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|Subject: Re: BEVs have lost their luster...||Date: 2/5/2013 11:04 AM|
|Author: JustMee01||Number: 17397 of 18099|
"Promising to come out eventually with a mass market priced car."
This is the test I'm waiting for on Telsa. It's one thing to niche the 100k BEV market and do well (i.e. room for margins - with few competitors). However competing with the leaf, the volt - which none of these have made the bank coffers any fuller for their respective companies.
I'll take the opposite side of this. Tesla needs to stay on the niche market side of things.
Would Coach succeed making a $5 handbag that sold for $30?
Will Apple succeed making a $300 iPad? A lot of people don't think so right now... (Sorry Rob; tell me when it turns and I'll climb on board AAPL with you...)
Tesla does not make a commoditized product. Right now they make a niche-segment novelty and sell it at a high price. It might as well be a Coach handbag or a Rolex watch. That allows them to make money. Simultaneously, it eliminates the practicality issue. People who are buying a Tesla are buying it for the same reason that early adopters grabbed a tablet. It's cool in their opinion. Practicality was not an issue. A Tesla (or any premium car for that matter) is more of an affectation than it is a vehicle.
It says that I have money.
It says that I want to save the planet.
It says that I'm on the cutting edge.
It says that I'm way, way cooler than you.
And your girlfriend wants me, by the way...
What else says that in one neat little package?
When you turn around and try to hit the mass market consumer, you get a completely different consumer that you're marketing to. And they won't get the same margins, by definition. Couple that with the fact that the segment is so small, given the infrastructure and practicality issues as Skepik points at, and you have a losing proposition.
That consumer has limited money.
That consumer can't worry about the planet. He needs to eat.
That consumer is by definition, not cutting edge.
That consumer does not really care how cool you are, because he thinks the Tesla-guy is a dork.
And Tesla-guy can have his girlfriend. As long as he doesn't take his damn dog!
Tesla making money is a surprise to me, so I could easily be wrong. But I don't think that moving mass market will help. It will hurt, because is will shrink margins as it ramps capex to access a fringe segment of a commoditized industry. That's not often a recipe for success. That's stupidity. My advice to Tesla is to stick to its knitting and keep surprising me by selling cars to 'Tesla-guy'.
JMO, and I freely admit that it's not even worth two cents.
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