For those with a need to blow away their neighbor’s hybrid, Edmunds is reporting that Porsche is creating a hybrid 918 Spyder that can do zero to sixty miles per hour in under three seconds. At $845,000, even a Model S Performance looks cheap by comparison. As much as I am a fan of the Model S, it is pretty clear this Spyder would dominate the Model S in everything performance. But Tesla isn’t giving up the supercar realm. The automaker plans to bring back a new version of the Tesla Roadster around the same time as it releases the Gen III sedan. More excitingly, Tesla CEO Elon Musk has indicated his intention to bring a supercar to market that can compete with Ferraris and Lamborghinis.
So should Volkswagen feel threatened by Tesla going after Porsche vehicles? Probably not, at least for now. Porsche is only one division of the Volkswagen Group which now includes Volkswagen itself, as well as Porsche, Audi, Bentley, Bugatti, and Lamborghini. Despite the prestige behind the names of Volkswagen’s luxury brands, the majority of Volkswagen Group’s sales come from the lower price segments where volume is key. If anything, Volkswagen Group is growing and hoping to become the world’s largest automaker within the next several years, a trend that should increase earnings as sales grow and greater economies of scale are realized.
With respect to BMW, the BMW 5 Series Luxury/ Sports sedan is a frequent comparison to the Tesla Model S. While 5 Series sedans are sold in numbers that exceed Tesla’s current production capacity, the start-up automaker may have already picked off some 5 Series buyers with its electric Model S.
But Musk is labeling the BMW 3 Series as the target for the Tesla Gen III sedan. While there are many other capable cars in the $30,000 range, the 3 Series is the target for the competitors that seek to unseat the king. But none of these currently offered cars are electric. By introducing the Gen III sedan, Tesla is looking to shake up the $30-$40,000 sports sedan segment and targeting the 3 Series is the best way to start. But without any performance figures on the Gen III sedan, we will just have to wait to see how it stacks up against the 3 Series.
It is difficult to predict a value for a Tesla Motors that has become a major competitor in the luxury segment by looking at the market capitalizations of Daimler, Volkswagen, and BMW. In the case of Daimler, Mercedes-Benz is only part of the larger company so it is tough to get a feel for what value the market would assign to an independent Mercedes-Benz. Volkswagen’s Porsche may provide better insight since a small fraction of Porsche shares are not owned by Volkswagen and are still publicly traded. At the close of trading on Apr. 8, 2013, Porsche was valued at roughly US$11.3 billion (8.67 billion euros). Based on the current 114.5 million shares outstanding, a market cap of Porsche’s size would give Tesla a share price of nearly $100 per share. However, along the way share dilution will be likely and given a ten percent increase in shares outstanding, a Tesla with Porsche’s market cap would still be worth about $90 per share. But Tesla will want to grow to be more than Porsche and plans to move in on BMW’s territory.
