Is a Tesla better than a Porsche?

Elon vs. the World

Let’s play word association.

I say LA, you say…

I say electric car, you say…

I say automotive innovator, you say…

Now, I can’t read your mind, but I’ll bet that your answers are:

• Hollywood (or the beach or Three’s Company)

• Tesla

• Elon

Those are great answers! But, you’re so predictable.

I love LA, and I love beach culture. But what gets my motor revving is LA’s amazing car culture.

With that in mind, these three alternatives to the word association game accurately describe my most recent visit to LA:

• LA’s amazing canyon roads

• Porsche Taycan

• Ferdinand Porsche

This picture I snapped that weekend sums it up:

My dreams all look like this.

Where am I going with this?

Pacenotes is an investing blog that uses car culture and motorsports metaphors to help us understand investing just a little bit better.

Today, I’m leaning deep into my interests and writing a car review. In fact, I’ll review two cars. Tesla’s awesome Model 3 and Porsche’s divine Taycan. 

Don’t leave! This is still about investing! Every car review is a review of that company’s products and its potential to sell those products. At the end of this review, we’ll understand Tesla’s place in the market a little bit better.

Plus, who doesn’t want to be an automotive journalist? This is my stab at it!

For those who prefer the TL;DR version:

The Porsche Taycan is Porsche’s first EV. It’s as good as you’d imagine. It drives like a sports car, is so attractive that people take pictures with it, and it can charge about as fast as a Tesla.

The Model 3 is not as much fun to drive as the Porsche, despite being quicker in a straight line. Its strength lies in its simplicity. It’s the iPhone of the car world.

Regrettably, I’d buy the Model 3 over the Porsche and every other EV out there. But that will change soon; the competition is getting very good! From an investor’s perspective, Tesla’s shares remain expensive at the same time that the company is about to lose market share in the EV market.

As always, this isn’t investment advice. It’s just my take on the market and an example of an investor’s thought process.

For the full story, read on.

The Tesla Model 3 Performance

Let’s start by reviewing the Tesla. My Tesla. It’s a Model 3 with the performance package that we bought not long before Covid ravaged our world. 

In those days when I still went to an office, I’d take coworkers out for rides. I’d unleash the Tesla’s power by stomping on the throttle for a run to 60 mph that took just about 3 seconds. They’d giggle uncontrollably. And so would I. Power corrupts.

Fast forward a few months and I had nowhere to go. The Tesla just sat.

Until it was stolen.

I didn’t call the police; I knew exactly where the car was. The thief was my wife. And that’s important to the story of Tesla. You see, Tina is not a car person. Before our Tesla, her favorite car was a Subaru. See? Definitely not a car person.

The transformation happened on a road trip to Utah. Tina, from the back seat, said “I get it! This Tesla is much more comfortable than my Subaru.” On a road trip, the Tesla is relaxing. It cuts through the air in silence; the only noise coming from its sticky Michelin Pilot Sport tires and the wind.

Yeah, the Tesla is good. How good? The Model 3 is an iPhone on wheels. It’s easy to use, entertaining, and efficient. It’s sexy and makes you look sexy, too.

The Tesla is like a good friend that remembers your preferences: music, seat placement, and temperature. It also locks itself when you walk away from it.

Tina will have to weigh in, but I think that’s why she likes it so much. It takes care of all the things she doesn’t want to do in a car.

Tesla wasn’t the first electric car maker. But it was the first to make a legitimate gas car replacement. Elon’s genius was in building a car that did away with range anxiety. Driving on I-80 through Wyoming, a new model 3 will travel almost as far as a Prius, over 300 miles. And you can watch an episode of Modern Family while you recharge. The Prius, on the other hand, will have to fill up at the nearest Stinker. 

Tesla’s infotainment system is easy to use. You don’t even need carplay. It hooks up to Spotify immediately and the visuals in its nav system are based on Google maps. Many functions are voice activated, too. Tell your Tesla to “Open Butthole,” and its charge port will pop open. In “emissions mode,” it will fart on command. (Oh Elon)

For a car built and designed in California, it’s pretty good in the snow. Just don’t forget to put it in low power mode and turn off regenerative braking. And get snow tires. It loves to drift on frozen roads but it’s easy to control and fun. Its traction control hasn’t let me down yet. I completely trust it on an icy highway, which is something I cannot say for our “ghost-walking” Subaru.

As a highway cruiser, it’s amazing. As a daily driver for all of your errands, it excels. As a machine that simplifies all of the little tasks that come with driving a car, it’s the best.

The excellence ends there.

