Tesla Motors Inc: UK Orders Could Be A Strong Selling Point

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Tesla Motors Inc (NASDAQ:TSLA) has a long list of achievements to boast of. The company’s Model S sedan has been named “the best overall car” of 2013 by Consumer Reports, beating Toyota Prius, BMW 328i and even Audi A6. The EV maker launched its right-hand drive car in the UK last month. Now the UK government has expressed interest in buying Tesla cars for its fleet.

Tesla Model S costs more than the UK government’s allocated budget

Of course, there are still a few challenges before the company wins that contract. But if Tesla gets this order, it will be a major selling point for the San Francisco-based company. It could increase consumer confidence in the company’s cars the boost Tesla stock. According to the British Department of Transport, the Government Car Service needs to buy 150 green cars.

The UK government’s plan comes just days after Chinese government made it mandatory that at least 30% of the total government vehicles purchases by 2016 be electric vehicles. Anyway, things won’t be that easy for Tesla in the UK. The government has a budget of £5 million (about $8.6 million) for all the 150 cars. It works out to £33,000. However, the Model S sedan costs £50,280 in the UK, about £17,000 more than the government’s budget per car.

BMW i3 could be a competitor to Tesla

In contrast, the BMW i3 costs £30,000, excluding the range extender. One thing that favors Tesla is the range. The Model S has a range of more than 250 miles, compared to just 81 miles for BMW i3. Let’s see if the government is willing to increase its budget to get premium cars literally crush the competition when it comes to the range.

Tesla will start delivering cars in Hong Kong this week. The company’s upcoming mass market car has been named Model III, which would cost about $35,000. Due by 2017, the Model III will have a range of at least 200 miles. Separately, the Elon Musk-led company said that it will report its second-quarter results on July 31.

Tesla shares gained 0.11% to $220.26 at 11:02 AM EDT on Monday.

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