Apple Inc. (NASDAQ: AAPL), the world’s most formidable consumer electronics company, recently announced that demand for the new Apple Watch has gone beyond expectations. However, Tesla Motors Inc. (NASDAQ: TSLA), the world’s preeminent electric car company, cannot find enough customers for its new supercar P85D.
Tesla offers the P85D on its website for $105,000, for those who want to pay cash. The delivery charge, in addition to the purchase price, is $1,200. The federal government gives a $7,500 tax credit to each buyer of the P85D. The company adds that gas savings over five years should reach $10,000. So, the net price comes to $87,500. Options can push the number several thousand dollars higher
The P85D has become the flagship of the Tesla model line. Zero to 60 in 3.1 seconds. For only $2,500, a first generation “auto pilot.” And, yet, the P85D is not sold out. Cars are still available in May, when the newest Tesla is launched. It takes only a $2,500 deposit in order to get into this short line. PayPal can be used as a payment method. American Express cannot be.
The P85D has gotten as much press as any other new car introduction since the Model T was first offered by Henry Ford in 1908. Ford sold over 15 million Model T cars before it went out of production in 1927. Tesla may not sell tens of thousands in the next several years. Based on its current, tepid reception, even that figure might be hard to attain.
Tesla management and car industry experts must be asking why the P85D has not been more successful. Tesla has received rave reviews for product quality and its pioneering technology. The most frequent answer seems to be that the Teslas are toys for the rich, and demand of those toys has slackened. Alternatively, most major car manufacturers offer, or soon will, electric cars, although some have tiny gasoline motors.
Tesla has not been able to maintain its reputation as a leader in the auto industry, if its share price can be used as a measure. Tesla stock recently moved close to a 52-week low. The patina has come off Elon Musk’s invention.
Tesla cannot claim that there is a long line of people waiting to get a P85D. This situation is nothing but bad news for Tesla.
Editor’s note: Someone named “Ricardo” (firstname.lastname@example.org), who claims to work for Tesla, made the following comment in a note to 247:
Regarding your piece today, the reason P85D is available in May is because we prioritize production and delivery of the performance version of the car.
We can’t figure out how this explains supply and demand.