Last Friday, just outside Tesla Motors' (NASDAQ:TSLA) Fremont, California, factory, I pulled up to a stop sign on a lonely street in Tesla's new flagship vehicle, the 85 kWh battery-powered dual-motor performance model (or P85D). Making sure the runway -- I mean, road -- was clear, I kicked the accelerator pedal to the floor. About three seconds later, my idea of "fast" was completely redefined. I attest: The acceleration mode, "Insane," was appropriately named.
Tesla's P85D has changed the game. Combining the vehicle's acceleration that put Tesla on par with supercars at far higher price points, versatile driving achieved with an all-wheel-drive dual-motor system, top-notch aerodynamics, and a low center of gravity, and the utility of 5+2 seating and cargo space that rivals that of crossover SUVs, Tesla is making a clear statement: Electric cars can do more than hold their own compared with gas-powered cars; they can outdo them. And best of all for Tesla, the company seems to be selling loads of these six-figure-priced cars.
Dual-motor production galore
After a P85D test-drive last Friday, I toured Tesla's California factory, where it makes all of its vehicles. While there were a number of takeaways, which I'll touch on in coming articles, perhaps the most notable observation was the strikingly high percentage of cars in production that were dual-motor.
Nearly every vehicle on Tesla's final assembly line had a front and rear motor. When I asked the tour guide if this could be the result of running batches of certain motor configurations on the assembly line, the guide insisted that this wasn't the case. Tesla's final assembly line is shared by every version of the Model S the company makes, and in no particular order. In fact, the final assembly line is so versatile that a glance at the line later this year would even include a mix of both Tesla's Model S and its upcoming Model X, a fully electric SUV.
To be clear, it looked as if about 19 of every 20 vehicles I saw on the line were dual-motor. Of course, the sample size before me was far too small to make a clear estimate of what percentage of new orders are dual-motor, but it was enough to confirm that there is significant demand for the October-announced dual-motor system.
It's not news, however, that there is high demand for dual-motor versions of the Model S: Tesla CEO Elon Musk shared some tidbits on the early demand trajectory for the car in a GQ magazine interview in November, one month after the dual-motor vehicle went on sale and about a week before the first deliveries.
"Demand for the P85D is off the charts," Musk said. "We're seeing a very high proportion of orders for all-wheel drive, either P85D or 85D (which has smaller, equal sized electric motors front and rear), so 70% plus of our cars will be dual motor. With deliveries of the X due to start next summer, the biggest problem we have at Tesla now is meeting production demands."
When Musk takes the stage today at the Automotive News World Congress in Detroit, an update on dual-motor demand will be one of the three main items I'm hoping he will discuss.
Despite a very small retail and service footprint and zero advertising spend, demand for Tesla's vehicles continues to outpace supply. While it would seem that the introduction of a dual-motor system could widen this gap, Tesla's well-timed fast ramp-up in production should help. After closing its factory for two weeks during Q3, Tesla guided for Q4 deliveries to be 44% higher than in any quarter yet.
But I expect demand for Tesla's spiced-up Model S lineup to continue to outpace production for some time. That 691-horsepower, 3.2-second zero-to-60 beast does more than suck you into the seat when you hit the pedal; it opens wallets, too. Tesla's other models, of course, are also plenty fast.
With the dual-motor helping accelerate demand, Tesla expects Model S sales of around 50,000 in 2015, up from 33,000 in 2014 if Tesla hit its guidance in Q4.