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Tesla Motors Inc (TSLA) Model S Killers Are Coming

Tesla Motors Inc model s

Tesla Motors Inc is gearing up to the release of the Model X, its third car release of all time, and the EV that will turn the firm into more than just a one-hit wonder. As Wall Street looks forward to the launch of the SUV, rumblings in Europe suggest that the Model S won’t have its monopoly in the EV sedan market for much longer. Elon Musk should be looking ahead to the Model S 2.0.

Model S Killers Are Coming

We’ve seen a lot of stories about the next Model S killer for years, but the Chevy Bolt isn’t likely to be a favorite with people used to the luxury of a Tesla Motors sedan. The Nissan Leaf isn’t going to rock anybody’s world the way Ludicrous Mode does and, no matter what Aston Martin says, there’s reasons to buy a Model S beyond pure power.

Real firms making real EVs that will compete with the Model S won’t arrive in 2015, and they’re not likely to be found on the road in 2016 either. After numerous reports on the outlook for the market, however, car makers are taking notice and the Model S will have real competitors by the time 2018 and 2019 arrive.

Mercedes, which had a power train agreement with Tesla Motors so that it could not release an electric car, and still get permission to sell its luxury sedans in California, is working on its own EV designs.

BMW, which has seen lukewarm success with its i3, is planning on a pure EV i5 that will compete with the Model S in a direct way. Audi is also at work on a car that will compete directly with the Model S, right in Tesla’s back yard.

The German car-makers, who lead the luxury sedan market for so long, can feel the winds changing, and they know they’ll have to compete with Tesla Motors sooner or later. With sales of the Model S growing at a break-neck pace, it’s clear that sooner is the better option. Lucky for them Elon Musk may not have the time to respond.

Tesla Motors doesn’t have time to compete

Musk has been pretty clear with the release schedule he’s looking to meet for the next couple of years. The Model X will arrive before the end of the third quarter, and the next few months will be spent trying to fix the problems the launch is sure to bring with it and get rid of the queue for new shipments.

Tesla Motors has at least 20,000 bookings for the EV SUV and once it’s managed to get through them, it will need to start work on the Model 3, likely the most important release in EV history.

The Model 3 will come in three different configurations, JB Straubel, Tesla Motors CTO, told the Wall Street Journal back on June 15. One of those will be a crossover like the Model X, the other a sedan like the Model S. The third is a mystery.

That’s a lot of work. It’s assumed that the Model 3 will arrive in just one of those molds in 2017, the date that Elon Musk has repeated for the release of the mass market EV. That means the firm’s plans for a couple of years after that are likely laid out, and they don’t seem to include a Model S 2.0.

The nest Tesla Motors Roadster, a car that Mr. Musk made reference to in a recent call, may even arrive before the firm gets a chance to work on a full Model S upgrade.

Model S upgrades keep coming

The way the Tesla Motors  release cycle works is odd for a car firm. The Model S was first on the market in 2012, and has since gone through many updates. Elon Musk said, in the conference call to launch Ludicrous Mode, that his firm makes an average of 20 small changes to the engineering of the Model S on a weekly basis.

On top of that Tesla Motors tends to do major updates every few months. These include things like the launch of the all-wheel drive P85D and the Ludicrous Speed Model S P90D.

Software updates are another important part of the Model S cycle. The 7.0 Model S update, set to arrive soon, will bring self-driving features to the car, something any other auto firm would put in a brand new model, and back up with a slew of advertising.

Elon Musk has set his heart on upgrading the Model S in a series of iterative packages. When the German car-makers start to eat into the territory the Model S has had for itself for so many years, it will surely be time for the Model S 2.0.

Waiting for the Model S 2.0

We know, from the way the Model S has improved since launch, that Tesla Motors  knows how to bring real updates to its line of cars. Those small updates have turned the Model S from a truly good car to one of the greatest cars on the planet.

Whatever happens with the Model X and the Model 3, Tesla Motors has hold on the EV luxury sedan market. The firm will be able to hold onto that position, and grow it, if its sales in 2015 are any guide, but it will need to keep up with the competition.

Mercedes, BMW and Audi are all going to release cars that will, given those firms’ abilities, likely compete well with the Model S, and may even surpass it in some areas. Those firms have the brand power to bring people to EVs that would never think about buying a Tesla Model S.

That’s good for the market as a whole, and it might be good for sales of the Model 3 when it arrives in 2017, but it won’t be good for the Model S which will be a core part of the Tesla money-making machine in a couple of years’ time.

Elon Musk and his team are, more than likely, well aware of this, but with so much on the cards for Tesla in the coming years a Model S 2.0 might not fit into the schedule. For the time being all focus is on the Model X, and the SUV market.

If Musk and Co can convince drivers to invest in an SUV that doesn’t guzzle gas he’ll have changed the world, and no amount of Model S competitors will be able to take that away from him or the team at Tesla Motors.

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Adam Green is an experienced writer and fintech enthusiast. He he worked with LearnBonds.com since 2019 and covers a range of areas including: personal finance, savings, bonds and taxes.