Our Model 3 was built in December 2019, when Tesla was cranking through thousands of orders for customers hoping to get the $7500 tax rebates that were still available. I can vouch for the quality issues that professional reviewers have seen. The gaps between body panels are nowhere near as consistent as those on a 1992 Lexus. It’s 100% reliable and very comfortable, but fit and finish feels like it was managed by software execs rather than a luxury car manufacturer. 

The interior is dominated by an oversized touch screen that sits in the middle of the dash. There are no other gauges, forcing the driver to take their eyes off the road to check speed or adjust temperature. This is a cost savings measure in the Model 3 and I assume that Elon wants you to interact with the car’s voice controls (Tesla, turn up the heat or Open Butthole). But my 2012 Volkswagen was far better at understanding my voice commands.

Please, car manufacturers, bring back buttons and dials!

Teslas have won their class at the Pike’s Peak Hillclimb, so you’d expect that they’d be fun for a blast up Boulder’s canyons. It’s a decent canyon carver, but not my first choice for a day of sporty driving.

For one thing, it’s too fast. It rockets out of corners and hits ludicrous speeds in a way that’s dangerous. Besides being illegal and unsafe, I don’t have the reaction time to drive at Tesla speeds in the canyons. Nor do you! It’s more fun to drive a slow car fast than a fast car slow.

It’s also a heavy beast and that weight can be felt under braking or when turning. The batteries sit low in the chassis, so the center of gravity is confidence inspiring. It asks you to take turns faster than you should. (I’ll admit it. That is fun!)

The controls lack the feel that a sporty car should have. They feel fine on a highway but not in the canyons. Specifically, the steering is numb and there’s more road feel through your butt than through your hands. As I’ve said before, the car’s traction control is excellent. While the driver may not know what’s going on at the wheels, the car’s computers keep it pointed in the right direction. 

OK, it’s not a car for the canyons. But I have autocrossed it. In an autocross, the driver navigates a short, twisty course in a test of skill, rather than outright speed. Sort of like driving a country road quickly on a snowy night. Handling is neutral (it doesn’t fishtail) and that power really helps it perform well. It’s even got Track Mode, which lets the driver fine-tune the drivetrain and stability assist. You know what? It’s a fun autocrosser! Not as fun as my 30 year old Porsche, but good enough.

Ours doesn’t have Full Self Driving, which is a $15,000 option that turns the car into a robot chauffeur. I’ve heard that it drives as skillfully as Elon writes tweets. No, it’s better than that. Your Tesla will never overpay for a social media company.

Autosteer, which is just adaptive cruise control, is great. It’s engaged via a double tap on the gear lever and it maintains speed while steering the car in its lane. Just keep your hands on the wheel; autosteer is attracted to off-ramps.

On the whole, the Tesla’s pretty great. Forgetting about Elon, we’d buy another in a heartbeat.

But, the Tesla’s got competition!

The Porsche Taycan

The Taycan is Porsche’s entry into the EV market. And it’s amazing. The top level Taycan Turbo accelerates so quickly, it’ll make you carsick. 

My rental was the tamer base model in stunning Frozen Blue Metallic paint. It had rear wheel drive, 400hp, and an adjustable suspension that could be set to Sport mode for performance driving with a twist of the steering wheel mounted knob. With an MSRP of around $100k, the Taycan competes more closely with Tesla’s Model S.

The Taycan is better finished. It has the quality you’d expect from a 74-year old German car maker. I loved the interior. The front seats were comfortable and highly adjustable. The rear seats are a tight squeeze for adults.

The dash retains the five gauge layout familiar to Porsche owners since the 1960s, but now digital. While I prefer old fashioned analog gauges, I liked that the display was easy to read, driver centric, and updated the information shown when I changed drive mode settings. The HVAC controls are located in a digital panel between the driver and passenger and beat the Tesla’s controls hands-down.

The Taycan has less range than the Model 3, about 240 miles. If you can find an 800 volt charger, it will charge at least as fast as a Tesla on a supercharger. Up to 80% in 22 minutes. Range anxiety advantage goes to the Tesla.

The weekend that I rented my Taycan coincided with the Luftgekuhlt Porsche festival. Porsche nuts, like me, were in town from all over the world. 

The legend. IMSA and Trans Am Champion.

I took the Taycan to two car shows, where it was welcomed by the vintage 911 crowd. People took pictures with it and thanked me for bringing it. It’s a gorgeous thing and people like it. No, not everyone is ready for the EV revolution, but having a Porsche in the mix will make it palatable for the die-hards. 

