There seems to be a "Prophet of Our Times" cast-type being placed on Elon Musk. He saw the internet and said the yellow pages will be replaced by an online business directory. And it did. Compaq bought, and he became an instant millionaire. Then he looked to make financial transactions a smooth, completely online experience. Boom. Enter PayPal. So eBay gives up their own online payment system and buys Paypal for 1.5 billion. Then he's decides that he needs to mass market solar energy. Investment into his cousins' Solar City company leads to it becoming the biggest supplier of solar energy panels in the US. Then he feels humans need to go interplanetary, so he reads up on rocket technology and founds Space Exploration Technologies (SpaceX) with his sight on colonizing Mars. Whether you are on board with all of his ideas or not, you have to admit that this is a guy who sees what he wants to change and believes it enough to go for it.
And, of course, he wants to revolutionize transport and get us off of oil and gas. So along comes Tesla Motors. The point of it? To prove that an electric car can perform at a level that would make it a desirable alternative to gasoline engine cars. And in so doing, he hopes to jumpstart the electric car industry worldwide. And guess what...
Yes, there are a host of other car companies who are releasing their own line of fully-electric cars this year. And yes, it is likely that they are trying to get a jump on Tesla's production of the Model III in late 2017 in order to break into the market. Their hope is probably to try and coerse Tesla watchers to consider their "ready-for-you-now" EVs and give them a try. What Citron doesn't realize is... all this activity is a good thing for Tesla Motors. They are fulfilling their vision for wide-spread EV distribution.
You see, those of us eager to plunk down $1K to reserve our Model III aren't bandwagoners. Sure, we'll probably take the Chevy Bolt out for a spin. We'll eagerly read all the latest news on every new electric car that comes to market while we wait for our Model III to go into production. But we aren't doing that to shop around. We are simply enjoying the "advent of sustainable transport" come to be. We aren't sold on Tesla just because it's a great car (and it is!). We are sold on Tesla because we believe in the vision the company stands by. I mean, when was the last time you heard a GM consumer say "I believe in the company's vision"? Betcha had to think real hard. And, of course, it helps that after reviewing other EVs, Tesla still comes out on top when it comes to performance and ingenuity. There are those among us who have been waiting for the Model III back when it was just "Phase 3 of a three-phase roll out plan" almost a decade ago. We saw the new Roadster, we salivated, we secretly hoped for an economical version of it, we heard Elon Musk say "that's what we want to", and we started our "Tesla Life Watch" eager to get in on it all. In the end, we WILL buy a Tesla. The conversion was already complete before Elon even said "Model III."
So let's look at what Citron might be seeing:
2014: Tesla's Model S production was far below demand. But eager Tesla owners were willing to wait knowing that the company was still small and growth never happens overnight.
2015: Model S production doubles to meet demand and by year's end, buyers wait only about a month before they can pick up their Tesla purchase. The Model X is introduced, but buyers end up waiting longer due to a dispute with the falcon door developers. Tesla Motors has to retract their contract with the German company and go to the next in line in the bidding war.
At the time, the main competitors of the Model S (introduced in 2012) were the Chevy Volt (introduced in 2011) and the Nissan Leaf (introduced in 2010). And when you consider how Tesla Motors faired in that market, I think it's fair to say that it was a win for them. They got the press they needed to continue on their rollout plan towards the more affordable Model, and both the Leaf and Volt gained enough momentum to stay in production and even spawn more EV competitors.
Now that 2016 is here, the Chevy Bolt will be available, the Nissan Leaf is being revamped, and a whole host of other EVs are being introduced. On Tesla's side, the Model X's are now being delivered and orders are slowly beginning to be filled. The Model S continues to gain interest. And now the Model III is finally on the horizon, there is potential for an instantaneous billion dollars in revenue the moment the unveiling is complete.
So if you look carefully, there's two potential errors that Citron is making in their "supply and demand problem" projection with Tesla. Now remember, they are not showing all their cards. That would be dangerous for them. So this is me just trying to get into their heads to figure out what the hell they might be thinking. (roll eyes here)
The first possible error, is that they think the demand for the Model S will dry up. The Model III isn't coming out until late 2017 (or more realistically, 2018), so for this year, it's all about selling Model S's and X's. But I'll focus on the Model S for the sake of simplicity. Tesla wants to increase their production even more this year (and every year thereafter), even though the current wait of 1 month to have your Model S delivered is already pretty reasonable. And with a whole host of other luxury EV Models now coming on the market, they are banking that those considering the Model S may be swayed to go after a BMW or Audi EV instead. But they are forgetting one thing -- the software updates. You see, it's not enough that Tesla is the only EV that provides autonomous driving, or that generally, a Tesla purchase actually improves over time just by virtue of having a super computer and wifi installed in the vehicle itself. What they forget is that Tesla Motors is still a small company with only 2 models in active production. Unlike a major car company with a host of gasoline models that push their EV development down on the priority list, Tesla's ability to implement new development is virtually unhindered. This means your new Tesla purchase could experience so many software updates in a given year, that you may feel like your vehicle is constantly regenerating into a new life form on a regular basis. I'm not sure that any EV in or entering the market can boast about this the way Tesla can.
|A small sample of proud Tesla owners. There were just too many to do them all justice.|
The reason why I believe Citron is under-estimating the eager Tesla owner is that they forget that they are fighting years and years of information that Tesla watchers have fed themselves in anticipation of the Model III. This upcoming announcement to finally unveil the more affordable Model III is what we, the Tesla fans, have been waiting for for...well, it seems like a lifetime. To think that we would just turn to feed our need for instant gratification by buying an EV from one of the other car companies just when the Model III is finally being introduced is complete nonsense. The longer you wait for something, the more committed you become. And these hopeful Model III owners like me want to become a member of the Tesla club. This is how humans behave. Reading numbers without understanding this basic human instinct is why Citron (and other shorters) have been led astray.
As for the other potential EV owners who are not sold on Tesla yet, I'm insinuating that they have not yet scoped out the Tesla enough to make any informed decision on any EV purchase. The Tesla Model III will certainly be in their sights as an option. So with the pool of future EV owners who are not following Tesla (who are these weird people considering EV's and not knowing what Tesla is about???), Tesla will certainly get a portion of that share which is simply an increase on their already solid customer base.
In short, (no pun intended), Citron is definitely barking up the wrong tree on this one.