Tesla Motors TSLA has the momentum and charging infrastructure to be the dominant electric vehicle firm, but we do not see it having mass-market volume for at least another decade.
Tesla's product plans for now do not mean an electric vehicle for every consumer who wants one, because the price points are too high. We think the Model X crossover due in 2015 will start somewhere between US$55,000 and US$70,000, but will average higher as consumers add options. The Model 3 sedan will start at about US$35,000, according to an interview with CEO Elon Musk earlier this year, and will start selling in 2017 or 2018. This price is before any tax credits, but the US$7,500 U.S. federal tax credit only applies to the first 200,000 vehicles Tesla produces starting Jan. 1, 2010.
Tesla has said that when its gigafactory -- a lithium-ion battery plant under construction in Nevada -- is fully operational by 2020, it will be able to produce 500,000 vehicles a year at its sole assembly plant in Fremont, California. Without the gigafactory, Musk said that the firm can make 200,000 vehicles "if you really push it." Even if demand exists for these vehicles, this quantity is quite small relative to total global auto production, which is likely to reach 100 million units in the next few years. Therefore, we think global mass adoption of pure electric vehicles is still a long way off.
