kdh wrote:BeauV wrote:Well, Keith, ..... If I were the guy building high end BMW and MBZ cars I'd feel pretty disrupted.... From 2016 data, the last year I can grab.
"The electric automaker’s rare disclosure of its sales figures shows that the number of Model S vehicles sold in last year’s third quarter grew from around 5,800 to approximately 9,200. Tesla has now captured nearly a third of all sales in the category, the automaker said.
The announcement reflects the rising popularity of the Model S over similar cars from rivals like BMW and Mercedes. In a chart compiled by Tesla (TSLA, +0.48%), the Model S's closest competitors were the Mercedes’ S-Class and the BMW 7-Series, which pulled in sales of around 4,900 and 3,600 respectively, according to the report.
SourceFor the rest of us, probably doesn't feel like it. The Model-X doesn't seem to be disrupting the high-end SUV market as much as the Model-S did to sedans, where they took 1/3 of the market with a brand no one had heard of in only a few years. A market that folks like Lincoln and Cadilac would DIE to even be listed within.
This raises an interesting issue for me with Tesla's strategy: they've clearly succeeded as a luxury brand, but introducing the Model 3 has the potential to hurt that brand image.
For me the brand appeal is that it's cool and new, and their cars are on the whole well executed. They're truly modern cars. Remember when only foreign cars could be cool? Not so any more.
I'll still maintain that from an investment perspective the stock price is in rarified territory. It won't stay there.
100,000,000% agree on the stock being overpriced. That percentage is one of those "marketing numbers".
Yes, going down market will ultimately hurt the brand. Which MBZ discovered when it started selling the "C-class" and "E-class" in the US and devalued the "S-class" brand. But you can't survive as a Luxo-brand in cars. Without volume, you'll die for operational reasons.
I think Elon's strategy is pretty solid.
1) Start with a market segment (sports cars) that does
NOT give a shit about price, comfort, details. They just want fast-n-fun. That was the Roadster.
2) Then shift to the Luxo market, that does
NOT give a shit about price, but
does care about comfort and details. So this will teach your company about the details.
3) Next, start moving down market to the really hard products - mid-sized sedans. Now your customers care about everything and want "cool" too. This is what the Model-3 will teach them. (Is teaching them - my son-in-law is putting in 80 hour weeks and has been battle-field promoted three times in 1 year.)
4) Finally, you move to low-cost high-volume cars - the hardest thing in the world to build. Tesla won't get there for at least a decade or two, they don't have the skill base. But if they do get there, they will kick the tar out of the competition because they have an immense advantage.
Simply put: their cars are much simpler mechanically and the other guys are way way way behind. Eventually, cars get priced based on weight and complexity. Light and simple wins. Heavy and complex loses.
To return to Keith's comment about stock price. No rapidly growing car company is going to be accurately valued by its stock price. On the way up, they will be supidly over valued. If they stop growing, they will be stupidly under valued. There is too much uncertainty, so the stock price is a poor measure of future performance.
