If you’ve been paying attention to the news lately, chances are you've probably heard of a company named Tesla Motors. If you were to list some of the main car companies in today’s market, you would probably name the typically big hitters such as Ford, Chevrolet, Toyota, Honda, Dodge and others. However, Tesla is starting to shaking up this oligopoly of car companies.
Founded in 2003, Tesla specializes in the production of Luxury Electric cars, Battery Products and also electric vehicle power train components. The CEO and mastermind behind the company, Elon Musk said that he aims to revolutionize the game by offering affordable, dependable luxury cars that are able to travel impressive distances before needing to be recharged.
In a private invite-only event on March 31, Musk and Tesla Motors previewed their newest electric car, the Model 3. The price for the base Model 3 is set at $35,000. Though mass production is not set to begin until later 2017, for a modest price of $1,000, buyers can reserve a Model 3 before its expected release sometime in 2018. In the first 24 hours of pre-orders Tesla had already received 134,000 down payments for the highly anticipated vehicle. As of this writing, in just over one week, Tesla has received 325,000 pre-orders for the Model 3, with this figure still climbing. Sales from the Model 3 based on current estimates are already expected to exceed a sum of $14Billion US. This one week of pre-orders for the Model 3 makes it the biggest launch of any product ever. While stock prices are not always the best indicator of how a company is preforming, Tesla’s has still been impressive in recent months. In early February, the stock reached a low of around $140. Today, as of this writing, the price has climbed to $257 largely due to the Model 3.
On their website, Tesla states their mission as, “accelerate the world’s transition to sustainable transportation” (Tesla). To keep up with the radical expansion in production, Tesla is already in the process of building massive plants to house the building of the new cars. In Nevada, Tesla is building a plant that they call the ‘gigafactory’ to produce state of the art lithium ion batteries. This plant alone is expected to employ around 6,000 workers. Speaking on the factories Tesla says, “to achieve that goal (the mission), we must produce electric vehicles in sufficient volume to force change in the automobile industry. With a planned production rate of 500,000 cars per year in the latter half of this decade, Tesla alone will require today’s entire worldwide production of lithium ion batteries. The Tesla Gigafactory was born of necessity and will supply enough batteries to support our projected vehicle demand” (Tesla).
Why: Why is all of this important?
Tesla is changing the automobile industry. They are making a dream become reality by producing affordable luxurious electric cars. Though one could make the argument that the big car companies are also already producing similar cars that can travel identical distances, none of these competitors come anywhere close to the quality of Tesla. The safety of Tesla’s vehicles is exceptional. The Model S sedan, which starts at $70,000, has raving reviews when it comes to safety. Autotrader commented on crash test results saying, “Remarkably, the National Highway Traffic Safety Administration (NHTSA) has awarded the Tesla Model Sa 5-star safety rating in every subcategory across its rigorous crash-testing criteria”(Autotrader).
Another knock on Tesla is the steep price for their vehicles. Though it depends on what model your purchase, while the initial upfront cost would be expensive, in the long run the benefits greatly outweigh the cost. Rather than continuously purchasing costly gasoline and paying for numerous repairs as you would on a normal car, there would be no need for gas, and minimum repairs for a Tesla. Customer service is of the utmost importance for Tesla. Rather than going through a dealer as a medium to purchase the car, you go directly to a Tesla outlet. If you have a problem with your vehicle, they either come pick it up to repair it, or while you are sleeping they beam a software update to the cars computer system to fix the error. Tesla also developed autopilot mode. This function allows drivers to set a predetermined destination, and sit back as a passenger while the car does the driving. It can change lanes, brake for itself, keep up with the flow of traffic and even park itself.
Bottom line: Watch this company. In the coming years you will begin to see more and more of the unique Tesla cars everywhere. Affordable electric cars are becoming a reality. Though Tesla is still a relative new comer to the highly competitive automobile industry, and have had a bumpy start at times, they have already been highly successful. This success with only multiply if they are able to push out the Model 3 on time and fulfill high expectations. In the coming years they will become a house hold name, much like Apples iPods and iPhones have in recent years.
