Electric cars are all the rage currently and in many ways its also the holy grail of Detroit and thus plays a disproportionately large role in the US politics. To get an idea of how big a role cars alone play, the federal program paid individual car owners up to $4,500 to replace their current vehicles with new ones that get higher-mileage. Whether this was just an indirect subsidy to Detroit or a real environmentally responsible policy is another discussion.
If the electric car is a hot topic in US, it could be even bigger globally if someone gets the economics right and makes a pure electric vehicle a real alternative to the combustion engine.
During our trip we visited the most talked about contender that has been claimed to be the future of car industry, Tesla Motors. I talked to Rachel Konrad, Senior Communications Manager at Tesla, in length about the car itself, the future of the industry and most interestingly is Tesla’s business model really working and making real profits for its visionary founders and investors.
I also asked about when Tesla is coming to the Nordic and Baltic countries and heard that they are already here. For example, last year people in Denmark bought a total of 92 new two-seat sports cars in the price range of a Tesla Roadster. Tesla sold 10 Roadsters in the same period in Denmark – This makes a rough sports car market share of 10 percent! Even thought the market for sports cars is tiny in this part of the world, I believe 10 percent market share is indicative and it might get really interesting when Tesla shifts more of weight to Europe and rolls out the Model S with up to 480 kilometer range.
An interesting and significant part of Tesla’s business model, which is many times over looked, is how Tesla runs its dealerships. Instead of being set up like most car dealerships as franchise, they keep tight control of the dealerships and run them themselves to guarantee the best possible brand experience and make sure the customer satisfaction is high. Tesla has modeled the stores on the much hyped Apple Stores. Equally interesting is to notice that where roughly more than 50% of the revenues for a normal car dealership comes from repair and maintenance, none of this applies to Tesla. It’s not that often you need to change the oils for a pure electric vehicle. This many times over looked detail consequentially changes the economics of the electric vehicle business radically. See the below video for more.