I drove it through LA’s famous traffic to visit family in Pasadena. If you’ve never driven an EV in traffic, I’ve got news for you, it’s as good as it gets. Instant torque means that when you spot a gap, you can take it. The Taycan isn’t any better than the Tesla in traffic. All EVs shine on crowded roads.

Lunch with my cousins was fun, but I had business to attend to. Pasadena sits at the foot of the San Gabriel Mountains and the famous Angeles Crest Highway. If you love twisty roads, put this roller-coaster of a ride on your list. It’s serious fun. So serious that Porsche was testing its newest 911 lineup while I was there. Please hire me Porsche!

The next gen 911?

So hot, Smokey the Bear needs help!

How’d it perform? 

I loved it! The Taycan is not a sports car. But it was nearly as much fun on Angeles Crest as the Porsche Boxster I drove there in 2019. It’s heavier than my Tesla, but felt lighter, probably due to the suspension’s sport setting that limits body roll in corners. The Taycan is fast, but it’s not a point-and-shoot missile like the Tesla. This made the car more fun. I could feel the speed building, which I enjoyed.

The Taycan was great in corners. Steering was direct with good feedback and the steering wheel felt great in my hand, like the car was holding me and helping me drive better. With the Tesla, you hold onto the steering wheel. With the Taycan, your hands feel at one with the car.

Ignoring price, the Taycan has no real weaknesses. Other than having less range than the Model 3, it does everything any decent EV does but is also a blast to drive. The range is adequate for all but hard-core road-trippers. At home, you’ll just have to charge 20% more frequently than the Tesla, which is still easier than going to the gas station.

I could even see the Taycan being a one-car solution for the enthusiast who wants a 911 but doesn’t have room for a sports car and an EV. No, it’s not a 911 replacement, but it’s the closest you can get today from the EV world.

I haven’t driven the more premium Taycan models, but have read that the Taycan GTS is the one to have, if you have the means. GTS adds more power and AWD. I’d go for a Taycan GTS Sport Turismo if I really had the means. The Sport Turismo models are the long-roof wagon variants.

So, what’s the verdict?

Let’s suspend reality and ignore price.

The Taycan is more sophisticated and fun to drive. But the Tesla is the automotive version of simplicity. Today, for my lifestyle, I’d rather live with Tesla’s longer range, better charging network, and ease of use. I’ll do my best to ignore Elon’s rants. I’ll also keep my eye on the Taycan and save up.

I’d rather drive the Taycan but I’d have to buy the Tesla. For now.

And I’ll still have my 1992 911 for when I really want to have fun.

Either way, if this is what our electric driving future has in store, I say bring it!

Investor considerations

So, what should we consider as investors? The Tesla is good. It’s still the market leader and will probably remain that way for a while. However, Tesla’s initial success was from converting traditional car buyers over to EVs. They cannibalized sales of Audis and BMWs. You could see that in the 2019 delivery numbers. Tesla’s sales increases were nearly identical to other manufacturer’s decreases. They gained market share at the expense of their competitors by offering a unique product.

It’s 2022 and there’s solid competition at every price point in the Tesla universe. Their product is no longer unique.

Ford just sold its 150,000th Mustang Mach-E, which is similar in performance and size to the Model Y, but 20% cheaper. Ford even beat Tesla to the pickup truck market with its normal-looking F150 Lightning. EVs don’t have to look like spaceships!

Except for Kia’s EV6. That thing is gorgeous; it looks like a futuristic version of Italy’s best rally cars from the 1980s. Plus, its range and charging speed rival the Model 3’s.

How about the startup EV manufacturers? Rivian’s trucks are coveted by every dad in Boulder. The upmarket Lucid was created by former high-ranking Tesla employees who left because they were exhausted by Elon. 

Tesla cars are huge sellers in China, but Bloomberg reported that Tesla would cut output at its Shanghai plant by 20%, due to reduced demand. Chinese companies are diving into the market, too, to sell low-cost EVs.

This wouldn’t be so bad if Tesla shares were trading at a reasonable price. But Tesla is valued at around 60x its trailing 12 months earnings. In comparison, Ford trades at just 6x and the S&P 500 is close to 20x. Tesla is priced like a company growing at a high rate of speed, which seems unlikely as its CEO insults its core customers who are being wooed by new entrants’ competitive products. Elon needs to triple sales to make its current $180/share reasonable. I can’t see how this is possible. (not advice!)

The point is, Elon had first mover advantage in the EV space. And it made him the richest man in the world. The easy money has been made and I’ll be watching this industry with interest.

I may be exhausted by Elon, but I’m energized by the EV industry.

Hope you enjoyed this one!

Jason