Tesla Struggles to Sell Out P85D Supercar

By Douglas A. McIntyre Updated Apr 14, 5:40AM EDT · Published Apr 12, 8:55AM EDT

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Apple Inc. (NASDAQ: AAPL), the world’s most formidable consumer electronics company, recently announced that demand for the new Apple Watch has gone beyond expectations. However, Tesla Motors Inc. (NASDAQ: TSLA), the world’s preeminent electric car company, cannot find enough customers for its new supercar P85D.

Tesla offers the P85D on its website for $105,000, for those who want to pay cash. The delivery charge, in addition to the purchase price, is $1,200. The federal government gives a $7,500 tax credit to each buyer of the P85D. The company adds that gas savings over five years should reach $10,000. So, the net price comes to $87,500. Options can push the number several thousand dollars higher

The P85D has become the flagship of the Tesla model line. Zero to 60 in 3.1 seconds. For only $2,500, a first generation “auto pilot.” And, yet, the P85D is not sold out. Cars are still available in May, when the newest Tesla is launched. It takes only a $2,500 deposit in order to get into this short line. PayPal can be used as a payment method. American Express cannot be.

The P85D has gotten as much press as any other new car introduction since the Model T was first offered by Henry Ford in 1908. Ford sold over 15 million Model T cars before it went out of production in 1927. Tesla may not sell tens of thousands in the next several years. Based on its current, tepid reception, even that figure might be hard to attain.

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Tesla management and car industry experts must be asking why the P85D has not been more successful. Tesla has received rave reviews for product quality and its pioneering technology. The most frequent answer seems to be that the Teslas are toys for the rich, and demand of those toys has slackened. Alternatively, most major car manufacturers offer, or soon will, electric cars, although some have tiny gasoline motors.

Tesla has not been able to maintain its reputation as a leader in the auto industry, if its share price can be used as a measure. Tesla stock recently moved close to a 52-week low. The patina has come off Elon Musk’s invention.

Tesla cannot claim that there is a long line of people waiting to get a P85D. This situation is nothing but bad news for Tesla.

Editor’s note: Someone named “Ricardo” ([email protected]), who claims to work for Tesla, made the following comment in a note to 247:

Regarding your piece today, the reason P85D is available in May is because we prioritize production and delivery of the performance version of the car.

We can’t figure out how this explains supply and demand.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.