The Time Is Coming For A Porsche And Tesla Rivalry

1 week ago by EVANNEX 25

Tesla

Tesla Model S races a Porsche 918 Spyder (Image: Limit Racing)

A RIVALRY IS BREWING BETWEEN PORSCHE AND TESLA

Classic rivalries – PC vs Mac, Beatles vs Stones, Tennessee Vols vs Florida Gators – are a good thing, energizing the fans and encouraging the players to bring their best games to the field. A healthy rivalry seems to be developing between Tesla and Porsche.

Tesla

Porsche Panamera 4 E-Hybrid

At the visceral level of the drag strip, the two are natural competitors – the Model S P100D with Ludicrous Plus and the Porsche 918 Spyder are, by most accounts, just about the two quickest production cars out there. Independent tests put their 0-60 times (2.2 to 2.3 seconds – see Wikipedia and Zeroto60Times.com) within a tenth of a second or so, so it’s anybody’s guess which one is going to win on a given track on a given day. There are plenty of videos of head-to-head match-ups for those who like to watch.

Just a couple of years ago, Porsche execs were saying that an electric car couldn’t offer the level of performance that their customers expect.

“There is no doubt the future will have battery-driven cars, but the great question is when. This technology has problems,” said CEO Matthias Muller. What about Tesla? “I cannot say anything about Tesla. I don’t know anything about Tesla.”

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Charles Morris.

Above: When a Porsche tries to keep up with a Tesla (Instagram: teszila)

Well, the company has changed its tune since then. Current CEO Oliver Blume recently said that he expects half of Porsche’s production to be electric by 2023. Porsche’s first all-electric vehicle, the Mission E, is expected to go into production in 2019, and the company is investing large sums at its Zuffenhausen plant. The company says it will have “over 310 miles of range” (presumably on the New European Driving Cycle, more generous than the EPA’s rating system), a 0-60 time of 3.5 seconds, and a new 800-volt charging system that will be able to charge to 80% in 15 minutes (and could also work with Teslas). Specs like these would make it a worthy competitor for Model S.

Porsche is also planning a second all-electric vehicle based on the Macan crossover. Blume recently told German business site manager magazin that his company plans to produce 60,000 units per year between the two vehicles – an impressive number considering that Porsche’s total 2016 production was around 230,000. And as Porsche moves closer to launching its electric vehicles, the company is now considering the possibility of ditching its diesel program altogether.

Tesla

A look at the Porsche Mission E concept car

With a high-performance sedan and a luxury crossover aimed squarely at Tesla’s Models S and X – and, more importantly, the will to sell them in quantity – Porsche could prove a formidable rival indeed.

Tesla and Porsche also have some things in common in the financial realm: both enjoy relatively high gross margins (the amount of money earned on each car sold), and both have grown quickly (or in Tesla’s case, explosively) by the standards of the auto industry.

Tesla

A look at the Tesla Model S and Porsche Panamera (Image: Evening Standard)

After May’s earnings call, analyst George Galliers of Evercore ISI wrote that:

“Tesla has the potential to achieve sustainable gross margins…double those of US peers [and] comparable to those of high-end German auto brands, while growing more like a rapidly advancing Chinese automaker.” He noted that if Tesla can sustain its 2016 gross margin of 25 percent, that “would place it above BMW and Mercedes and just below Porsche.”

Calling Tesla “an extreme growth story,” Galliers wrote, “To put Tesla’s growth in context, we note it took Porsche 10 years and four product lines to grow from around 35,000 units to over 100,000. Tesla is on course to achieve similar growth in only 3 years.”

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers. Our thanks go out to EVANNEX, Check out the site here.

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25 responses to "The Time Is Coming For A Porsche And Tesla Rivalry"

  1. Chris O says:

    I don’t think Mission E will be a direct rival of Model S. Model S is a spacious family saloon that will seat 5-7 and/or lots of luggage space where the Mission E strikes me as a typical Porsche poseur’s car that will seat 2+2+room for a golf bag.

