New report says electric car maker Tesla's rise in the EV market shows no sign of stopping
31 October 2014

Tesla could be building 500,000 EVs a year, according to a report produced by automotive analysts at International Strategy and Investment.

ISI has told investors that Tesla has a major advantage over the competition in that it will not face significant rising costs as global CO2 emissions regulations become ever more onerous. The business case for a premium electric car also seems to be compelling, according to ISI.

While Land Rover and Porsche are realising profit margins of 15-18 per cent – the highest in the mainstream car industry – Tesla could be in line for margins of 25 per cent, rising to a possible 30 per cent by 2020. 

ISI has told investors that it believes Tesla to have a “tangible lead” in both product and technology and that battery electric vehicles (BEVs) are likely to be the “optimum solution as original equipment manufacturers pursue tailpipe emission-free cars” rather than cars with hydrogen fuel cells.

ISI said: “[Tesla] has a market-leading product for which there is no obvious competition [and] has already created substantial brand equity through product and innovation. Global legislation, namely emissions regulations, is a tailwind [for Tesla] yet a headwind for the [premium] competition.”

Tesla’s estimations suggest that the cost of batteries should fall by about 30 per cent, with ISI estimating a 13 per cent drop in the factory cost of the Model S by 2020. Mainstream car makers, by contrast, will be faced with rising costs as they switch to hybrid transmissions to meet CO2 regulations. 

Tesla is also poised for greater success in China, ISI has asserted, not only because premium car sales in the country are booming but also because the Chinese authorities are pushing for a much greater uptake of BEVs. 

Estimates quoted by ISI suggest that China wants as many as five million BEVs on its roads by 2020, along with some 4.5m charging points. 

On the open market, ISI said Tesla is attracting buyers from Mercedes, Lexus and BMW as well as pulling in significant numbers of Toyota Prius customers looking for a premium upgrade. 

The nature of Tesla’s increasing competitiveness in the marketplace became clear last week when Daimler sold its four per cent stake in Tesla, raising £487m. Analysts suggest that the move shows how Tesla has now become a serious rival for premium luxury car makers, rather than a technical partner.

Get the latest car news, reviews and galleries from Autocar direct to your inbox every week. Enter your email address below:

Our Verdict

Tesla Model S
The Tesla Model S is an upmarket rear-wheel-drive electric saloon

In theory, this all-electric luxury car looks a hit. So is it in practice?

31 October 2014
How does this even make sense.......'The nature of Tesla’s increasing competitiveness in the marketplace became clear last week when Daimler sold its four per cent stake in Tesla, raising £487m.'??!!............What if Daimler and Toyota sold their shares because they knew this is the best time to cash out!!.........Tesla's US sales fell 26% in September!!........Some analysts doubt they will achieve this years target of 35k sales.......35k let alone the 500k God knows when?!.......Then comes the magic word 'China'..........China already has a lot of credible locally made electric car models with very supportive government subsidies. Despite this in 2013 of the 22 million cars cars sold in China only 6900 were electric......6900?!!.....How will such a challenging market become Tesla's saviour?!...........The only reason Tesla doesn't have competition in the west is because mainstream manufacturers haven't really been chasing the electric bandwagon!! It wont take the likes of VW, Toyota or BMW a lot to simply make a better electric car than Tesla!!....Then the report says 'as well as pulling in significant numbers of Toyota Prius customers looking for a premium upgrade'........Really?! Where are they?!....Because of Toyota's hybrid line up they sell more than 300 thousand Prius alone each year. So if a 'significant' number of them are looking to buy a Tesla, Well where are they?!.....I can understand the hot air US media is pumping up everyone's backsides as to why the 'American Tesla' is the next big thing......but why is Autocar jumping on this bandwagon?!...........I am no expert but this report makes no sense unless they can provide some real data to back up the claims.

