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Monday, May 20, 2013

Audi gets defensive about Tesla sales

It seems Audi have taken exception to reports last week of it having been out sold by an EV upstart and have sent out a press release to put Tesla back in their place.

If a defensive press release is the best Audi can do then perhaps we won't be seeing an Audi Model S rival any time soon. Judging by the quote in the final paragraph it would seem Audi are making it clear they are still EV sceptics.

Not so fast

Investors, press and a lot of front-runners are enthusing over the progress of Tesla in selling all-electric vehicles, and doing so profitably, when other EV brands are faltering. But some reports are giving Tesla too much credit.

A headline on this week, for instance, said "Tesla sales beating Mercedes, BMW and Audi."

But the fact is that Tesla's reported sales of 4,750 units of its Model S electric car in April were less than half of Audi of America sales of 13,157 vehicles in the month, which represented a 16-percent rise from a year earlier. BMW and Mercedes-Benz sold even more than that.

The story's misleading headline came from the fact that Model S did outsell at least one of each of the German luxury brands' models that are in the general price range of the Tesla vehicle. Audi A8 sold 1,462 units in the U.S. in April, for instance.

And while Model S is Tesla's only nameplate at this point, the Audi A8 is the brand's flagship model and is aimed at consumers in the most exclusive segment of the market. The demand for premium models including the Audi A6, A7 and A8 is growing but remains just one segment for Audi.

The story did mention that it wasn't making a "perfect comparison," noting that each of the German brands sells "a full range of cars and SUVs" and that pricing of the Tesla S and the comparison models wasn't apples-to-apples.

To be sure, Tesla has been riding a boom in investor and consumer interest based on its apparent ability crack the code for EV sales with its $70,000-and-up Model S.

But while Tesla founder and CEO Elon Musk has raised Model S sales estimates for 2013 to 21,000 units, the brand faces a number of long-term issues that also were noted this week by American press.

"Tesla has to show it can be consistently profitable with a single product that is priced so high that most buyers can't afford it," as USA Today put it. "There are questions, too, about whether it can keep its order books full, or whether the number of people who crave electric cars is limited."

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