Tesla Motors Inc (TSLA) Will Not Put More Than 6 Models On The Market At A Time

Posted Nov 15, 2013

Earlier this week, Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk was interviewed at the Business Insider IGNITION conference.  One of the most underrated comments that Musk made during the conference is that Tesla Motors Inc (NASDAQ:TSLA) will never have more than six models on the market at any given time.  Musk was asked if Tesla has any plans to expand the way that Ford and GM has by offering dozens of models.

Musk said that there has to be a real difference between the Tesla Motors Inc (NASDAQ:TSLA) models.  Currently Tesla Motors Inc (NASDAQ:TSLA) is selling the Model S sedan only.  Next year, they are expected to start selling the Model X crossover/SUV.

Tesla Motors Inc (NASDAQ:TSLA) is also expected to start selling a more affordable vehicle, which will cost around $35,000 and will be the size of a BMW 3-Series.  That vehicle is rumored to be called the Model E when it is released.

Ford has over 20 models for sale right now, including five sedans and five SUVs.  However, Musk acknowledged that the Ford F-150 is a powerful vehicle and is the best selling in the country.  This is why Tesla Motors Inc (NASDAQ:TSLA) plans to eventually start building a pick-up truck of their own.

Why would Musk only be interested in putting no more than 6 vehicles on the market at a time.  Despite all of the positive reviews that they have received for the Model S, there are only slightly more than 20,000 of them on the road.  GM and Ford churns out millions of cars every quarter and has a strong volume advantage.  Tesla Motors Inc (NASDAQ:TSLA) has the quality and innovation factor working out in their favor.  This is why it makes sense for them to sacrifice higher volumes in favor of quality.

What are your thoughts on this Tesla strategy?  Let us know in the comments.