On September 9th, Tesla opened its first service center in Reykjavík, after Icelanders had inquired frequently over the previous two years, about whether that day would ever come. It remains unclear what took Tesla so long to enter a country with such a sales potential.
Last year, a tweet reached Elon Musk asking in the direct Icelandic fashion what the problem was with setting up a Service Center when there were more electric vehicles sold in Iceland than in Denmark and Finland during the previous year, where Tesla already had set up operations. Musk promptly replied and it looked like he was going to act on the request.
— A Tesla In ICEland (@ATeslaInICEland) 5. Mai 2018
Just when Icelanders grew impatient- over a year passed since their hopes had been raised- Tesla announced that it was opening a Service Center on the 9th of September. Since yesterday, anyone who can afford the five to fifteen million krónur car can get their hands on it in Krókháls 13, 101 Reykjavík. Or order it online, like a takeaway pizza from Domino’s.
Why the delay?
From a business perspective, the Icelandic car market is highly attractive for foreign investors like Tesla. Not only does the arctic island derive all its energy from renewable sources but it is also on rank 14 of the highest per capita income in the world and it’s a generally acknowledged truth that many Icelanders love to spend their excess fortunes on cars. Thus, it seems fair to ask, what took the leader in the luxury electric mobility segment so long, to enter a market with such incredible sales potential.
Admittedly, as promising as it sounds, Iceland is a relatively small market with a population of only a little over 350.000 inhabitants, and most of them are certainly not in the position to buy a Tesla for several million krónur. Like everywhere in the world, wealth is concentrated in the hands of a small percentage of the population and well- those people probably didn’t hesitate to have their Teslas imported already if I they are environmentally concerned.
Popular but highly-geared
Further, Tesla was not able to capitalize on a first-mover advantage, since other electric car suppliers took the leap to Reykjavík beforehand. Fifteen percent of the Icelandic car fleet is, already electric. Tesla being a highly popular company is, however, not in a position to gamble. The stock price is soaring but a look in their balance sheet suffices to realize that the manufacturer is highly-geared. The hype around Tesla fails to acknowledge that their debt is immense. If this is one of the famous stock market bubbles, as seen in the dot.com era, Icelanders should appreciate that Tesla is around now. It might not be forever.
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