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Tesla Nabs 8% of the U.S. Luxury Car Market
fool.com ^ | August 4, 2013 | Chris Neiger

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.


TOPICS: Business/Economy
KEYWORDS: electricbattery; tesla
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1 posted on 08/04/2013 9:47:03 AM PDT by ckilmer
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To: ckilmer

It just shows that rich people cam afford luxury toys.


2 posted on 08/04/2013 9:50:37 AM PDT by mylife (Ted Cruz understands the law, and he does not fear the unlawful.)
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To: ckilmer

High rollin’ libs with more money than brains.


3 posted on 08/04/2013 9:53:41 AM PDT by shove_it (long ago Orwell and Rand warned us about 0bama's America)
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To: shove_it; mylife

Yeah but what happens to the price of oil if electric cars grab an ever larger piece of the automobile pie.


4 posted on 08/04/2013 9:57:31 AM PDT by ckilmer
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To: ckilmer
I don’t believe that for a minute.Mercedes,BMW,Audi,Lexus,Infiniti,Acura,Cadillac,Porsche only have 92%.Sounds like absolute BS to me.
5 posted on 08/04/2013 10:01:56 AM PDT by Gay State Conservative (If Obama Had A City It Would Look Like Detroit.)
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To: Red Badger

Ping.


6 posted on 08/04/2013 10:01:58 AM PDT by Army Air Corps (Four Fried Chickens and a Coke)
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To: shove_it

If EV do not require gov subsidies to compete and consumers can afford one without tax breaks, then it is viable industry. All this assumes gas prices remain unchanged. It could go the other way, down due to less gas powered vehicles. EV has to compete and survive that possibility. Wonder what happens to the gas tax revenues for fed gov and states as EV become more common. Big gov types are already working on revenue alternatives as we speak.


7 posted on 08/04/2013 10:05:28 AM PDT by Fee
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To: ckilmer

The pipe dream of an electric car dies hard among the wealthy, eco-loonies of the Hard Left.


8 posted on 08/04/2013 10:07:05 AM PDT by Jack Hammer (American)
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To: ckilmer
Oh,it's against certain *models*.Still sounds fishy to me.I routinely see the Mercedes S,the BMW 7 and the Audi A8...as well as the Porsche Panamera and the Lexus LS450...on the highways and byways that I travel.But I have never,never,*ever* seen a Tesla on the road.I see one almost daily at the “dealership” located at a nearby mall I frequent.But that dealership is *empty* just about every time I pass it (I'm a mall walker so I see it regularly).
9 posted on 08/04/2013 10:09:21 AM PDT by Gay State Conservative (If Obama Had A City It Would Look Like Detroit.)
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To: Gay State Conservative

I don’t believe it either, by the accepted standards of what constitutes the luxury car segment.

On the other hand, of those with around $100,000 or more to spend, it may be that one of every 12 or 13 may be choosing a Tesla, but even that seems unlikely.

I’ll wait for confirmation from traditional industry sources.


10 posted on 08/04/2013 10:11:57 AM PDT by hlmencken3 (Originalist on the the 'general welfare' clause? No? NOT an originalist!)
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To: mylife
I'm not, and am still driving my pristine 2002 Jeep Grand Cherokee 'Laredo', with almost 300k on it. Too many doo-dads, gadgets and electronics in the new ones.


11 posted on 08/04/2013 10:12:25 AM PDT by carriage_hill (Guns kill people, pencils misspell words, cars drive drunk & spoons make you fat.i)
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To: Gay State Conservative
I don’t believe that for a minute.Mercedes,BMW,Audi,Lexus,Infiniti,Acura,Cadillac,Porsche only have 92%.Sounds like absolute BS to me.

I agree, it sounds unlikely. I'd say they have the decimal in the wrong place. I could believe Tesla having .8 % of the market. Maybe.

12 posted on 08/04/2013 10:13:00 AM PDT by Charles Martel (Endeavor to persevere...)
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To: Gay State Conservative

I have seen 2-3 Teslas in orange county ca. Drive through about onece a week. I think there is a dealership on the coast Hwy in newport beach.

But the other models you stated are all over the place, including San Diego where i do most of my driving.

I am a supporter of electric cars and hope they can make it on their own. I also support more oil production in the US. Anything other than oil from the middle east or venezuela.


13 posted on 08/04/2013 10:13:33 AM PDT by morphing libertarian
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To: ckilmer

With 0scumbag shutting-down scores of coal-fired power plants, how are they going to charge the EV cars? Windmills?


14 posted on 08/04/2013 10:16:09 AM PDT by carriage_hill (Guns kill people, pencils misspell words, cars drive drunk & spoons make you fat.i)
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To: carriage_hill

Some robust engineering there for sure, but I sold mine because of the terrible gas mileage. My Caddy SRX gets 4 or 5 mpg more than the old Jeep did.


