Airfare for 600 mile trip: Approx. $370
Looking at the numbers above, the Model S is more than competitive for a roadtrip of 300 miles each way. With this distance it would require only one Supercharger stop, and most drivers would probably want time to stretch their legs anyway considering that even at highway speeds the trip would take around four to five hours each way.
Sales
So the question is what do these numbers mean for sales? In the case of Ford Motor Company (NYSE:F) it’s fairly simple at this point. With a starting price only a fraction of the Model S, there is hardly anyone in the car market trying to decide between a Ford Motor Company (NYSE:F) Focus and a Tesla Model S. Therefore, Tesla’s Model S does not represent a threat to Ford Motor Company (NYSE:F), and even the Tesla Gen III sedan would come in at the higher end of Ford Motor Company (NYSE:F)’s price range. The Detroit automaker’s bigger concerns have to be competition in the mass market car and truck markets. Trucks and SUVs tend to be used in the construction industry, and the housing recovery could cause higher demand for these vehicles. Ford can also look toward emerging markets where a growing middle class sees the automobile as the symbol of climbing the social ladder. If Ford can continue to build sales in developing markets, these faster growing and highly populous countries could provide a boost to Ford’s total sales over the next several years.
PORSCHE AUTO ADR (OTCMKTS:POAHY) is more threatened by Tesla than Ford. but it still has many times the capacity of Tesla and a more diverse model line. The Model S is competing with the Panamera but soon the Model X will compete with the Cayenne, a model that significantly outsells the Panamera. Fortunately for PORSCHE AUTO ADR (OTCMKTS:POAHY), the automotive market is not a zero-sum game. As seen by the way Ford can target developing markets, this and a recovering economy are set to expand global automotive demand over the next several years. Even if Tesla can take a bite out of PORSCHE AUTO ADR (OTCMKTS:POAHY)’s market share (and it won’t all come from PORSCHE AUTO ADR (OTCMKTS:POAHY); some will come from other luxury automakers as well), there will always be Porsche fans, the gasoline car isn’t dead, and an expanding auto market means a lower future market share does not necessarily equate to a decline in total sales.
Tesla’s sales
Of course the numbers listed above make the Model S all that more attractive. Many of the people who would buy one may never take it on a roadtrip of this length but they want the freedom to know they could do so if they wanted to. Instead, many Model S owners may fly or even take their Porsche for long distance travel. After all, Tesla does not need to conquer all forms of transportation; it only needs to carve out enough to deliver on its goals.
Alexander MacLennan owns shares of Tesla Motors. This article is not an endorsement to buy or sell any security and does not constitute professional investment advice. Always do your own due diligence before buying or selling any security. The Motley Fool recommends Ford and Tesla Motors . The Motley Fool owns shares of Ford and Tesla Motors. Alexander is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article Of the Many Ways to Travel, This Is One of the Cheapest originally appeared on Fool.com is written by Alexander MacLennan.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
