Tesla VP: “We Don’t Compete With EVs”

FEB 5 2014 BY ERIC LOVEDAY 15

Tesla Display At 2014 NAIAS

Tesla Display At 2014 NAIAS

At the 2014 Detroit Auto Show (aka 2014 NAIAS), Tesla’s vice-president of corporate and business develop, Diarmuid O’Connel, made a curios statement:

The Tesla Model S At The 2014 NAIAS

The Tesla Model S At The 2014 NAIAS

“We don’t compete with EVs.”

We’ve been saying for some time now that the Tesla Model S is in a league of its own in terms of EVs.  Now, Tesla agrees.

O’Connel stated that the Model S “was designed to compete with other vehicles in its class such as the BMW 5 series or the Mercedes E-Class or S-Class.”

So, that’s the target market for the Model S?

If so, then as Motley Fool points out, the Model S slots into a large segment in the automobile world.  According to Motley Fool, here are the 2013 global sales results for the two high selling models mentioned by O’Connel:

  • BMW 5 Series: 366,992
  • Mercedes-Benz E-Class: 242,562

Using those figures, Tesla Model S sales have room to grow substantially.  However, we’ll note that the Model S costs at least slightly more than both the 5 Series and the E-Class.

Whatever the target segment actually is (E-Class/S-Class…5 Series/7 Series) for the Model S doesn’t matter really.

Model S sales will grow in 2014.  That’s almost guaranteed.

Tesla Model S In Detroit

Tesla Model S In Detroit

Source: Motley Fool

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15 Comments on "Tesla VP: “We Don’t Compete With EVs”"

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Diarmuid must have just refilled his hubris reservoir.

Of course they don’t compete with EVs. Is this really a surprise to you? There’s no other EV on the market that can touch the Model S in terms of range, performance and of course – price. Naturally this car is going after high-end buyers, not just those who want an EV. It is interesting to see the kind of numbers those other cars sell in – 100s of 1000s of units per year? Yeah, Tesla has room to grow!

Still, its more than a bit haughty for Tesla ‘officials’ to say such things. After all Brian, I own a Roadster but I’ve never felt it superior to your Leaf. Its a more fun drive to car in the summertime, but your Leaf is probably the more reliable EV and probably more comfortable.

I’ve test driven the S 3 times now, and, while a nice car, it is overstating things greatly to state that the car is a magical experience (most people I’ve had as observers are mesmorized by the huge ipad, but since I really don’t like touch screens, it doesn’t do much for me). Trim level wise, its about the same as a $27,000 Impala.

I’ve been critical of several aspects of the S, but it is good enough to still be considered an EV.

It would be funny if the Tesla executive said “We don’t compete with EV’s”, and then someone in the audience spoke up and said, “That’s ok, the car is almost good enough to be considered an electric car!”.

That would be something, Bill! This is why I like you – you’re a supporter of EVs who is solidly planted. You don’t get googly-eyed at the thought of the “magical” Model S.

Ultimately, the two things that I envy about the Model S are its huge battery (relative to my little 24kWh one) and growing supercharger infrastructure. Although we still don’t have any in upstate NY, I suspect we will have superchargers before CHAdeMOs. But I’m not smitten by the interior either. I am somewhat impartial to the technology being shoved in cars. Yes, a built-in nav screen is a nice, but ultimately it serves the same purpose as a Garmin (which I also have), or even my smartphone! For example, count me as one of those who actually likes that the eGolf has a traditional-looking dash board.

Right you are as always Brian: VW has made more EV car models than any other manufacturer… Now if we could only get 1 or 2 of them to a dealership.

And priced LESS than these competitors when you consider fuel savings and you HAVE to consider fuel savings unless you just plan to park it in your garage and never drive it.

If you can afford a $70k+ car, you may not consider fuel costs at all. If you can take on a nearly $800/mo car payment ($1600/mo for maxed out version), does $40/week in gas really register in your calculations?

By your same argument, would this person care about the price difference of a “mere” $10,000-20,000? I think Mark’s point was regarding the statement that “However, we’ll note that the Model S costs at least slightly more than both the 5 Series and the E-Class.”

Not only that, but this rich man who buys 60 plus thousand car is so mean that he calculates every thing. Now we all read that the price of a USED Tesla is $30k more than a new one. Yes MORE because there is more demand than supply. This a huge drive for the rich to buy the Tesla Model S NOW. It is a way for the rich to get the cick that they made a good finacial deal. Buy the model s for $100k use it eat in it make it dirty and sell it for more than what they bought it for. Perfect.

His statement is, “you HAVE to consider fuel savings,” when discussing the price of a Tesla. That’s an excellent argument for something like a Nissan Leaf in Atlanta, GA. There were stories on this site about the Georgia tax rebate being high enough that a Nissan Leaf was actually a free car if you considered fuel costs. But it doesn’t really fit with a discussion about the Tesla Model S. It’s a good point that electricity is cheaper than gas and that, over time, you can save some money. That argument helped me justify getting my Ford Focus EV (but it still doesn’t cover the price difference because I bought it in 2012 before the price dropped). I just don’t think that many people in the market for a $75k to $100k car are really worried about saving $2k/year (or whatever) in gas. Tesla seems pretty excited to list every other feature before mentioning anything about fuel savings. I think someone would need to be a somewhat extreme driver to have their fuel savings in a Tesla bring the effective price down to something other than a luxury car. So, Tesla correctly positions itself against other luxury cars. In my… Read more »

It’ must be an interesting situation to be in, when you’re not making something to sell, so much as inspire others to embrace, emulate and sell en mass… This almost never happens in the capitalistic / corporate world in the 20th 21st Century.

He is largely correct. They mainly compete with BMWs, Mercedes, Porsches, Audis, Lexuses, etc.

But the main reason why they don’t compete with other EVs is because no one else has built a long-range EV besides Tesla. Most EVs have less than 100 miles of range .. . and then there is a huge gap before Tesla comes in at 208 and 265 miles.

They also have a lot more room inside of them too.

Tesla is competing with expensive vehicles (E-Class/S-Class…5 Series/7 Series) that
– cost a lot of money to buy
– cost a lot of money to service and repair
– burn a lot of gasoline
– depreciate a lot

for example, look at http://www.motortrend.com/cars/2013/bmw/m5/cost_of_ownership/ and it is clear why Tesla is winning big against the luxury brands

At this rate Tesla could in theory build 100,000 to 150,000 Model S and model X cars a year if they sold them globally which in turn could eat up the production of his proposed Giga Factory along with existing world battery production to the point that they don’t have to care about building the model E or not and I think they are really not in a hurry.