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Tesla Motors Inc.: We Don’t Compete With Electric Vehicles

Model S. Source: Tesla’s official Twitter feed.

While Tesla’s Model S is often compared to other electric vehicles, or EVs, the company insists it doesn’t compete in this category. While the assertion may raise eyebrows, it actually makes sense. Even more, the idea that Tesla isn’t competing with EVs is a great point for the bullish case for Tesla stock.

Who does Tesla compete with, then?
“We don’t compete with EVs,” said Tesla vice president of corporate and business development Diarmuid O’Connel at the auto show in Detroit last week. The Model S “was designed to compete with other vehicles in its class such as the BMW 5 series or the Mercedes E-Class or S-Class,” O’Connel said. Even now that it is going into China, the company doesn’t see the Chinese electric-car maker BYD as a competitor.

For Tesla investors, this is good news. The market for cars in this class is very large. Here are the 2013 global sales for each of the three models O’Connel alluded to:

BMW 5 Series: 366,992
Mercedes-Benz E-Class: 242,562
Mercedes-Benz S-Class: The “best-selling luxury sedan in the world,” according to a Mercedes-Benz press release.

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