Examining Tesla's Competition, Part 2: Model X Competitors
Based on the awards won, customer reviews, and sales success, Tesla Motors Model S has been a remarkable success. In the next few years, Tesla is going to try to build on that success with the release of the Model X SUV. And with SUVs remaining popular, especially among families, it's time to size up the competition for the Model X.
When I was looking for the most similar offerings to the Model S in the first part of this series, I found that some of the closest comparisons came from BMW and Porsche . Likewise, these two luxury-auto makers produce some of the best comparisons for the Tesla Model X.
The Porsche Cayenne Hybrid is a way for luxury SUV buyers to save a bit on gas while thinking about the environment. However, the Cayenne Hybrid still gets only 24 miles per gallon on the highway. For a 380-horsepower SUV, that's pretty good, but the Model X naturally wins the fuel-consumption comparison hands down.
With the Cayenne Hybrid starting at $70,900 and the Model X expected to sell for a similar price, the two SUVs carry good price comparisons. However, I still see a market for both vehicles. The Model X has a strong appeal among those who use their vehicles for short or moderate trips or have another vehicle for long trips. But many people use their SUVs for long trips, and until enough people have confidence in the Supercharger network, gas or hybrid SUVs still have the advantage among this segment of the population.
Although BMW doesn't yet offer a hybrid SUV, we must consider future competition, since the Model X itself is still more than a year away from delivery. And looking down the road, we can see a potentially interesting offer from BMW.
Some reports show that the automaker is looking to develop a plug-in hybrid electric vehicle, or PHEV, version of its X5 SUV. Such a vehicle would probably have less range than a Model X, but it would have a gas-engine backup for longer trips. Although this sounds like a good mix with BMW's line of other hybrid vehicles, the PHEV X5 has no defined timetable, and reports say that BMW is still working on the batteries.
Since the automaker hasn't given a date for the PHEV X5, it's probably at least a few years off, since BMW would first need to solve the battery issues, and then actually build the vehicle and ramp up production. It could be competition for the Model X down the road, but it's unlikely to be a competitor when the Model X first hits the streets.
In many ways, the Model X and Model S are very similar vehicles. Even though one is an SUV and the other a sports sedan, they share the same platform to save on development and production costs. Similarly, price points between the two are closely correlated, and even the competition comes from similar companies. With the success of the Model S, the bar is set very high for the Model X, but if Tesla can execute well, the Model X could become the must-have vehicle of the luxury SUV segment.
Up next in this series: a look at what Tesla's planned Gen III sedan may find itself up against.
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The article Examining Tesla's Competition, Part 2: Model X Competitors originally appeared on Fool.com.Alexander MacLennan owns shares of Tesla Motors. This article is not an endorsement to buy or sell any security and does not constitute professional investment advice. Always do your own due diligence before buying or selling any security. The Motley Fool recommends BMW and Tesla Motors and owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.