    Of course if you don’t really need the interior space the great styling, no doubt great interior and (maybe) superior charge capabilities could make the Porsche the more attractive of the two depending on price. All that’s still needed is Porsche’s very own 350KW supercharger network;)

    1. mx says:

      No comparison is perfect.
      But, the coming BMW i3 Sport should kill a lot of Porsche Cayman sales as well. The FUN factor of an electric Vastly Beats Gas Engines to DEATH.

      It doesn’t matter they don’t match on the top end, the general drive around town in in the country in the i3 Sport just MURDERS the ICE experience.

  2. Ben says:

    The 918 is 25% faster than the Tesla around racetracks like the Nurburgring. Dont compare what cant be compared. Regarding quality Porsches are perfect, lightyears ahead. Most Porsches are not meant to be family cars. Customer base wont be the same.

    1. Rick says:

      Wrong comparison, unless Tesla decides to become a sportscar brand. Porsche is not exactly focused on drag racing (an American thing) or making the most spacious vehicles. They’re driver’s cars, period. Can’t wait to see what they do with 800V charging.

    2. BenG says:

      True the 918 isn’t very comparable to the Model S. 918 is after all a 2 seat race car, lol. It is amazing the S achieves equivalent acceleration with its 4000 lb 5-7 passenger body.

      The comparable Porsche is the Panamera, and Model S has been crushing it in almost every way.

  3. pjwood1 says:

    Sales rivalry, and that’s where it ends. Tesla have zero track aspirations, and Evannex rose colored glasses.

  4. Pushmi-Pullyu says:

    Tesla’s performance cars do well in drag racing, both stoplight drag races and track drag races, but I don’t see a lot of Porsche drivers engaging in that sort of knuckle-dragger activity. I think they are more serious about their cars’ performance, and no Tesla car could possibly compete with a high-end Porsche in a road race or any race longer than 1/4 mile.

    1. Roy_H says:

      I agree, they won’t really become rivals until Tesla brings out their new Roadster.

      1. BenG says:

        Porsche produces the 4-door Panamera, which is a Model S rival as an $80,000 sport-luxury sedan, and they produce the Cayenne S which is a Model X rival as a $70,000+ sport-luxury CUV.

        I expect Tesla has quite a few conquest sales from people who would have bought one of those two Porsches.

        1. Pushmi-Pullyu says:

          Yes, I’ve read that the Panamera is geared for fuel efficiency rather than performance, so no doubt a Tesla car can “smoke” one of those.

          Perhaps the exception which proves the rule?

  5. jpo234 says:

    There is still a misunderstanding of what Blume said. There are three full EVs in the Porsche pipeline. First comes the Mission E. Than there will be some kind of a Cross Over on the same platform built in the same factory. This factory is sized for 60000 vehicles per year.
    Later on Blume wants to make the next generation of the Macan EV only. Together the Mission E, the unannounced Cross Over and the next Macan could account for more than 50 percent of Porsche’s sales by 2023.

    In fact, Blume’s marching orders from Group HQ are to make Porsche into a highly profitable German Tesla.

  6. Name says:

    Added advantage of Porsche is frequent trips to their head Quaters to get the 800-volt charging .
    With Tesla only local trips on roadsides 🙁

  7. SJC says:

    It would have to be an EV Panamera at a better price.

  8. Windbourne says:

    Wow. I’m amazed at the total lack of humility in many of you. Every step of the way, Tesla has dealt with others claiming that Tesla could not build sellable EV; then it was their batteries would need replacement every couple of years; then they could not build them to be quick;then it was that they could build them to be profitable( which it is now known that Tesla has margins over 33% on MS/MX, and it appears that M3 will be over 40% ); and now a number of you are saying that Tesla can not compete against porsche and other legacy cars.
    Amazing.
    The 918 Spyder is a 2 seater roadster devoted to making everything top end. In fact, it started at $845,000.
    Tesla is a regular luxury sedan which tops out at $150,000.
    And yet, Tesla is as quick.

