BMW
In perspective, 500,000 units would represent about 36% of BMW’s global sales. If we compare model for model, in 2012, BMW sold 406.752 3 Series (future non-electric competitor to the GEN III), 149,853 X3 (future non-electric competitor to the Model X) and 337,929 5 Series (non-electric competitor to the Model S).
BMW is the leader of the mid-luxury and luxury car market with a market cap of 61 billion. It currently trades at a P/E of 9.4, which is cheap compared to Tesla’s forward P/E of 133, but Tesla Motors Inc (NASDAQ:TSLA) is in a great position to steal some of BMW’s market share and continue its phenomenal growth.
Of course, BMW and Tesla are two completely different car companies, but it can give us an idea of the market for each current and future models that Tesla intends to offer under a broader adoption of electric vehicles.
Range Anxiety is not a real problem anymore
The range anxiety problem that slows Tesla Motors Inc (NASDAQ:TSLA)’s incursion into a broader market will disappear as people realize the true potential of a 200 mile range.
If we take a look at this chart from the survey: How People Use Their Vehicles: Statistics from the 2009 National Household Travel Survey, we can see that the number of vehicles traveling more than 200 miles a day is trivial. This makes the Tesla Model S a valuable option range-wise for a large majority. According to those statistics, even the General Motors Company (NYSE:GM) Volt or the Nissan Motor Co., Ltd. (ADR) (OTCMKTS:NSANY) Leaf would be a good fit for about 85% of the vehicles registered in this survey.
Those numbers have been stable for years and will likely stay that way for years to come, since the planes, trains, and buses will presumably continue to dominate the market for longer trips.
In Conclusion
For the time being, nothing indicates that Tesla will face decent full electric competition in the near future. General Motors Company (NYSE:GM)’s Volt and Nissan Motor Co., Ltd. (ADR) (OTCMKTS:NSANY)’s LEAF are no match to the Model S according to pretty much every car reviewer out there. I am aware that the Volt and LEAF are not luxury cars, but when talking about fully electric vehicles we are quite limited in comparison material. Between the Model S, Model X, and the GEN III, I believe that Tesla Motors Inc (NASDAQ:TSLA) will achieve the threshold of 500,000 cars a year in a reasonable timeframe and capture about 9% of the global luxury (S and X) and mid-luxury (GEN III) car market.
Frédéric Lambert owns shares of Tesla Motors . The Motley Fool recommends Goldman Sachs Group, Inc. (NYSE:GS) and Tesla Motors . The Motley Fool owns shares of Tesla Motors Inc (NASDAQ:TSLA).
The article Can Tesla Sell 500,000 Cars Per Year? originally appeared on Fool.com.
Frédéric is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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