Published on October 14th, 2020 | by Remeredzai Joseph Kuhudzai0
Could A Tesla Master Plan “Deluxe Edition” For New Markets Supercharge Model S & X Sales?
October 14th, 2020 by Remeredzai Joseph Kuhudzai
Tesla is pushing to produce 500,000 vehicles this year for the first time ever, buoyed by strong Tesla Model 3 numbers. The new, cheaper “Made in China” Standard Range Plus Model with LFP cells will definitely give this ramp up a huge boost. Aside from the exceptional demand for the Model 3 & the Model Y in markets where these vehicles are available, however, sales of the Model S & X appear to have plateaued?
Does Tesla have the capacity to increase the production of the Model S and X? If so, doing so could present a great opportunity to have a remix of the company’s original Master Plan. The Model X & S could be the modern-day Roadster in new/emerging markets by opening up markets where the Tesla brand and these models could generate sales following the original strategy.
In the original Master Plan, Tesla’s strategy was “to enter at the high end of the market, where customers are prepared to pay a premium.” This could be like in the old days of buying CDs when artists used to have a trick to boost sales of an album and extract more value from an album. Before their current release faded, they would release a “Deluxe version” with a few new songs or some remixes of the hit singles amongst other things like a bonus DVD with videos. Shopping for CDs and LPs was always a fun day out for me growing up.
This deluxe thing got me thinking — could Tesla replay its original master plan in Africa? If production capacity is not an issue for the S and X, perhaps Tesla should really launch a Master Plan Deluxe targeting new markets like South Africa and Kenya. Kenya is one of the top markets that is expected to mint some of the world’s new millionaires in the near future.
With excess electricity generation capacity generated from renewable energy sources such as hydro and geothermal, Kenya is an excellent choice for EVs. With the transport sector contributing close to 40% of CO2 emissions, accelerating the adoption of EVs in Kenya will go a long way in addressing this. The majority of vehicles imported into Kenya have used ICE vehicles from Japan, which is why the majority of EVs now being imported into Kenya are used Nissan LEAFs from Japan. However, Nairobi does have Porsche and Mercedes dealerships for new vehicles, so there should be quite a number of potential Model X & S potential customers.
Speaking of Porsche, they also have dealerships in South Africa, where the Taycan recently went on sale. Porsche sales (including ICE models) generally average more than 100 units per month. With most of the models starting at over $100,000 in South Africa, it shows there are a number of consumers who can easily buy a Model S or X.
African consumers have been said to be “brand conscious and brand loyal.” There is no brand that’s hotter than Tesla right now. I’ve seen it with a lot of people in South Africa that whenever I show them a new EV model that has been launched somewhere, they tell me: “it looks nice, but I am waiting for Tesla to come to South Africa.” Unleashing the Model X & S in new markets could supercharge sales in Tesla-hungry new markets. When all the new factories start full production, Tesla could then also add the cheaper Model 3 versions into those new markets, and of course the upcoming $25,000 Tesla.
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