The Audi ETron Has Now Outsold Tesla Model X And S - Tesla, Inc. (NASDAQ:TSLA)
Volume consumer deliveries of the Audi eTron started in Europe in mid March and in the U.S. None of these four vehicles are perfectly identical in size, shape or some other attributes. That鈥檚 not to be expected at this stage of the electric car market. There are too few models in the market for consumers to have the luxury of exactly similar cars, from different brands. At this stage of the electric car market, the main reason these cars very much compete with each other is that they are priced relatively similarly. The two competitors from Tesla, as well as the Jaguar, are all within a few thousand dollars of the Audi鈥檚 price. 75K, plus or minus a few, these have been the four cars you could have taken delivery of in April and May of this year. It鈥檚 as simple as that, from a comparison perspective. 鈥?and the respective national vehicle registration agencies (DMV equivalent). One further data point to help interpret the table above: The 鈥淓urope鈥?lines near the bottom are the ones from here, which includes all European countries, including smaller ones - but does not break them out.
Hence, I show that 鈥渕issing鈥?Europe line to make the reconciliation explicit. The site also has not yet published the total European number for the month of May, so that number is obviously missing in the table. I will enter it as soon as it becomes available - which could take another few weeks. Let鈥檚 then turn to the month of April, which was the Audi鈥檚 full month of availability across Europe in terms of actual consumer deliveries. Any deliveries in Europe before mid-March were mostly for dealer demo cars, not 鈥渞egular鈥?consumer sales. This is typical for almost any new car launch in Europe. As you can see in the table above, on a combined basis the month of April was approximately a tie between the four models. Audi was largest in Europe, whereas the two Tesla models dominated in the U.S. Then let鈥檚 turn to May, which was the first full month of availability of the Audi eTron also in the U.S.
As you can see in the table above, in May the Audi eTron extended its sales lead in Europe, while also narrowing the gap vis-a-vis Tesla in the U.S. On a combined basis, that meant that the Audi eTron became the best-selling luxury BEV (battery-electric vehicle) in these geographies in May. Conclusion: Audi eTron has become the best-selling luxury BEV. In the U.S. and Europe combined, the Audi eTron reached approximate parity with the Tesla Model X and the Model S in April, and then took the lead in May. Audi鈥檚 lead in Europe was decisive in both April, and grew even more in May. It's still early days, and Tesla tends to have a good third month of any quarter, so I expect Tesla to retake its lead in June - before Audi once again moves its position forward in July and August. We also will see the effect of the initial 鈥渟ell in鈥?on Audi鈥檚 numbers in the next few months.
It's too early to judge that effect quite yet. It too is beating each of Tesla鈥檚 two luxury models in Europe, but by a lesser margin than Audi. Then add Jaguar鈥檚 lesser performance in the U.S., and it could not match Audi at least in April and May. Two 鈥淭esla-Killers鈥?or Two Hundred? All in all, there's no 鈥渙ne鈥?so-called 鈥淭esla-killer.鈥?Rather, over the next three years, the investor needs to view this unfolding of the competitive landscape as a Wildebeest on the African savanna. The Wildebeest can likely fend off a Hyena or two, kicking hard. However, once more than half a dozen Hyenas have arrived at the scene, attacking the Wildebeest from all angles, the cumulative weight of the entire flock is likely extract a significant pound of flesh. With approximately 200 electric car models being launched by the end of 2022, this is the kind of cumulative damage that will be done to Tesla鈥檚 margins too. The Audi eTron alone has raced ahead of the Tesla Model S and X as of May 2019, and the Jaguar i-Pace is nibbling at the heels.
Those are merely the two first Hyenas to show up at the Wildebeest鈥檚 ankles, however. By 2020 and 2021, there will be many more models from Mercedes, BMW, Volvo/Polestar, Ford, Maserati and indeed even Audi and Jaguar themselves. This is why it really doesn鈥檛 matter much whether Tesla happens to have 鈥渢he best car鈥?as defined by whichever particular little measure such as 0-60 MPH acceleration time or equivalent. In a competitive environment where indeed an oversupply has been mandated by political legislation, margins will be compressed for all market participants. Even 鈥渢he best鈥?product in the market will feel the pressure from the kind of discounting that will be necessary to move too much product to too few willing consumers. That鈥檚 the most fundamental long-term short thesis on Tesla: Simply too many competitors driving down margins. The auto industry moves fast, and it can be tough to stay on top of everything that's happening. I designed Auto Insight For Wall St. to keep you aware of all the changes without your needing to spend all the time. I attend new vehicle launches, press conferences, and industry events and share that insight with my subscribers. Sign up for a free trial today. Disclosure: I am/we are short TSLA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Additional disclosure: At the time of submitting this article for publication, the author was short TSLA. However, positions can change at any time. The author regularly attends press conferences, new vehicle launches and equivalent, hosted by most major automakers. Audi hosted vehicle launch events.