31 October 2014
shortbread wrote:
Tesla's US sales fell 26% in September!!........
That's an outright lie posted by the WSJ… Sales are up %65 year over year. You need to chill out shortbread, cause you're going to see a lot more of Tesla and it's all going to be positive. Unless other car makers directly copy what they are doing, they're going to be left behind. The model X will break all model S sales records, and the model III will eclipse both of those combined (all that by 2018). They may never reach the heights of VW or Toyota, but that's hardly the yardstick for success. At least VW is embracing BEV, but toyota is going to find them selves up a very smelly creek with no paddle chasing this Hydrogen nonsense. But most importantly, just remember to breath and chill out.. and if you can't , I'm sure they can find a place for you over at FOX news.

31 October 2014
Charles b wrote:
shortbread wrote:
Tesla's US sales fell 26% in September!!........
That's an outright lie posted by the WSJ… Sales are up %65 year over year. .
No you are wrong. WSJ reported Wards figures for the cumulative 9 months, musk tweeted with figures simply for Sept YoY. You can see past the smokescreen if you aren't a musk lover!! This is their own making because tesla shy away from giving actual sales figures every month!! The truth will come out when they report their 3rd quarter results next week.
Charles b wrote:
The model X will break all model S sales records, and the model III will eclipse both of those combined
..........Sales records!!! Its not like the model S is selling in the hundreds of thousands, is it?!
Charles b wrote:
but toyota is going to find them selves up a very smelly creek with no paddle chasing this Hydrogen nonsense
Toyota are closing in on spending a Billion dollars annually on R&D. They or for that matter any of the other mainstream car makers have no difficulty in making a car powered by a battery connected to a motor. Its not rocket science like tesla tries to convince you!! Hydrogen is what Honda and Toyota are experimenting with, they are not claiming to rule the world with this!!..........the musk loving breed think he's the second coming!! Its a basic electric car in a saloon body, nothing exceptional. The very reason why musk has no problems in sharing tesla's proprietary 'technology'. Its environmentally friendly, no doubt, but its not even half the revolution the followers seem to claim.

31 October 2014
shortbread wrote:
No you are wrong. WSJ reported Wards figures for the cumulative 9 months, musk tweeted with figures simply for Sept YoY. You can see past the smokescreen if you aren't a musk lover!!
No you're wrong (and really angry too for some reason). Musk tweeted that Sep was a record high world wide and %65 increase YoY in north america, but hey why bother with facts, right. They're a publicly traded company, so sales figures have to come out, be that monthly or quarterly... makes no difference for us with normal blood pressure. They'll be reporting soon and you can rant about musk with all the fervent anger you please then.
shortbread wrote:
Sales records!!! Its not like the model S is selling in the hundreds of thousands, is it?!
You do know what a record is don't you? It's when they sell more then they did in the past. Honestly shortbread, we can't continue this discussion if simple grammar escapes you.
shortbread wrote:
Toyota are closing in on spending a Billion dollars annually on R&D.
And isn't crazy the crap they keep putting out after spending all that money. The simple fact is that established auto manufactures have basic conflict of interest in producing cars like the Model S. It is in fact, as you mention, not impossible for other car companies to do what Tesla has done (especially since they've relinquished all claims to their patents). But they'll ultimately end up killing their core business. That's why smart companies like VW is slowly moving into this space with a wide range of plug-in hybrids, then ultimately moving to BEVs. That being said, to dismiss what Tesla has done in just a few short years with "anyone can do that" claims is just silly… and angry. Seriously, no one really cares what musk does or says. He just happens to be the ceo of a company that will be responsible for the next evolution of the automobile (an opinion shared by most automotive journalists who've driven the model s). But the real question is why the all vitriol towards musk? Did you catch him in bed with your wife or something?

