Tesla Allows Potential Customers To Swap Vehicles For Week Long Test Drive

Hmmm. Wonder why Mercedes, BMW, Porsche, and others aren't doing this? Oh! Because they don't *have* to! People don't need any convincing to buy it.

That's an oversimplification. Each of those brands is over half a century old. And you're trying to convince people to go from their petrol cars to an EV with the whole range issue a big question mark for some. Added to that, trying to appeal to customers who are set in their ways. If BMW or Mercedes were the young upstarts people wouldn't be convinced of anything for quite some time.

@TheSteve What would I pick? A loaded Tesla S or a not-so loaded S Class? Mercedes hands down. :)

PS my new company car is a Lincoln Continental B-L-A-C-K

But Mercedes, BMW, etc., do collectively spend billions on advertising, while Tesla spends $0. Think of this as their creative way of doing marketing. It's a good idea and is more likely to convince a potential buyer than a billboard or magazine ad.

Read the whole article folks. It's not that simple to get a free ride. First you need to live somewhere in Europe ...

Speaking of extended test drives, yes I had done it before with Porsche and Jaguar. I ended up buying each time so it's not a bad marketing ploy.

Interesting...maybe under Euro Zone accounting rules, Tesla can count that as a sale if the customer uses if for more than 24 hours. Maybe once the sale is booked, as the prospect drives away, if they return the car, Tesla can just reverse the sale later? Can someone provide an accounting opinion on this?

My guess is they're already considered "sold" to the company. Kind of like here in the States where dealer loaners are purchased by the dealership itself, titled and then considered a used car when finally sold to a customer.

You have missed the nuance (and humor) of my comment - since Tesla employs a direct sales model (i.e. no dealer middlemen) they don't get to record a "sale" until the vehicle is in the hands of customers.

This dynamic means that if customer deliveries slow to a trickle, the company is 'stuck' carrying inventory on its books - unlike a traditional automaker that can book sales to dealers and 'smooth' sales somewhat. I'm not saying that either way is better - its just that Tesla's way is non-traditional.

Most cars are "built-to-order" so I would imagine that Tesla would just slow down production if there were not enough orders as opposed to creating an inventory of new cars. The inventory you see on the website is 99% used, loaner cars, showroom cars, or cars with minor defects that were fixed. If you want a new Tesla, you go to the website, pick out everything feature you want, then wait 1-3 months for your car to arrive. Eliminates the impulse buy, but it does mean you get exactly what you want.

I recognized the nuance potential of your comment, but I was assuming it was an honest question. Hence my reply. Seems someone(s) felt my answer wasn't worthwhile. Oh well...

At least in my state, any dealer that has loaners has to actually purchase and title them. So they show as a retail sale. Which means they cannot be sold as new, regardless of the mileage. Back in the 70s I remember a dealership loaning me a car, and they just pulled something off the lot and put dealer plates on it. They don't do that any longer.

In this case you might be partially right, slowing things down may increase the cost of each car and decrease the margin. It also may not since many workers are putting in overtime so the cost of labor might decrease. Either way, they are not building inventory cars at the moment, all cars coming off the line are going to buyers with the exception of some cars that are used for stores and loaners.

With a 30% margin, there is room to slow down a little if the demand is not there.

Also, the hypocritical propaganda needs to stop. Tesla is as American as a car company can get. They are employing tens of thousands of workers, many with six figure salaries. Here is a full breakdown of ALL subsidies the companies have ever received: https://electrek.co/2015/06/02/complete-breakdown-of-the-4-9-billion-in-government-support-the-la-times-claims-elon-musks-companies-are-receiving/

Go through the list, those are a drop in the bucket compared to what the oil companies you clearly work for receive.

That's why I said "may," I do know almost everyone is working well over 40 hours a week and the factory is practically going 24x7. I honestly don't know whether cutting the overtime and double overtime will be enough to cover the loss of utilization from sunk cost assets, but you are probably right on this one as I said before. I also think it depends on the severity of the cut, it's not all black & white. If they drop production by 1%, I don't think it would drop their margin on each car by more than 1% factoring in overtime and variable cost savings. If they were to drop production by 50%, they would seriously be in the negative for each unit I'm sure (maybe -10 to -20% gross margin).

Thankfully the demand is still holding up, they are still spending $0 on advertising. I think the European promo is a good way for getting advocacy (people with a loaner show their family & friends). I was the first person in my office with a Model S, now 8 people are on the list for a Model 3.

Leasing wasn't even an option when I purchased mine, and it's a 40 KWh Model, 2013. no supercharging. I used to spend $350/mo on gas, now I spend $50/mo extra charging at home. Even with only ~140 miles of range, it covers all of my needs and I don't have any sort of range anxiety. I am seriously tempted by the Model 3 though--I really want self-driving functionality, even basic autopilot will make my commute much better. I love the car (obviously)--it's my 4th car, and the best car-buying decision I have ever made.

I will never purchase an ICE car again, nor will anyone in my family. It is only a matter of time before you break down and get an EV as well. It might be 20 years from now, but eventually the cost will make going electric inevitable (ICE costs are staying flat, BEV costs are going down). Enjoy the fumes while you still can ;)

Ah, okay I better understand your position. I'm still confused as why you are not equally as offended by oil/gas subsidies unless you work or heavily invest in one of those companies.

The environmental factor for me personally is a side benefit and was not part of the purchasing decision. Honestly, I wanted a Tesla first and foremost because it was an amazing car that is really fun to drive and the electric aspect was a convenience and cost feature for me.

But since you brought it up, even if you are running a factory that is 100% coal and piping the power to a battery, it will still generate half the CO2 as running an ICE engine off gasoline. The Tesla batteries are all Nickel-Graphite. Only 2% of the whole battery is lithium.

There is some irony that Tesla's batteries can double the output of most power plants regardless of how the energy is generated. Their energy business could easily be larger than automotive. There is strong economic incentive for grid storage that will only grow as costs drop.

Solyndra is not an adequate analogy. They had no real competitive advantage and were spending money unwisely. I have seen the Solyndra campus, they had $5,000 shower heads in their gym. Oh, and unlike Solyndra and GM, Tesla actually paid back their government loans--all of them. Elon has stated that ending ZEV credits would actually benefit Tesla and that subsides are no longer needed for solar to be successful, so he's not exactly begging for scraps from Uncle Sam. Let's end all the subsides and see which technologies survive.

There is so much hypocrisy and irony in what you are saying it is not even funny. I have to wonder if you are working for an alt-right superpac.

Chrysler received $17.5 billion in government handouts.
GM received $50.3 billion.... let me say that again, $50.3 billion.
Ford received $27.5 billion
The oil industry gets over $500 billion in subsidies and tax breaks a year.

There was no one forcing (and no real incentive) for Tesla to payback the loan EARLY, which is what they did, with interest. I have extreme suspicion on your motives for singling out Tesla.