15 posted on 08/04/2013 10:17:45 AM PDT by nascarnation (Baraq's economic policy: trickle up poverty)
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To: ckilmer
Yeah but what happens to the price of oil if electric cars grab an ever larger piece of the automobile pie

Nothing much will happen. If by some means the true market forces work this corrupt government will just tax it more.

16 posted on 08/04/2013 10:18:18 AM PDT by Digger
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To: ckilmer
CleanCar photo IDriveACleanCar.jpg
17 posted on 08/04/2013 10:18:24 AM PDT by preacher (Communism has only killed 100 million people: Let's give it another chance!)
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To: preacher

Coal is at 37% of US electric generation and dropping fast.


18 posted on 08/04/2013 10:21:47 AM PDT by nascarnation (Baraq's economic policy: trickle up poverty)
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To: Fee

Our antiEnergy Dept. will devise a mandatory receptacle and plug with a meter to collect tax on EVs.


19 posted on 08/04/2013 10:23:24 AM PDT by shove_it (long ago Orwell and Rand warned us about 0bama's America)
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To: Charles Martel; Gay State Conservative

I don’t believe that for a minute.Mercedes,BMW,Audi,Lexus,Infiniti,Acura,Cadillac,Porsche only have 92%.Sounds like absolute BS to me.

I agree, it sounds unlikely. I’d say they have the decimal in the wrong place. I could believe Tesla having .8 % of the market. Maybe.
..........
They’re talking about Tesla having 8% of the luxury car market in the USA. Tesla sold about 10,000 cars last year. So that would make the luxury car market total at around 120,000 cars last year in the USA.


20 posted on 08/04/2013 10:25:36 AM PDT by ckilmer
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To: mylife
It just shows that rich people cam afford luxury toys.

And they're the ones who should be buying hybrid electric vehicles, allowing the technology to mature and trickle down to the everyday driver.

In the 1920s and 1930s it was the luxury vehicles who pioneered supercharging, V8 engines, hydraulic brakes, electric starters, etc.

21 posted on 08/04/2013 10:26:26 AM PDT by Yo-Yo
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To: carriage_hill
I'm not, and am still driving my pristine 2002 Jeep Grand Cherokee 'Laredo', with almost 300k on it. Too many doo-dads, gadgets and electronics in the new ones.

Just picked up a 2008 Wrangler Unlimited myself...fun!


22 posted on 08/04/2013 10:27:35 AM PDT by Kip Russell (Be wary of strong drink. It can make you shoot at tax collectors -- and miss. ---Robert A. Heinlein)
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To: Kip Russell

SWEET!


23 posted on 08/04/2013 10:28:20 AM PDT by carriage_hill (Guns kill people, pencils misspell words, cars drive drunk & spoons make you fat.i)
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To: morphing libertarian; Gay State Conservative

I am a supporter of electric cars and hope they can make it on their own. I also support more oil production in the US. Anything other than oil from the middle east or venezuela.
.......
Yeah I put this in the same category as the Picken’s Plan to put truckes and busses on natural gas. Anything that reduces demand for oil—especially foreign oil ... is better.


24 posted on 08/04/2013 10:29:36 AM PDT by ckilmer
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To: carriage_hill

With 0scumbag shutting-down scores of coal-fired power plants, how are they going to charge the EV cars? Windmills?

..........
good question. I think the carbon dioxide hysteria is way overated and stupid. No coal plants need to be shut down.


25 posted on 08/04/2013 10:31:09 AM PDT by ckilmer
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To: ckilmer

Total BS. When’s the last time anybody saw a Tesla driving down the street? Anyone? Bueller, Bueller? I didn’t think so. You would think that with 8% of the market you’d see one at least occasionally instead of virtually n e v e r!


26 posted on 08/04/2013 10:32:37 AM PDT by slouper (LWRC M6A2)
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To: slouper

My buddy’s daughter has one. She’s a drug saleswoman (awesome legs, LOL) and gets “free” juice at work. The joke is some other guy bought a Volt and they are squabbling over the plug-in.


27 posted on 08/04/2013 10:35:33 AM PDT by nascarnation (Baraq's economic policy: trickle up poverty)
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To: Digger

Yeah but what happens to the price of oil if electric cars grab an ever larger piece of the automobile pie

Nothing much will happen. If by some means the true market forces work this corrupt government will just tax it more.
............
this is true as long as we’re talking about 10k-500k cars. 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 .... that will force oil prices down.

Consider also that that the USA is producing an extra 1 million barrels of oil each year.

Currently demand for oil from overseas is increasing steadily (US demand is not currently falling) and US production is increasing steadily so supply and demand are balanced.


28 posted on 08/04/2013 10:40:21 AM PDT by ckilmer
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To: slouper

Total BS. When’s the last time anybody saw a Tesla driving down the street? Anyone? Bueller, Bueller? I didn’t think so. You would think that with 8% of the market you’d see one at least occasionally instead of virtually n e v e r!
..........
Most of the Tesla’s being sold are being sold in California coastal communities.


