What Comes First - TSLA Or Tesla?
My interest in Tesla (TSLA) stock was significantly boosted when I read this thread on the Tesla forums several years ago with people selling off Ferraris, Porsches, Jaguars and other luxury cars once they test drove and owned a Tesla. Before that I only had a very small investment I made in Tesla in 2011 prior to the Model S launch. Now Tesla stands as my wife's and my largest individual stock holding.
A few weeks ago, Barrons reported research from Jefferies that Tesla owners show exceptional brand loyalty. Many will not consider any other car brand and most will buy another Tesla.
A recent poll at the Tesla Motor Club forum asked members to state if they own a Tesla and how much stock they own. The results are here. Using the data on which that chart is based, the average number of Tesla shares owned by Tesla owners is 3800, while average shares owned by non-owners is 1400.
Also, completely non-scientific observations show that Tesla ownership is not just from prior luxury car owners. Test driving a Tesla has made owners out of people who have never bought a new car, people who owned old econoboxes and all kinds of folks who would otherwise have never bought a luxury vehicle.
Some quotes:
"My roadster replaced a 1994 Jeep Grand Cherokee with 150k+ miles and broken everything which I sold to a friend for 800 dollars and it promptly blew up a few weeks later."
"My 85D replaced a 98 [Toyota] (TM) Camry that i only paid 1k for. The S cost more than 100x as much as my last car."
"prior to buying a Tesla I owned a 2002 Honda (HMC) Civic (bought used in 2006) and a 1971 Datsun 240Z (bought used in 1977). I now own a 2013 Model S and a 2015 Model S, both bought new."
I'm going to be one of the first in line for a Model 3. At this point, it is pretty much a certainty that there will be a mad dash for pre-orders for the Model 3 as soon as it opens and based on the Model S owners, who came from everything from beaters to Ferrari's, the Model 3 should appeal to nearly everyone.
What is it about Tesla that makes people crave it so much? I was recently reminded about an article I wrote almost two years ago when Carnegie Mellon requested permission to distribute it to some executive MBA students. It talked about innovation in the auto industry and why Tesla is a disruptor.
And what was true two years ago is still true now. There is always talk of "upcoming" competition for Tesla. However, that has yet to materialize and the only other long-range EV in sight is GM-s (GM) Chevy Bolt, which is not really a Tesla competitor, unless you also think the Chevy Sonic competes with the BMW 3 series.
If it wasn't for Tesla announcing "autopilot", we wouldn't have had every other automaker come out of the woodwork with their own "autopilot". Maybe the Bolt will hit the market before the Model 3. Maybe someone else will have autopilot before Tesla. But nobody else currently has the allure of Tesla or the perception of being a bleeding edge automaker.
There were always phones with better specifications than the Apple (AAPL) iPhone at every point in Apple's history and Apple was often late to add features like 3G, LTE, NFC, but checking a specification box is not as important as the overall perception of a product. And as far as cars go, Tesla is second to none for both customers and media. Here is a list of awards that Tesla has won and the Model S is second to none in achievements.
So what comes first? Tesla or TSLA? It doesn't matter. One leads to the other and such kind of brand loyalty is a strong indicator that it is here to stay. After all, if some other company held on to people's money for years on end for a delayed product like the Model X, the people would be screaming bloody murder. But the perception is that it is worth the wait. And that's all that matters. Be prepared for more Tesla -> TSLA converts as the Model X hits the road later this year. And even more TSLA -> Tesla converts when the Model 3 preorders start. This "vicious" cycle is likely to keep Tesla stock going for a while.
I would use the current dip from Greece/China problems as a buying opportunity.
Long TSLA
Hi, what do you mean by it's your wife? It's your ride (you own it)? Sure hope you're not implying you own your wife or my wife will make me stop reading this site! I don't understand the lingo, and searching isn't helping me....
I'd trade my wife for a new Model 3!
Nope I don't own a Tesla. But it is the largest individual stock holding taking all my wife and my holdings combined
Great article! Everyone who owns one seems to love it and I'm sure they will continue to buy from Tesla in the future. Really expecting them to take over the market in the future once they begin mass production and driving costs down.
You've highlighted a fascinating correlation I hadn't put much thought into until now. This most certainly gives $TSLA an edge over other automobile manufacturers. I'm curious what other companies benefit from similar correlations. I would say Apple most definitely.
There must be other companies that benefit from this besides Apple and Tesla. Amazon and Netflix come to mind. Though loyalty can be fickle. I'm sure you remember how Netflix users rebelled when the company wanted to increase prices and spin off its dvd business.
I'm not a big fan of the way Netflix runs the user facing side of the business but I live with it as my only option for DVD rental. But yes it does qualify as a disruptor that customers seem to love.
How about Harley Davidson ($HOG)?
Kurt, in the recent past only Apple, I guess.
Great article and thanks for the link to the forum. My favorite line was "I have finally found something bad to say about it: owning the Model S has made me dislike my Ferrari and every other car I once loved."
Thanks!
I've never driven a Tesla... now I'm tempted to.
I've heard there is a waiting list to get a Tesla and they don't come cheap.
Not much of a waiting list in the US. Elsewhere, yes. Good things in life are either free or expensive. There is no such thing as cheap and good :)
The best things in life are even free. If you just look for the most exspensive things, you will think its the only alternative.
You really should. I sat it in it and it felt like a car designed for me. I sat in a loaded Mercedes E Class and it was a car designed for old people. The great acceleration, silent smooth operation, the fantastic display where the bluetooth and maps work intuitively.
Is there really such a difference? I read the forum you linked to and while I've never owned a $250k car, I can't see how they could be so inferior to a Tesla.
Dan, you need to drive one. There really is a difference. Some people complain that the Tesla is not luxurious enough. But that really doesn't matter to me personally.
One of the nice, but understated, things about the Model S is its practicality. It takes off of the line like a Ferrari, packs like a Tahoe, has the seating capacity of a Odyssey, and the efficiency of a Prius. I no longer need separate cars for hauling the kids around and commuting.