The auto industry follows several rules that are not explicit but widely known by all the players. Each automaker tries to meet what the market views as the standards regarding many topics: safety, design, technology, performance, and quality. They all try to innovate and make noise with their own interpretation, but in the end they all act within certain limits.
Life cycle of cars
One of them is the life cycle time of each car. It refers to the time that passes between the presentation of a new vehicle and the moment when the company stops its commercialisation. This cycle includes the reveal, presentation, introduction, growth, maturity, facelift, decline, and reinvent/ramp down. It happens to cars and many other products in the market.
In the case of cars, the life cycle time is usually determined by the market. In the countries with low income, the car generations last for longer with cycles of more than 10 years. It is expensive to develop and launch a new generation, and the consumers usually can’t afford these big investments. In the mature markets or developed economies, the technology and efficiency at the plants is allowing the carmakers to bring new cars more often.
In Europe, North America, South Korea, Japan, and more recently China, we are seeing new generations of cars every six or seven years as an average. The facelifts comes after three years of the launch.
The Model S, a strange exception
Despite the non-explicit rule regarding the product life cycle, there are exceptions. One of them is the Tesla Model S. This saloon from Tesla debuted on June 22, 2012, after the first ten customers received their cars at the Fremont factory. It was Tesla’s first massive production car and started a new era for the company.
Since then, the Model S has received several updates, facelifts and improvements that include not only its exterior design but also its performance and interior. Today’s Model S is definitely a better car than the one they presented 10 years ago. However, it is still the same car in terms of platform, main structure, and overall exterior design. A new generation usually involves changes of those elements too.
During these 10 years, there have been at least two generations of the Mercedes CLS and E-Class, Audi A6 and BMW 5-Series. Although new and more powerful versions of the Model S have been introduced, based on its sales record, it is losing a lot of ground.
If the competition gains ground
The question persists, why is Tesla taking so long to bring an all-new Model S? Part of the sales decline is explained by the production challenges Tesla has had at its Fremont plant. They stopped the production for some months so there were no cars available to buy. Nevertheless, the Model S is getting old and is having more competition than ever.
Last year for example, Porsche almost doubled the global sales of the Model S with its Taycan. The BYD Han electric, a direct competitor for the Chinese market, sold 79,000 units, or almost 4 times more.
Many will argue that it is obvious to see the sales dropping when there is no production. Still, it does not explain why the brand is taking so long to introduce an all-new generation when its peers are moving faster. Is it a different approach?