29 posted on 08/04/2013 10:42:17 AM PDT by ckilmer
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To: Yo-Yo

And prior to the 20s it was electric vehicles, but I get your point about the rich allowing technology to develop.

http://www.popularmechanics.com/cars/jay-leno/vintage/4215940


30 posted on 08/04/2013 10:42:36 AM PDT by mylife (Ted Cruz understands the law, and he does not fear the unlawful.)
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To: ckilmer
There's infinitely more CO2 coming from the oceans (sinks), than from any man-made sources.
31 posted on 08/04/2013 10:45:40 AM PDT by carriage_hill (Guns kill people, pencils misspell words, cars drive drunk & spoons make you fat.i)
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To: ckilmer

Electric Cars use fossil fuels than an internal combustion engine.


32 posted on 08/04/2013 10:46:24 AM PDT by dila813
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To: ckilmer

On the other end of the scale let’s ask McAulliffe how many greentech cars his (formerly on the board) company actually sold? Answer almost as many as Tesla.


33 posted on 08/04/2013 10:49:15 AM PDT by John S Mosby (Sic Semper Tyrannis)
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To: ckilmer

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.


34 posted on 08/04/2013 10:49:39 AM PDT by fabian (" And a new day will dawn for those who stand long, and the forests will echo in laughter")
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To: carriage_hill

Massive amounts of CO2 come just from rotting plants and animals.
The autumn leaves for example.
CO2 is only a problem if it displaces O2.


35 posted on 08/04/2013 10:50:20 AM PDT by mylife (Ted Cruz understands the law, and he does not fear the unlawful.)
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To: mylife

You mean Teddy Roosevelt didn’t provide a technology grant to Baker?


36 posted on 08/04/2013 10:53:19 AM PDT by Yo-Yo
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To: Yo-Yo
No Sir. ☺
37 posted on 08/04/2013 10:54:08 AM PDT by mylife (Ted Cruz understands the law, and he does not fear the unlawful.)
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To: ckilmer
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"

38 posted on 08/04/2013 10:58:22 AM PDT by Covenantor ("Men are ruled...by liars who refuse them news, and by fools who cannot govern." Chesterton)
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To: Yo-Yo

1898 Porsche Hybrid.

http://en.wikipedia.org/wiki/Lohner-Porsche


39 posted on 08/04/2013 10:58:30 AM PDT by mylife (Ted Cruz understands the law, and he does not fear the unlawful.)
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To: ckilmer
They’re talking about Tesla having 8% of the luxury car market in the USA

It depends on how you define "luxury".I consider the makes that I mentioned earlier to all be luxury brands.BMW,for example,sells the 5 Series...its "midline" sedan and a car that I consider to be very much a luxury car.I've driven a couple of them and they sure beat anything that Ford,Chevy,Toyota or Honda makes.

40 posted on 08/04/2013 11:02:20 AM PDT by Gay State Conservative (If Obama Had A City It Would Look Like Detroit.)
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To: Gay State Conservative

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.


41 posted on 08/04/2013 11:02:39 AM PDT by aquila48
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To: Yo-Yo

Porsche also invented regenerative breaking at the turn of the century.


42 posted on 08/04/2013 11:04:52 AM PDT by mylife (Ted Cruz understands the law, and he does not fear the unlawful.)
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Braking


43 posted on 08/04/2013 11:05:42 AM PDT by mylife (Ted Cruz understands the law, and he does not fear the unlawful.)
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To: ckilmer

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.


44 posted on 08/04/2013 11:20:06 AM PDT by alice_in_bubbaland (When injustice becomes law, resistance becomes mandatory- Thomas Jefferson)
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To: carriage_hill
SWEET!

It's exactly the trim level (Sahara) I wanted, with navigation and satellite radio.

45 posted on 08/04/2013 11:20:42 AM PDT by Kip Russell (Be wary of strong drink. It can make you shoot at tax collectors -- and miss. ---Robert A. Heinlein)
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To: Gay State Conservative

I see several a week here on the west coast and the frequency of seeing them has been increasing.


46 posted on 08/04/2013 11:25:42 AM PDT by dragnet2 (Diversion and evasion are tools of deceit)
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To: Gay State Conservative

I saw one on i84 in Connecticut 2 weeks ago.


47 posted on 08/04/2013 11:29:00 AM PDT by njmaugbill
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To: ckilmer

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.

:-)


48 posted on 08/04/2013 11:30:48 AM PDT by unlearner (You will never come to know that which you do not know until you first know that you do not know it.)
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To: ckilmer

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.


49 posted on 08/04/2013 11:33:06 AM PDT by Scott Ales (Part of the problem or part of the solution, which are you?)
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To: unlearner

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.

http://www.forbes.com/sites/patrickmichaels/2013/05/27/if-tesla-would-stop-selling-cars-wed-all-save-some-money/


50 posted on 08/04/2013 11:34:57 AM PDT by nascarnation (Baraq's economic policy: trickle up poverty)
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