Sunday, October 30, 2011

Why Tesla's Model X is the perfect sequel to the model S

I have been following the rumors surrounding Tesla for some time. There has been chatter and hints from CEO Musk about the upcoming Tesla Model X. Specifically Musk has dubbed it "the coolest" cross over you've seen. I can't help but wonder what will make this bet at in the popular subset, cross-over vehicles, any different from an Infinity, BMW, or Nissan version?

However one cannot ignore the hype around the continued comparison of Tesla to Apple. With Tesla choosing to come out with the "Model X" following the "Model S" does actually seem to be a brilliant business move, and it is actually a move out of the Apple playbook. This move capitalizes on the new market Tesla is creating. They are creating a market for the car buyers who have families, good jobs, pay a premium for groceries at Whole Foods, and shop for athletic wear at Lululemon Athletica. Just look at the facts that are accumulating: The model S will have one of the fastest accretions of any car, and the largest touch screen in any production car; Tesla already has over 6,500 reservations for the Tesla Model S sedans, almost three times as many as Roadster owners. By the looks of these reservations I'd say that Tesla has found a great market to tap into. Tesla is opening its own stores in locations where its target market shops and makes lifestyle choices-boutique mall venues in upscale neighborhoods like Menlo Park and Santana Row in Northern CA.

Now consider this if all those 6,500 reservations holders buy a Model S, install the electrical hook ups in their garage. Assuming they will be happy car owners, (as seem to be Roadster and Nissan Leaf owners). When these upper middle class folks decide to trade in their old SUV or Crossover, Tesla will be just rolling out with their Model X crossover. Once an owner goes electric and never has to stop at a gas station again they will likely think very thoughtfully over adding another Tesla to their collection. This time it will be a "very cool" crossover with all wheel drive and probably better miles/ charge enabling a trip up to Tahoe with the family and skis.

What I am getting at is that Tesla has chosen the perfect vehicle for the model S lovers to fall in love with next. The Model X will quite possibly be that vehicle because of its great functionality and from the amazing interfaces and touch screens tesla is incorporating into its vehicles. The same crowd will likely add a second tesla to their collection. This model X will be built on the same platform as the model S theoretically increasing its margins on sales.

Now Tesla's third generation mass market car is supposedly going to come out after the model X. By this time I would hope the hype of Tesla owners would reach mass markets by the time Tesla has a mass market vehicle for cheap.
For a rough analogy lets look at how long it took Apple to go from the iPod in 2001 to the iPhone in 2007. That's 6 years of building customer appreciation for their brand of small portable devices. Tesla built the first Roadsters in 2008 and expects to roughly build according to rumors the mass market EV in 2015, which is 7 years after Tesla introducing the world to their brand of EV's.

Any thoughts on the degree to which this line of cars may catch on in the mass markets? People are always skeptical but when something amazing is packaged right and sold with the excellent marketing and distribution chains I wouldn't be surprised to watch these three vehicles to be game changers.

1 comment:

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