Tesla’s been running into some trouble lately. The luxury electric car company is struggling against statewide bans on manufacturers selling their vehicles directly — bans that might make it impossible for its cars to be sold in several states.
Despite the setbacks, however, Tesla is continuing to grab market share from other auto manufacturers — including Toyota, whose Prius has long been the most popular vehicle in the hybrid and electric market.
What’s the secret to Tesla’s success, especially among the extremely wealthy? Polk Automotive analyst Tom Libby suggests a Tesla car presents a luxury option for consumers looking for a hybrid or electric vehicle that can still function as a status symbol. Other hybrids and electrics on the market, like the Prius, the Nissan Leaf, and so on, aren’t exciting and sexy enough to compete with a Tesla. (Which, by the way, start at $70,000 at the low end.)
Bernstein Research analyst Max Warburton had this to say to Forbes:
“The genius of Tesla has been to position its product at the high end of the market – this has been more instrumental to its success than cost or technology.
Tesla is selling cars to emotional buyers who are comparing the Tesla S to other emotional, irrational and expensive products – such as the Mercedes S class and Maserati. That’s the genius of the product – consumers are not doing any cost/benefit calculations – but rather just saying “I want one”.”
As it becomes cheaper to make hybrid and electric vehicles that have the range and charging abilities to meet consumer needs, will Tesla’s popularity continue to climb? Or will legal restrictions continue to hold it back until its outpaced by comparable vehicles made by competing manufacturers? We’ll have to wait and see. In the meantime: Elon Musk, if you’re reading this, please let us test drive a Tesla.