Talking Tesla: Who is the Real Competition?
The Fool's own senior auto analyst, John Rosevear, sits down with Richard Engdahl for an in-depth look at Tesla and the electric vehicle market, as well as Chrysler's unique situation with Fiat .
In this video segment, Rosevear explains that Tesla's real competition isn't made up of the other electric or hybrid vehicles on the market today. The Model S may be electric, but it's set up to compete against similarly priced BMWs, Mercedes, and Cadillacs ... not the Chevy Volt or the Nissan Leaf.
A full transcript follows the video.
Richard Engdahl: Let's start with the topic that's most interesting to me in the auto space, which is the cutting edge; electric vehicles and Tesla in particular.
I'm always kind of amused and bewildered by people talking about Tesla and saying, "How can Tesla succeed? Look what happened with the Chevy Volt," or whatever -- trying to put all electric vehicles in the same bucket.
To me, especially having gone with Rex to test drive one of these Teslas and seeing David Gardner driving one around, it's clear to me that Tesla's competition is not other electric vehicles. It's the high-end sports sedans and the like.
John Rosevear: No. I've been saying since the beginning, Tesla's competition is whatever a buyer in the position to spend $70-80 grand on a car might otherwise buy. They're competing with the Lexus that person already has. They're competing with the BMW, the Mercedes, increasingly the Cadillac, the Infiniti, brands like that.
They're offering something of a different proposition because it's electric, but at the same time they have to deliver a car with an interior that an Audi customer -- because Audi has terrific interiors -- that an Audi customer is going to get in and say, "OK, this is good. This is something I will spend my money on. This is not junky. This is not some fly by-night thing."
It has to feel like a solid car, and the Model S is a great car. They did a great job on it. They got some real talent later on in its development; some folks from Volkswagen and some other major automakers, and they were really able to deliver. The first model was built to a high standard and executed the way you'd expect a $70,000 luxury sedan to be executed -- except that this has this innovative drive train.
Yeah, it's totally not competing with the Chevy Volt, which is really a hybrid in a different price range. It's competing with the BMW 5-Series, the new Cadillac CTS, things like that.
The article Talking Tesla: Who is the Real Competition? originally appeared on Fool.com.Fool contributor John Rosevear owns shares of General Motors. The Motley Fool recommends General Motors and 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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