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Tesla’s Competitive Advantage Under A Magnifying Glass — The Netherlands

It’s easy to ignore Tesla’s Dutch sales success as just a temporary fluke created by an incentive change. And it is, but that is not the interesting thing about it.

It’s easy to ignore Tesla’s Dutch sales success as just a temporary fluke created by an incentive change. And it is, but that is not the interesting thing about it.

What’s interesting is how the other cars that are subject to the same change react, and how different that is from how Tesla’s vehicles react. It illustrates the competitive advantage of Tesla under a magnifying glass.

Dutch electric vehicle sales in the first 9 days of December:

Perhaps over 90% of these cars are company cars made available for private use as a “Benefit in Kind” to employees. With this kind of company-provided vehicle, the employees have a large amount of freedom to choose the car they like the best within a budget allocated to them. The incentive for electric vehicles is that they provide a lower addition to the person’s taxable income compared to gas burners. This incentive will be smaller next year, which will make the upfront cost competition with fossil fuel addicts more difficult.

Another challenge in 2020 is the start of new Corporate Average Fuel Economy (CAFE) regulations. Carmakers will be fined for every gram they exceed the 95 grams of CO2/km limit. They are all well above that line at the moment. The best way to lower the average is to sell more zero-emissions vehicles. Over a dozen new fully electric models will go onto the market as a result. These December sales, however, will be a lot harder to match in the new year.

All of these models are fighting for customers on equal terms. All can get the same incentives. All are subject to the same regulations. Some have large dealer networks, some have fewer sales locations. That is the biggest difference. As we can see, though, the one with the least sales locations sells the most. That is not logical.

There is no home turf advantage for any of them, like the Detroit Dwindling Three have in the USA or French and German carmakers have in their home countries. This is a pure beauty pageant comparing the cars and dealer networks on equal terms. With the whole industry trying to deliver as much as possible before the deadline, we have a unique opportunity to compare their popularity.

I can only speculate about why Tesla is winning so many more sales than the competition. According to José Pontes in his recent report on November sales in the Netherlands, there are a number of reasons. Some carmakers, like Volkswagen Group, are just not that interested in a few dozen extra sales. Others were late in realizing what was happening, like Renault and Nissan, or were just starting production of a refreshed model, also Renault and Nissan.

But this is not the real explanation I am looking for. Why is Tesla delivering about 10 times as many as the next guy?

Okay, it is a better product at a better price for many people. But is that it? (Personally, I am waiting for my Renault ZOE in two weeks.) The Tesla Model 3 is getting nearly three times as many sales as the rest combined, while almost everyone is pushing to get as many cars out the door as possible in this end-of-year rush. That is a big difference. Is it just the cool factor? All the hype, Twitter wars, fanboys, and media attention? Is it something else?

Perhaps only the Ford Model T has been this dominant.

Please share your experience.

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Written By

Grumpy old man. The best thing I did with my life was raising two kids. Only finished primary education, but when you don’t go to school, you have lots of time to read. I switched from accounting to software development and ended my career as system integrator and architect. My 2007 boss got two electric Lotus Elise cars to show policymakers the future direction of energy and transportation. And I have been looking to replace my diesel cars with electric vehicles ever since. At the end of 2019 I succeeded, I replaced my Twingo diesel for a Zoe fully electric. And putting my money where my mouth is, I have bought Tesla shares. Intend to keep them until I can trade them for a Tesla car. I added some Fastned, because driving without charging is no fun.


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