If you want to follow car trends, then follow Tesla (NASDAQ: TSLA).
Why? Because the company is a trailblazer in terms of selling directly to its customers, and it has been the first to put electric cars on the map as a real competitive alternative to conventional cars.
And Tesla is also one of the few EV automakers not sweating bullets to boost sales goals.
GM (NYSE: GM) announced yesterday it will cut the cost of its 2014 Chevy Volt by $5,000. Simply put, this is an act of desperation.
The primary price of the Chevy Volt will be reduced from $40,000 to $35,000. When factoring in tax credits from the government, you’re looking at $27,495 as the ultimate price.
While other EV makers like Honda (NYSE: HMC) and Nissan (OTC: NSANY) are offering price cuts to their EVs as well, Tesla has made little to no price change to its Model S, while still doing well in sales.
Sales have been all-around flat for EVs, but Tesla has been able to pull out a win by exceeding its weekly production goal of 400 Model S cars from the last quarter. And Tesla is on its way to delivering 21,000 Model S cars internationally, a leap from the company’s original goal of 20,000.
Tesla went from having a market value of $17 in 2010 to $142 currently.
The company posted losses in the second quarter, but what some have jumped on with criticism, the company attributed to expansion. It’s moving overseas to Europe, and the company recently began a leasing model.
Tesla has the market advantage because it is selling quality EVs while still retaining higher-end prices.
The car is one of those products where consumers are more willing to make a pricier purchase in the name of securing a longer term investment.
The Model S has won praise from critics, receiving a rare 99 out of 100 from Consumer Reports and the 2013 Car of the Year from Motor Trend.
I don’t care what stock or product a company is selling; it has a high chance of doing well as long as that product is popular with consumers and has the attention of investors.
Quite simply, Tesla has manufactured a better car, which is why the Model S has beaten the Chevy Volt in the sales arena.
Model S vs. Chevy Volt
The Model S has plenty over the Chevy Volt, but in all honesty, the Model S simply looks better than GM’s hybrid.
The Model S will do a better job of convincing consumers who are looking for a flashier vehicle, and it is also an extra incentive for consumers to become more interested in EVs. Tesla has proven that EVs can look sexy and can compete with gasoline-based cars in appearance.
Many consumers are turned off by the compact and less-conventional appearance of many EVs on the market, not to mention the short driving ranges.
But Tesla challenged those assumptions by coming up with a stellar-looking vehicle with enough road elasticity to satisfy some of the most hardened skeptics of alternative-powered vehicles.
The Chevy Volt appeals to people who are not quite sold on EVs and would prefer gasoline as a back-up fuel source.
Tesla is more of a revolutionary feat, fit for the consumer that wishes to have more flair in his transportation while driving a different sort of vehicle.
What also makes Tesla a notch above its hybrid and electric counterparts is the luxury combined with a reasonable price tag. It is the first luxury electric vehicle of its kind that is reachable to more people.
You can get in a Model S for $579 monthly with no down payment. With the Volt, you can get a $269 monthly plan, but only with $2,399 due at signing.
A basic Model S will run for $62,400.
The Chevy Volt may defeat Tesla when it comes to the price factor, but Tesla still wins hands down, and here’s why.
The Chevy Volt can only drive 40 miles on its electric charge before its gasoline tank kicks in, but the fully electric Model S engine can go for up to 300 miles on a full charge. GM’s hybrid has a total driving range of 380 miles with gasoline – not too much higher than the Model S has without.
And while GM lowered its Chevy Volt price by $5,000, you must also factor in gasoline expenses. A Tesla vehicle may seem like an expensive purchase in the short-term, but consumers will not have to spend one dime on gasoline.
If speed is your thing, then the Tesla also has the Chevy Volt pegged for defeat. If you want the Model S 85 kWh Signature Performance version, it packs a punch of 416 hp and 443 lb-ft. The Chevy Volt only has 149 hp and 273 lb-ft.
Even the basic version of the Model S has 362 hp and 325 lb-ft.
Tesla is in the unique position of being in league with the likes of Jaguar and Mercedes, but it still has a foothold in the future of the automobile market. According to predictions by Edmunds.com, electric cars will make up .1 percent of American auto market this year, 1.1 percent by 2017, and 2.3 percent in 2020.
Tesla could very well be the leading company that ushers in the electric car as a mainstream competitive force in the future.
Tesla vs. GM
Let’s take a step back from the cars and examine the companies face to face. Auto companies like GM and Ford (NYSE: F) made horrible business decisions by sacrificing car quality to save a few dollars, which is why foreign car makers like Honda and Toyota (NYSE: TM) have seamlessly entered the American market.
American auto companies have tried to combat this image of their cars being inferior to Japanese or German cars, but whether it’s correct or incorrect, that perception still persists in the minds of many consumers.
Tesla came along and challenged that notion – proving that American automakers can instill quality in their vehicles.
The heart and soul of the Model S is the battery, something CEO Elon Musk has gone to great lengths to assure is safe and long-lasting. Musk was not only able to convince consumers who are leery of EVs but also brought them back into the American consumer fold by proving that American automakers can compete with the Germans and the Japanese.
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