Tesla's Smart New Product Plans

Unlike most automakers, Tesla Motors (NASDAQ: TSLA  ) has never tried to keep its plans for future products secret. Late last week, CEO Elon Musk said that he has two new products planned after the upcoming Model X SUV -- both of which will have more affordable price tags.

In this video, Motley Fool contributor John Rosevear takes a closer look at Tesla's product plans, and explains what the company is likely thinking -- and how its plans should help maintain strong profits even as it increases its production volumes.


Read/Post Comments (11) | Recommend This Article (7)

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  • Report this Comment On June 04, 2013, at 2:23 PM, Monty116 wrote:

    Tesla article #103

  • Report this Comment On June 04, 2013, at 2:31 PM, Brettze wrote:

    Tesla shareholders are bracing for the inevitable hogwash yet to come from freaked out gasohols so maddened up about all the potential disruptions that all electric vehicles like Tesla can bring. Can the SEC do something like freezing the stock until all the raised stink has gone away?

  • Report this Comment On June 04, 2013, at 2:36 PM, Brettze wrote:

    I dont expect the SEC to oversee every single stock , but at least there is a shareholder like me who brings this matter up.. I have every reason to believe that it is an important issue for the SEC to review and take appropriate action to prevent troublemakers from trying to ream courageous shareholders needlessly. It is up to shareholders to alert the SEC in timely manner. The SEC better act soon before it is too late as Tesla stock price can really plummet so easily!!

  • Report this Comment On June 04, 2013, at 2:47 PM, Brettze wrote:

    Fossil fuels is a huge cause of rampant cases of cancers of all sorts! The SEC has to understand that despite the fact that is a health issue which is not in the jurisdiction of SEC itself. We have Homeland Security Act which united all security departments together in coordination. It is about time that we form another kind of umbrella act that unites other unrelated departments like EPA, Health, Energy, Treasury, State, etc together to coordinate together on equally important matters facing us as unsolved !

  • Report this Comment On June 04, 2013, at 7:30 PM, TMFMarlowe wrote:

    @Monty116: For what it's worth, I write about (or talk to the camera about) the global auto business and auto stocks, including Tesla, day in and day out. That's what I know, and I've spent years at this.

    @Brettze: What? Tesla's doing great for a niche automaker, but in terms of disrupting the global auto business... Tesla in its whole history hasn't sold as many cars as Ford sells pickups in a slow month. It's a long way from here to there.

    John Rosevear

  • Report this Comment On June 04, 2013, at 11:37 PM, Jazzenjohn1 wrote:

    How many Tesla's have they sold compared to the top of the line Lincoln? That would be a fairer comparison, and quite a bit closer numerically as well.

    It's a long way from here to there isn't an argument, its merely a comment and not a particularly insightful one at that. Tesla may not end up being the final disruptor of the auto industry, but it very well may. Bypassing dealers, Full range Electric vehicles, company owned recharging stations, High speed rechargers, high tech batteries, Tesla has brought all these to the marketplace and some or all of them may be adopted, but traditional auto manufacturers having built cars for over a century didn't bring any of this to the public, Tesla did in the few short years of its existence. I happen to think they have a reasonable shot at success, but the nature of the disruptor is such that the ideas and technologies are brought into the marketplace and if the old line automakers won't or can't compete, they will eventually lose. So far, there is no credible competitive product from any existing automaker to the Tesla, none for the Supercharger network, and none for the dealerless sales model. They have had plenty of time to do any or all of those things but none have done so. How much exactly is all that worth? What economic model displays any of that?

  • Report this Comment On June 05, 2013, at 7:49 AM, TMFMarlowe wrote:

    @Jazzenjohn1: I don't buy much of your argument.

    Battery electrics are only one of several possible paths for the future of the automobile, and they're one that the mass-market automakers have chosen not to pursue until/unless better battery technology appears. Tesla has made it work for a niche market using battery cells that are available to anybody. Whether that spawns any imitators at all, much less represents the future of automobiles, is very much an open question.

    Have you noticed that Tesla's "high tech batteries" are built out of the same Panasonic cells that Ford is using in its plug-in Fusion and C-Max? Or put another way, at least one mass-market automaker is doing its R&D on Tesla's tech approach in plain sight, with products that are more accessible to mainstream consumers. They are certainly not the only one digging into this stuff. How many Tesla investors are paying attention? How many Tesla investors really understand that all of Tesla's potential competitors have them way way outgunned in terms of scale and market penetration? You really think Honda or Toyota or Ford or GM or VW or BMW "can't compete"? I thought you understood this business. Unlike Musk's other companies, this ain't rocket science. It's batteries and an electric motor and a CVT.

    You make way too much out of the Supercharger network, which is a marketing tool, a way to overcome objections from early adopters. It's not "Tesla owning the infrastructure".

    Meanwhile, right now, there's plenty of credible competition to the Model S. 5 Series, A6, E Class, the upcoming CTS, Lexus GS... they're all fine cars and viable alternatives. None of them are battery electric vehicles (yet), but so what? If Tesla proves there's a sustainable market for premium battery-electric vehicles, there will be more battery-electric luxury cars appearing pretty quickly, likely from that very list of brands. You think GM or VW lacks the resources and know-how to build a car that would rival the Model S? Seriously? You remember that GM has been playing with BEVs for 20 years now, right?

