an electric model themselves. This is required by California law.
No matter what Tesla calls luxury market, they don’t come close to being a player.
The Tesla really isn’t close in size to the A8, S-class, or 7-series.
Ya done good.
I oppose federal handouts to corporations and the "stimulus" bill was the same crap. TESLA motors got a truckload.
When someone have $120K to buy a car, I’m sure he/she could care less about price of gas. Cool? Maybe.. Range? 260 miles...
A Tesla HPWC draws 240V single-phase power at 80 amps through a 100-amp circuit breaker, enough juice to refill an empty 85kWh Model S battery and restore its 265 miles of maximum driving range in just over four hours. Put another way, a Model S charges at up to 62 mph through a HPWC, as in 62 miles of driving for every hour on the plug.
Our Coulomb Level 2 charge station draws 30 amps through a 40-amp circuit, plenty for all other EVs on the market. But it takes over a dozen hours to refill an empty Model S. Slow as this sounds, it would do until we got our HPWC installed. Many Edmunds staffers drive less than 50 miles overnight, which the Coulomb can deal with in less than 3 hours.
From Edmunds.com.
They will need to compete better and finally lower their prices to cause more people to buy the cars that use their products! Competition is good and we see over the years what has happened when the oil companies have had almost none...big big price gouging periods..because they can.
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Agree. Tesla is talking about bringing out a 30 k electric car in 2016. Great if they can do that as that would be world beater. but batteries will have to come down in price a lot while maintaining performance. so this is not a sure thing. (that said battery prices have been falling steadily as battery production volumes have increased—which you would expect.)but it is definitely doable.
but if 1 million electric cars are on the road displacing gas demand with electric demand....that will put a serious dent in the demand for oil ....
Six years ago your hypothetical 1 million electrics would be less than half of one percent. Serious dent? Heck that’s barely a ding around here.
“254.4 million registered passenger vehicles in the United States according to a 2007 DOT study”
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Ok yeah you’re right; it will take more than a million cars running on electricity to make a serious dent in the car market. More like 50 million cars. If the Tesla makes a 30k car in 2016, then they might hit 50 million cars in 2030. Just my wag.
The reason that the stock price is so high for Tesla is not because of confidence in the car or the company but because of confidence in Elon Musk who founded Paypal and SpaceX. People generally think that if the electric car can be successful—he’s the kind of guy who can make it happen. the business types love every move he makes and the technical types love the car designs. the tesla cars are currently status symbols in the way apple products were for years.
most all of these negative comments were eerily familiar to arguments against the modern car
I oppose federal handouts to corporations and the “stimulus” bill was the same crap. TESLA motors got a truckload.
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Tesla paid back their federal loan with interest this year.
I will be a buyer for sure! Far better technology and much lower maintenance costs. After all, no oil, spark plugs and the extreme heat generated in the ICE.
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