    The tesla roadster is coming in 2-3 years. I have little doubt that it will blow the doors off every production car that has been made at this point. And it will no doubt be less than 250k.
    Yet a number of you will say that it is impossible, just like the legacy car makers claim all that prior junk.

    1. arne-nl says:

      “and it appears that M3 will be over 40%”

      Do you have a source for that?

      1. BenG says:

        His source the BS factory.

        Though he makes a good point about the 918 to Model S comparisons.

      2. Chris O says:

        Looking at the option list and assuming that most will tick paint, battery and tech which brings the price at $50K (which I think could be closer to the average sales price than the $42K Elon Musk once claimed Tesla was shooting for) gross margin for this vehicle should be very healthy indeed.

    2. Pushmi-Pullyu says:

      “…it is now known that Tesla has margins over 33% on MS/MX…”

      Perhaps it’s “known” to you, but certainly not to the rest of us. What is known to me is that Tesla has reported gross margins of (as best I recall) between 22-27% over the years for the Model S. I’ve never seen any such report for the MX, but the margin has to be lower, because Tesla hasn’t had as many years to reduce costs or amortize R&D and tooling up costs away.

      “…and it appears that M3 will be over 40%…”

      Certainly not anytime soon. Perhaps after Tesla builds the “alien dreadnought” touchless production line in a year or two, but that 40% may well turn out to be aspirational rather than achievable.

      Windbourne, whatever source you’re getting your numbers from is highly suspect, and you would be advised to treat it far more skeptically in the future.

      “…a number of you are saying that Tesla can not compete against porsche and other legacy cars.”

      No, we’re saying that Tesla is not attempting to compete in the same market segment as Porsche. Nobody here said anything about other legacy auto makers, and it’s quite clear the Tesla is competing well with such auto makers as BMW and Audi; perhaps out-competing them, altho it’s hard to tell since Tesla has only two models on the market, plus the Model 3 just now entering.

      Apparently you’re new here, Windbourne. Most of us, including me, are Tesla fans. We’re just not wearing rose-colored glasses like you are.

      And if you doubt what we say about the limitations of racing Tesla cars is true, then just Google [tesla autobahn reduced speed] or [tesla nurburgring] and read about the reality for yourself.

      1. arne-nl says:

        “but the margin has to be lower, because Tesla hasn’t had as many years to reduce costs or amortize R&D and tooling up costs away.”

        That’s not how I understand margins, usually called ‘gross margins’. It is the cost of production relative to selling price. Production cost exclusive of SGA, R&D, etc.

        From a Seeking Alpha article:
        “Tesla defines gross margin similarly to most other companies outside the automotive industry by including R&D in Operating Expenses (OpEx) rather than Cost of Goods Sold (COGS).”

        From various other sources (investopedia) I know that SGA are considered fixed costs and thus not included in ‘COGS’.

        But I’ll readily admit I’m on thin ice here.

        1. arne-nl says:

          Aargh, how i HATE the absence of an edit button or even a simple preview? Inside EV’s, can you pleeeaaaasssse add that feature?

          1. Timmy says:

            Hear, here ^^.

            Just go to Disqus, already.

            I often choose not to even read an article+comments because of this pathetic commenting system. Now, like you, I’ll have to keep the tab open and refresh it later, just to see if anyone’s replied.

        2. Doggydogworld says:

          You are correct Arne, Tesla’s gross margin does not include any R&D, amortized or otherwise.

          Gross margin does include tooling amortization, but their method does not penalize them for low initial volume. The reason gross margin is bad when they first start a new model is excess labor costs.

  9. arne-nl says:

    “and it appears that M3 will be over 40%”

    Do you have a source for that?

    1. arne-nl says:

      ignore

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