Tesla Motors, Inc.'s International Expansion to Hit 15 Countries

One country at a time, Tesla's Model S is infiltrating new markets.

Jul 2, 2014 at 10:03AM

Already, Tesla (NASDAQ:TSLA) officially delivers the Model S in 14 countries -- including some in Europe and even Asia. Where's Tesla headed next? Australia, according to the Australian Financial Review.

Model S Snow

Model S. Image source: Tesla Motors.

Tesla in Australia
Tesla is "gearing up for a September launch," according to Financial Review. And the Supercharger network is coming, too. Financial Review's James Hutchinson says that Tesla "plans to build here the same superchargers that line US highways."

Tesla Right Hand Drive

Model S interior. Tesla is expanding to right hand drive markets this year. Image source: Tesla Motors.

If the Model S succeeds in Australia, it will mark the first time electric cars have gained any traction. Hutchinson cites data from VFACTS that shows just 153 electric vehicles delivered between 2011 and 2013. Tesla's Model S and the proliferation of Superchargers haven't yet failed to attract new buyers in any other market the company has entered.

The move to Australia comes appropriately after Tesla introduced its first right-hand-drive vehicles in the United Kingdom last month. 

Where is Tesla headed next?
So far, Tesla is officially delivering cars in the following countries: 

  • U.S.
  • Canada
  • Belgium
  • Denmark
  • Germany
  • France
  • U.K.
  • Italy
  • Netherlands
  • Norway
  • Austria
  • Switzerland
  • Sweden
  • China

Next on the list is likely right-hand-drive markets Japan and Hong Kong, where Tesla has said it plans to begin deliveries late this summer.

Supply is about to ramp up
But despite the rapid international expansion, demand likely will not be a factor influencing deliveries this year. Tesla is limited by supply. The fact that it took Tesla two extra years after the initial launch of the Model S to finally make it to Australia shows just how constrained supply is.

Tesla Production

Tesla Fremont factory. Image source: Tesla Motors.

Also, consider that Tesla CEO Elon Musk explained in the annual shareholder meeting that there was no reason for it to renew its contract with Toyota and continue to supply parts for its electric vehicles since that would simply further constrain Model S deliveries. Demand is clearly not a concern for the company.

But Tesla has emphasized that bottlenecks would improve in the second half of the year. "Battery cell supply will continue to constrain our production in the first half of the year, but will improve significantly in the second half of 2014," the company said in its fourth quarter 2013 letter to shareholders.

Indeed, Tesla is projecting significantly higher deliveries in the second half of 2014. Tesla expects to deliver 7,500 vehicles this quarter, adding up to about 15,000 vehicles for the first half of 2014. That leaves 20,000 deliveries for the second half of 2014 in order for the company to hit full year guidance. Tesla expects to wrap up the year with a production rate of about 50,000 vehicles per year.

If Tesla's optimism about its international expansion holds true, investors should buckle up. Even though the Model S was the top-selling vehicle in North America among comparably priced cars, Tesla says that potential in Europe and Asia "is even more significant."

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Daniel Sparks owns shares of Tesla Motors. The Motley Fool recommends Tesla Motors. The Motley Fool owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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