In 2009, the six year-old Tesla delivered around 800 cars to what may at the time have seemed a rather limited demographic: wealthy, green, petrolhead tech geeks. CEO Elon Musk wasn’t deterred. A year later, the company raised $226m (£152m) in its IPO, ploughed the money into R&D and never looked back. It seems to be paying off. The firm’s total deliveries for 2015 were 50,580. That’s a lot of tech geeks.
It was boosted by a record fourth quarter, when 17,192 customers received a Model S and 208 (yes, 208) received a Model X SUV. To be fair to Musk, the Model X only launched in September, but that’s still not a number you’d expect to see on the books of a major car company. Yet, increasingly that’s what Tesla is beginning to look like.
Compare it to rival BMW Group. The German firm delivered 1.1 million BMWs, Rolls-Royces and Minis in the first six months of last year. A beermat calculation would indicate that Tesla’s monthly sales are now running at something like 10% of its rival’s, despite being valued at just under half what the Bavarian giant is worth ($31bn vs $70bn). Given that Tesla’s most recent quarterly deliveries were 75% up on the same period in 2014, it’s fair to say it’s looming ever larger in BMW’s automatic anti-dazzle rear view mirror.
The fact that Tesla is gaining ground on its high-end competitors doesn’t necessarily mean it will catch up, of course. Eventually, the growth will have to tail off, though it would be surprising if it happened any time soon (not least to the investors who’ve valued it so highly).
Looking forward to this year then, the key question is whether Tesla's growth is more dependent on supply or demand. With its super-battery producing ‘Gigafactory’ soon to be operational, production capacity is sure to grow, but is everyone actually queuing up to buy a Model S (or indeed, Model X), or is it the automotive equivalent of Google Glass (i.e. lots of hype but very little actual interest)?
It seems unlikely that supply has been the only limiting factor so far in the company’s growth. If there was indeed a tremendous queue of people who’d do just anything to get their hands on a Tesla, then surely Musk would have raised the price without having to worry about his market penetration targets (to be fair it's already pretty steep - £56,000 for a basic model S, up to £117,000 with all the extras).
As far as demand goes, the limiting factor is likely to be the same as for all electric cars – the dreaded range anxiety. Here there is some cause for Musk to feel optimistic for 2016. The UK for example already has over 50,000 charging points, and the very fact that electric cars like the Model S are selling well indicates that perceptions of the charging networks in its target markets are improving. It’s a long way off being as developed as the petrol station infrastructure, but this key barrier is falling, which you’d expect would boost demand for all electric cars.
While 2016 looks likely to bring Tesla record sales then, it will not be a turning point. The Model S and Model X are high-end products, after all, and their market can only be so big as a result. The decisive moment is likely to come in just over a year, when Tesla is due to release its mass-market product, the Model 3.
How quickly electric will displace petrol and whether Tesla can use its reputation in the high-end electric market to squash competitors in the mass market (here’s looking at you, Toyota Prius) are both crucial questions, but so too is how long investors will be willing to stomach heavy losses - the firm was $560m in the red for the first nine months of last year - for below expected growth.
In August 2014, Musk said Tesla would deliver 100,000 cars in 2015, an overshoot that isn't all that surprising from a man who has a serious intention to build a colony on Mars. For now though, shareholders continue to invest their faith as well as their capital in Musk.