Tesla, the ultimate disruptor, rolls into Australia
Tesla is in discussion about potential locations for Australian charging stations, which could be rolled out in coming months.
MATTHEW SMITH
Electric car maker Tesla Motors is ready to roll in Australia with a direct to consumer sales and service model designed to bypass dealerships used by traditional car makers, with a first Australian glimpse on Friday.
The disruptive car manufacturer led by Paypal co-founder Elon Musk will start selling cars through new retail outlets and service centres in Australia for the first time this year.
Tesla has started erecting the signage onto the site of one service centre in the Sydney suburb of Artarmon and plans to open another centre in Melbourne in coming months, featuring test drive and sales services. It already sells cars online through its website.
The US-based company is also scouting space in key retail shopping centres for showroom space to complement its online sales presence, Health Walker, Tesla’s Australian spokesperson, confirmed. It is understood Tesla is speaking with Scentre Group, owner of Westfield in Australia, to secure leases in prime mall locations to showcase its cars.
APPLE EXPERIENCE
“From the minute the customer walks into the store they will be dealing with Tesla and we will be taking them on the journey right through to delivery and service,” Mr Walker said.
“The store experience is probably like an Apple experience in many ways with touch screen displays and merchandise for sale,” he said.
Tesla will adopt the same sales model it uses to sell vehicles in the United States direct to consumers. While there has been some resistance from various states in the US top selling direct, Mr Walker said it was unlikely Tesla would encounter the same resistance here.
Governors from various states including North Carolina, Texas, Virginia and New Jersey and most recently Michigan have mounted opposition to Tesla selling its cars online and direct based on existing franchise laws that protect car dealerships.
Early adopters in Australia who bought a Tesla Model S online are poised to receive the vehicles in an official handover, which will happen soon on an as-yet unconfirmed date.
Simon Hackett, the founder of Australian internet service provider Internode, which he sold to iiNet in 2011, will be among the first private owners of Tesla cars in Australia. Hackett also has a multimillion-dollar holding in NASDAQ-listed Tesla stock.
A “STORY STOCK”
Tesla has become a so-called “story stock” with no earnings but a high valuation based on investors’ expectations for its future potential.
Among the most shorted stocks on the US exchange, Tesla’s detractors believe the high expectations investors have for the company to control the as yet untapped electric car market will be shattered when existing car manufacturers start adopting the technology.
But the Tesla share register is stacked with believers, many of whom including Sergey Brin and Larry Page, the co-founders of Google, are backing Musk’s vision.
Rather than start with an existing car design and add a battery, Tesla is starting with a clean sheet of paper – designing a battery and building a car around it. The company revealed more details about its planned $US5 billion ($5.4 billion) battery plant – or “gigafactory” – to be located in the Nevada desert.
Despite the company’s massive capital expenditure and miniscule sales to date, investors have piled in, pushing its market capitalisation above $US35 billion. Tesla stock is currently trading at an eye-watering 258.6 times, according to Bloomberg.
On a market cap basis, investors have decided that Tesla is worth a little more than half of what rival car company BMW is worth ($US60 billion), even though BMW already sells 2.3 million cars per year.
In September investment bank Credit Suisse put a price target of $US325 per share on the company, no less than $US94 per share above where the company was trading on Thursday.
The current Model S Tesla has a range of around 500 kilometres and the company is discussion with current owners about potential locations for charging stations, which could be rolled out in coming months, Walker said.
The Australian Financial Review
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Tue, 09 Aug, 2016 - 19:08
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