Is Tesla’s PPF Offering Disrupting the Aftermarket?October 18th, 2023 by Casey Flores
What was a blip on X (Twitter) became an earthquake for the film industry that moved markets and undercut the aftermarket industry. Tesla has started offering clear and colored paint protection film (PPF) for its Model 3 and Y vehicles at two of its service centers.
The car manufacturer even named its price: $5,000 for clear, gloss, or satin, $7,500 for a monochrome color, and $8,000 for actual color. Local shop owner Tyler Vercoe of California Wraps, says is comparable with costs in the area.
“I think the pricing’s pretty accurate,” Vercoe says, though he personally charges more for full-body clear PPF.
Teslas are among the cars that get the most PPF installed most often and its Model 3 and Y options are among the U.S.’s top-selling vehicles—ranked 15th and 9th respectively.
But whose film are they using? Are they subcontracting the installation or using in-house installers?
Window Film magazine discovered installations for Tesla’s Carlsbad location are being done at its Oceanside Collision Center just north of the city. An employee at the Carlsbad Tesla Service Center says he hasn’t seen an installation done in the first week, but the location is taking orders.
With Tesla’s large and growing share of the U.S. automotive market, will this move ultimately impact aftermarket PPF sales? The public financial markets seem to think so—at least for now.
After the news dropped, XPEL’s stock did too—falling more than 12% on the announcement, shaving $40 million off the company’s value. A week later, it has yet to recover. As a result, the company made an SEC filing and released the following statement:
Yesterday, a blog post was published stating that Tesla has started offering color and clear paint protection film wraps in two of their Service Centers in California. Subsequently, XPEL, Inc (“we”, “us”, “our”) has had numerous investor inquiries regarding the contents of this blog post and the impact, if any, to XPEL. While we are not involved in this particular program, we are currently in discussions with multiple OEM’s about adding new or expanding existing programs for XPEL products on their vehicle platforms. We continue to believe that OEM involvement in paint protection film grows awareness about the product category and expands the market opportunity. XPEL’s paint protection film-related revenue (including product and service) with respect to Tesla vehicles is approximately 5% of its total year to date revenues.
While San Antonio-based XPEL isn’t the PPF supplier in this case, the company did have an exclusive agreement to supply its OEM services to Rivian, another electric vehicle manufacturer. Announced in July last year, the company discussed setting up an installation facility near Rivian’s Normal, Ill., factory and offers the full front PPF for $1,500 and full-body PPF for $4,500, according to its website.
Tesla enthusiast Sawyer Merritt, who built a following on X breaking Tesla news, predicted that once this program is rolled out nationally, “Tesla will likely become the largest car wrap installer in the world almost overnight.”
Some PPF industry insiders disagree that this will have a negative impact on the aftermarket industry. Darrell Reed, commercial director at Eastman Chemical Company, says it’s a positive thing.
“Today in the US less than 10% of new vehicles have PPF installed, and that number is probably closer to 5% than 10,” he says, noting consumer awareness of the product is still low. “Tesla’s move should serve to elevate awareness of PPF and color change wrap categories and should serve as a strong endorsement of our industry. As well, their entry point on pricing reinforces the value of the installation and the products themselves. We see a large runway and upside remaining for these categories and Tesla’s entry should be a positive.”
Time will tell.