31 October 2014
Charles b wrote:
shortbread wrote:
No you are wrong. WSJ reported Wards figures for the cumulative 9 months, musk tweeted with figures simply for Sept YoY. You can see past the smokescreen if you aren't a musk lover!!
No you're wrong (and really angry too for some reason). Musk tweeted that Sep was a record high world wide and %65 increase YoY in north america, but hey why bother with facts......
Musk types nonsense and his followers eat it up like gospel!!.
Charles b wrote:
shortbread wrote:
Sales records!!! Its not like the model S is selling in the hundreds of thousands, is it?!
You do know what a record is don't you? It's when they sell more then they did in the past. Honestly shortbread, we can't continue this discussion if simple grammar escapes you.
No its the fact that I cant get it into your thick skull that these so called 'records' u claim of breaking are inconsequential in the world car market!!
Charles b wrote:
shortbread wrote:
Toyota are closing in on spending a Billion dollars annually on R&D.
And isn't crazy the crap they keep putting out after spending all that money. The simple fact is that established auto manufactures have basic conflict of interest in producing cars like the Model S. .......
Just more pro musk babble proving u know nothing about the auto industry!!

31 October 2014
shortbread wrote:
Musk types nonsense and his followers eat it up like gospel!!.
Angry.
shortbread wrote:
No its the fact that I cant get it into your thick skull that these so called 'records' u claim of breaking are inconsequential in the world car market!!
Angrier.
shortbread wrote:
Just more pro musk babble proving u know nothing about the auto industry!!
Angriest. Honestly shortbread, running out of weak arguments and resorting to angry comments doesn't make you an auto industry specialist. If we're being honest here, odds are no one posting on a message board is an industry pro. It's just interesting how people who review cars for a living (and have experience and expertise to measure their statements) can't say enough good things about the company and it's products. I know, I know… Bla bla bla, angry musk comment.

31 October 2014
Charles b wrote:
running out of weak arguments and resorting to angry comments ........
LOL........stop whining......Why dont you come up with some real facts rather than repeat some random musk propaganda?!

31 October 2014
shortbread wrote:
LOL........stop whining......Why dont you come up with some real facts rather than repeat some random musk propaganda?!
Really, "LOL" is your argument. How are easily verifiable facts propaganda (anyone who googles any of this stuff can work out the truth for themselves)? I said that people who test cars for a living like it and that they will be reporting their earnings soon... Oh Oh, is someone unsure of the definition of "propaganda", just like he was unclear on what "record" means. I guess the simple just recycle the most popular words they hear on Fox news.

1 November 2014
Charles b wrote:
How are easily verifiable facts propaganda (anyone who googles any of this stuff can work out the truth for themselves)? I said that people who test cars for a living like it and that they will be reporting their earnings soon...
What easily verifiable facts, you have given none?!! Reviewers like a lot of cars, u dont see manufacturers use that to pump hot air up the backsides of folk like you who know nothing about cars!!

1 November 2014
shortbread wrote:
What easily verifiable facts, you have given none?!! Reviewers like a lot of cars, u dont see manufacturers use that to pump hot air up the backsides of folk like you who know nothing about cars!!
You just mentioned the facts, the reviewers like the car and that they will be reporting their earnings soon. So to recap cause you're blind rage seems to have affected you ability to comprehend simple sentences: fact 1- reviews like car fact 2- will be reporting earnings soon. But hey, I don't know anything about cars like you do… Maybe if I did, I'd be able to miss the point of everything anyone says all the time too.

Pages

Add your comment

Log in or register to post comments

Find an Autocar car review

Driven this week

  • Ford S-Max Vignale
    First Drive
    24 June 2016
    The Ford S-Max Vignale is the company's premium executive express. Can it really be worth the extra over the standard S-Max?
  • Volkswagen Scirocco GTS
    First Drive
    23 June 2016
    Still a really fun and likeable coupé but the extra power doesn't justify the VW Scirocco GTS's high price
  • Ford Fiesta ST200
    First Drive
    23 June 2016
    Fresh from testing it abroad, we've just got our hands on the Ford Fiesta ST200 for a blat on UK roads
  • Alpina B4 Biturbo Convertible
    First Drive
    23 June 2016
    Alpina's appealing BMW M4 alternative arrives in convertible form with a more relaxed nature than BMW's M car but still impressive performance and handling
  • Infiniti QX30
    First Drive
    21 June 2016
    Likeable for its fair refinement and comfort, and that quirky rarity factor, but small inside and with merely adequate handling