Tesla Leads Because It Outsmarts the Competition

By · May 15, 2013

Tesla Model S sedan

Tesla Model S sedan.

The Tesla Model S was the best-selling electric car in the first quarter of 2013. At the same time, Tesla Motors was profitable for the first time in its 10 year history. Wow!

These headlines lifted Tesla's stock price to new heights—crazy heights considering the ratio between market capitalization and annual sales. But hard facts don't lie: the Model S outsold the Nissan LEAF, the second best-selling EV in the U.S. by a wide margin. The LEAF remains the best-selling EV at the global level and should remain so, but Model S sales are incredible considering the Tesla sedan is nearly three times as expensive as the LEAF.

The ranks of Model S buyers might be made up of people with more money than brains, but the Model S is also a better car. More than that, the Model S is the first electric vehicle without the limitations that usually encumber EVs. Tesla is outsmarting all competitors because it understands the need to break those limits. That's why the company has been successful.

Convenience Rules

The refrain from early EV advocates has been: the average American drives less than 40 miles per day, so the limited range of an EV isn't really a problem. Have those people visited a shopping mall lately? The stores are full of useless stuff nobody needs, and yet millions are buying them. French philosopher Jean-Jacques Rousseau wrote three centuries ago that the only things a man needs are a bed and to keep warm. But people, especially 21st century Americans, want more than that.

Consumers expect convenience and ease of use. Lengthy charging times are a no-go. And when it comes to EVs, that makes the Tesla Model S the sole option. With a 265-mile E.P.A.-rated range and 90-kW charging from the supercharger network, this is an electric car as easy to use as a gas car. All that comes from the availability of a 85-kWh battery pack. That's the secret.

Tesla Model X SUV

Tesla's upcoming Model X sport utility vehicle.

The strange thing is that nobody's trying to copy Tesla's formula. Nearly all the major carmakers have EV projects, but there's not a single word about one with a battery pack as large as the one in the Model S.

The auto industry folks I've met all seem to be afraid of a large battery cost and weight. They think EV buyers are ready to accept limited range, performance, and long charging times. (It's like power companies that don't want to hear about fast charging because it might impact the grid.) The saddest thing for the future of the EV industry is that Tesla Motors is the only "you can" company. while all the others are stuck in a "you can't" mentaility.

People my generation think a 25-inch television is nice, but young people today think you're hopeless if you don't have at least a 36-inch screen. Fifty-inch is better.

There will be a day when EVs with less than 100 miles of range will be seen as inferior, if not entirely unacceptable. That day may not be far away. In the meantime, a car like the Nissan LEAF makes for very decent daily transportation. It's correct to say that it's a good match for most drivers' needs, but if the electric car is to become mainstream, it will have to get much closer to the convenience of a gas car. Tesla is proving that buyers are ready to pay substantial money for it.

New to EVs? Start here

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