Tesla Motors (TSLA) continues to go strong, with TSLA stock up about 70% year-to-date in 2014.
And according to reports, Tesla is set to unveil its low-end electric vehicle later this week. The Tesla Model 3 is a mass-market vehicle that should sell for a lower price point and get more folks on board the TSLA bandwagon; at the same time, Telsa CEO Elon Musk also plans to unveil a new design for its flagship Model S sedan.
TSLA stock has also gotten a lift recently from a viral campaign from Musk for Tesla D — a vague title for a product that nobody knows anything about. The folks over at auto site Jalopnik posit the term could be for a kind of all-wheel-drive technology … but honestly, we’re all guessing until the Thursday, Oct. 9, Tesla event.
But interesting enough the biggest news TSLA stock holders should be aware about isn’t the looming event with Elon Musk, but a recent auto sales report that shows an unlikely competitor to Tesla taking hold.
That would be none other than Nissan (NSANY).
TSLA Stock vs. Nissan Leaf
General Motors (GM) is often seen as the biggest competitor to the Tesla Model S sedan with its Chevrolet Volt, which debuted way back in 2010. However the Volt has been lagging with consumers, and sales continue to slip.
But when you look at the numbers, the Nissan Leaf remains the premier electric vehicle in the U.S. by sales volume. Specifically, while the Tesla Model S only sold 1,650 units in September, Nissan sold 2,881 Leafs (Leaves?) in the same period.
Now, it would be easy to simply pooh-pooh the Leaf as a low-cost alternative to Tesla, since the car sells for about $25,000 to $30,000 vs. the $75,000 or so it takes to buy a Model S. And sure, part of the reason that TSLA stock is rallying is because of new products in the works that include the Model 3 sedan and the Model X Tesla SUV.
However, The Chevy Volt is only $30,000 to $35,000 and hasn’t caught on as much as the Leaf — so there is clearly something else going on.
TSLA stock investors have long thought that a low-end version of the Model S would be a sure thing. However, it has always been clear that the high-priced Tesla sedans have been as much luxury vehicle as gas-free transportation.
So will the Tesla brand translate downmarket so easily? And even if TSLA stock investors see the Model 3 hit the market in a year or so — a very tall order given production constraints and the upcoming Model X launch — can they count on consumers to switch from what appears to be a pretty good experience with the Leaf?
Now, Tesla surely isn’t going bankrupt anytime soon. The Model S sedans are high-margin and have a huge backlog, and if the Model X launch is well-received then there will be plenty of additional revenue for this dynamic carmaker.
However, the long-term hopes of Elon Musk have always been to replace combustion engines with electric vehicle technology — with Tesla dominating both the high-end and on the low-end of the market.
It appears Nissan may agree with the vision of an electric vehicle future … but disagrees with letting TSLA stock have all the fun.
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP.
