Tesla Motors Inc (TSLA) CEO Elon Musk should have devoted his time and energy to becoming a marketer, because he’s a natural. Instead, he’s focused on electric cars, space travel and solar energy. What a waste.
Musk’s marketing techniques, I believe, are a big reason TSLA stock can fetch such a lofty multiple: His decision to tease out high-tech updates to Tesla vehicles, as well as hype new releases or the most recent sales figures on Twitter Inc (TWTR), generates a lot of media coverage and both investor and customer interest.
And so it is with the latest rumor: That the next update to the Model S, Tesla’s best-selling car, will feature a “bioweapon defense mode.”
While the extravagant feature is bound to draw some attention — this article being a case in point — can it actually boost orders and move the needle for TSLA stock? Let’s take a look.
Tesla Motors: A “Leader in Apocalyptic Defense Scenarios”
According to The Verge, sources close to the matter think Tesla is close to announcing some meaningful updates to the Model S, which will also not coincidentally fetch a higher price.
In what is hopefully the least practical update, Musk is equipping the the Model S with a feature currently in its Model X: the so-called “bioweapon defense mode.” The feature allows users to press a button that will engage some extreme air filtration techniques designed to keep you safe if you’re driving through an area chock-full of harmful pathogens.
Just how effective is the bioweapon defense mode? The filter becomes 800 times better at filtering viruses, 700 times more effective at filtering smog, 500 times better at filtering allergens and 300 times more effective at filtering bacteria.
The Model S will also reportedly now be available with a 100kWh battery option, letting the car go even further on a single charge. The 85kWh Model S can travel between 240 miles and 270 miles on a single charge, depending on the Model S variant you get, according to the EPA. If range is proportional to the kilowatt-hours, a 100kWh vehicle would presumably increase those ranges by 17.6%.
These updates are definitely important to Tesla’s stock price, since the company must justify its rumored decision to increase the the price of the Model S. The Model S 70D currently goes for $75,000, while the P90D starts at $108,000. Both prices are before the $7,500 federal tax credit and any state or local incentives.
Raising the price is important especially since the company’s highly anticipated Model 3, Tesla’s first mass-produced EV, was unveiled in late March to rave reviews and extreme interest. In just days, Musk announced on Twitter that more than 276,000 people reserved one. Reaching that many reservations in such a short amount of time surprised analysts, and TSLA stock rocketed higher.
The early success of the Model 3 raises additional problems for TSLA, not least of which is actually fulfilling the demand in a timely fashion. Musk said the company will actually have to build a new factory in Europe due to the high demand.
Ultimately, the “bioweapon defense mode” is a gimmicky way to attract attention to the new-and-improved Model S, but given the overwhelming response to the Model 3, I wouldn’t be surprised to see some people splurge on the sedan, just in case the end of times is upon us.
As of this writing, John Divine did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.