    But they won't move quite yet. Tesla is still getting cars to the early adopter crowd. Whether they can break out from there -- whether they can "cross the chasm" as we used to say in the dot-com days -- is still an open question, and that's likely why the big guys are still sitting and watching and hedging their bets. If Tesla's pace of deliveries falls off... watch out. And if it doesn't... you'll see some very interesting "concepts" at NAIAS next year or the year after.

    Long story short, Tesla's execution has been great and the car is terrific, but yeah, it's a long way from here to there.

    John Rosevear

  • Report this Comment On June 05, 2013, at 10:48 AM, Speakeasy1920 wrote:

    John, I appreciate your commentary. Reading it reminded me very strongly of the Apple iPhone vs Microsoft dynamic. Microsoft had all the money, revenue, margins, and even had been in mobile phones for years. They couldn't believe that somebody could make the iPhone work, or that people would pay high dollars as an early adopter. The legacy thinking and organization at Microsoft crippled them and they were many days late and many dollars short. How that happened is just amazing. The only company to survive that challenge was Samsung, who copied the iPhone as fast and hard as they possibly could while Apple was struggling to get to other markets/carriers.

    The markets are different, but having had the iPhone 1 and now the Model S, the Model S is drawing even more fascination than the iPhone did when I had it. I am constantly asked for rides, and about the car. Every single person has been astonished by it when they've taken it out. I had a crazy Ferrari to drive for a few days, and this is better than that.

    The car market does move much more slowly, but the car companies have their legacy thinking, unions, pensions, dealerships, software OS, and annual release cycles to overcome. I'm curious to see when you might think BEV's could be released by different manufacturers.

    Considering the batteries of Tesla as a commodity is a bit like thinking because the iPhone uses ARM (a common chip architecture) that anybody has the iPhone tech available to them. It's actually a strength for Tesla that they don't have to compete on brute force battery R&D that they do themselves. Throwing tons of engineers on a software project, for example, doesn't mean they will do it faster or better, and so the finesse of a great team (iOS) can wallop the brute force of a large team (Windows Mobile).

  • Report this Comment On June 05, 2013, at 11:26 AM, TMFMarlowe wrote:

    @Speakeasy1920: One big difference between MSFT vs AAPL and this scenario is that there's no one global automaker in a monopoly position. Rather, there are several large players who are already locked in fierce global competition with one another, and the pace of innovation among those players over the last 5-7 years has been remarkable. Tesla certainly represents a curve ball, but I think it's a very different dynamic, and I think the outcome is hard to predict. It's going to be fun to watch, though.

    Thanks for reading.

    John Rosevear

  • Report this Comment On June 05, 2013, at 11:37 AM, Teammunson wrote:

    John,

    Speakeasy stated my exact sentiment--only mine was more along the lines of the iPod and the Sony Walkman MP3.. it's only batteries and hard drives, any tech company can do that! But can they do it as well? In the case of the MP3 player, nobody could and I'm going to bet that in the case of the EV nobody will either. There's a good reason Consumer Reports gave the model S the first ever 99/100, and anybody that has ever driven the model S knows that.

    As for your point that the major auto players have Tesla outgunned on scale and market penetration, I respectfully disagree. You need to differentiate between the ICE market and the EV market. And scale of what? Engines, exhaust, cooling systems, turbos, belts, intakes? What about batteries and electric motors? Tesla has them all beat on the scale of electric vehicles and with growing demand will pull away at an astounding rate. Let's assume you're correct in that Ford could quickly bring an EV to market, can they also build the infrastructure to quickly charge the vehicle for free on a cross country road trip? That's not a a marketing ploy, that's genius. According to Musk "it's free. Not now, but forever". And to top it off the supercharging network is cash flow positive for Tesla. They own solar farms dumping more energy into the grid than chargers are taking out.

    Too many investors and car manufacturers are underestimating this company. Nobody is doubting that Ford, GM, VW, BMW can produce EVs, but each moment they wait they are that much further behind the 8-ball. I'm anxious to read what you'll be writing five years from now when there's a $30,000 Tesla capable of driving from LA to NYC.. It's a long way, but it's free.

  • Report this Comment On June 06, 2013, at 9:45 AM, TMFMarlowe wrote:

    "I'm anxious to read what you'll be writing five years from now when there's a $30,000 Tesla capable of driving from LA to NYC."

    Me too, because I'm very curious to see how this story plays out. No matter what happens, though, I'll still be writing about Tesla and its competitive universe as I see it. If I'm wrong about the competitive threat to Tesla as I see it today, I'll own it and learn from it and try my best to see that my readers learn from it as well.

    Regardless of what a few writers with fragile egos might think, nobody is ever entirely right in the investment business -- or even close. I worked at Fidelity years ago, when it was a much smaller place, and I remember Peter Lynch saying over and over that you just had to bat a little over .500 to be successful as an investor over the long haul -- and even that's hard.

    Thanks for reading.

    John Rosevear

    ps: I bet it's more like a $40k Tesla than a $30k Tesla, and I bet it'll have an options list that'll take it well up from there. They seem to be following the BMW model...

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