Ready or Not, Tesla Is Expanding Across the Globe
If you thought Tesla's 2013 expansion was impressive, wait until you see what the company will do in 2014. Tesla CEO Elon Musk is not taking Tesla's international expansion lightly.
In case you missed it, Elon Musk recently shared with Automotive News that he hopes Tesla can deliver 250,000-500,000 vehicles per year globally by the end of the decade.
Importantly, Musk explained that he isn't entirely confident in this bold goal. "We have a lot of work to do. We'll do our best to make it happen. I think we will, but this is not a bold assertion we unequivocally will. There is a possibility we may not," Musk told Automotive News journalist Mark Rechtin.
Tesla almost certainly won't hit numbers like this if it doesn't build a solid foundation for international sales beyond North America. Fortunately, Tesla's already moving rapidly on this front. In fact, Tesla's last quarter marked its first deliveries outside of North America, and deliveries to Europe already accounted for 18% of sales.
So what exactly is Tesla is doing to expand internationally?
The year of Tesla's rapid international expansion
From Europe to China, Tesla is expanding globally on every front.
Europe: Beyond Tesla's European deliveries in Q3, a large portion of Tesla's 6,900 deliveries in Q4 probably went to Europe as well. The company said that it finished Q3 with production significantly exceeding deliveries "in order to fill the pipeline of vehicles in transit to Europe..." The jump in European deliveries echoes the expansion of its charging network across the continent.
By the end of Q3, Tesla had only just begun building out its supercharging network in Europe, with little more than a handful of the Supercharger stations in Norway. But that's changing quickly. With a new focus on Germany, Tesla is already building out its charging network rapidly in the country.
And Tesla doesn't expect the expansion to slow down after Germany. Its plans for its European Supercharger network expansion are staggering.
By March 2014, we plan that more than half of Germany should be covered, with complete coverage by mid-2014. By the end of 2014, we expect that the entire population of the Netherlands, Switzerland, Belgium, Austria, Denmark and Luxembourg and about 90 percent of the population in England, Wales and Sweden will live within 320 km of a Supercharger station.
China: Tesla plans to begin Model S deliveries in China in the first quarter of 2014, according to its third-quarter letter to shareholders. Our most recent update on Tesla's progress in China comes from Tesla vice president of corporate and business development Diarmuid O'Connel who says that Tesla has seen "tremendous" demand in China from a "progressive cadre of folks who are making reservations sight unseen, pricing unknown," according to The Wall Street Journal.
Further, O'Connel also said that Tesla plans to build out its no-fee Supercharger stations in the country and that he is confident Tesla can overcome any challenges that would prevent it from them from setting up the network there.
Without specifying the region, Tesla also said it plans to double its service and sales locations in 2014.
A supply story
Considering that Tesla is supply limited, investors will be watching the company's efforts to boost production in 2014 very closely. Hopefully Tesla will provide an update on its expectations for 2014 production when it announces Q4 results in early February. For now, the last update we had on Tesla's 2014 production schedule was a Q2 estimate for annualized Model S sales that "could exceed 40,000 units per year by late 2014."
The major takeaway for investors is that, given Tesla's aggressive international plans, demand won't likely be a problem for Tesla in 2014 -- so investors should keep a close watch on Tesla's ability to continually ramp up production.
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The article Ready or Not, Tesla Is Expanding Across the Globe originally appeared on Fool.com.Fool contributor Daniel Sparks owns shares of Tesla Motors. The Motley Fool recommends Tesla Motors. The Motley Fool owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.
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