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.
It just shows that rich people cam afford luxury toys.
High rollin’ libs with more money than brains.
Yeah but what happens to the price of oil if electric cars grab an ever larger piece of the automobile pie.
Ping.
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.
The pipe dream of an electric car dies hard among the wealthy, eco-loonies of the Hard Left.
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.
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.
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.
With 0scumbag shutting-down scores of coal-fired power plants, how are they going to charge the EV cars? Windmills?
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.
Nothing much will happen. If by some means the true market forces work this corrupt government will just tax it more.
Coal is at 37% of US electric generation and dropping fast.
Our antiEnergy Dept. will devise a mandatory receptacle and plug with a meter to collect tax on EVs.
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.
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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.
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