Electric Cars — How soon and how successful — A Three Part Story
Tesla and the Electronic car — Commentary and Competitor Analysis
The major leaders in the electronic cars industry are chiefly from the petrol and diesel brigade. Ford Motors from said cohort, stated recently, in a statement that revealed some substance to its ambitious corporate strategy, that it was committing $4.5bn to the electronic car development up until 2020. Indeed if Peugeot Renault’s forecast of a 10% share of the car market by the electronic players comes true, the investments should flow thereafter too. Morgan Stanley, an investment bank says 10–15% market share will be realised a little later, by 2025.
Tesla, quoted on the NASDAQ Stock Exchange since 2013 has thus far raised the following:
May 2016 — $1.46bn = Equity
Aug 2015 — $738m = Equity
Feb 2014 — $2bn = Debt
May 2013 — £1.02bn = Debt
Jun 2010 — $226.1m = Equity (Initial Public Offering)
- $5.36bn in total thus far from equity and debt placement but does show a highly volatile stock price performance. Earnings expectations out say, 3 years tend to gyrate disconcertingly from one quarter’s end to another. Daily moves in the stock price can be violent.
By 2014 the market capitalization of Tesla was 50% of that of Ford Motors.
Elon Musk still owns 22% of the equity.
Among other car manufacturers, Volkswagen set a technically fraudulent trend by fitting its cars with software which falsified diesel emissions readings. Fiat Chrysler has also had its own share of (serious) troubles. In March 2017, to date, no compensation of any kind has been offered to VW car owners, many of whom feel cheated by the terrible publicity, some say stigma from owning their new Volkswagen.
Unlike say, printed daily newspapers, automobiles are not undergoing an existential crisis. Year on year sales trends across the planet remain healthy and in the UK, our local economy, inward investment by Nissan (Japanese) and others (468 projects creating some 33,200 jobs) means that there is quite a degree of stability around which can be sustained some future and indeed ongoing electronic experimentations.
It remains my own conviction that the entire project has an overriding chicken and egg issue. Until people notice electric chargers outside their flats, and outside their houses and within all of the petrol stations that they are passing, they will not seek to transact in electronic cars. They may not even open a glossy brochure; if cash flow accelerates, so too will spin and marketing spend.
The confidence of founders and funders is the deciding industry driver. Elon Musk possesses this in spades and has mooted a merger of both his transport businesses (space and electric cars) into one gob-smacking cocktail where (he is convinced) significant operational and technical synergies can be realised. No other industry competitor could muster such a competitive advantage should he pull it off.
Much will rely upon his character and drive as an entrepreneur and as a risk-taker. From reading his biography he is surrounded by some very capable staffers but reading between the lines one can see that it cannot (at times) be easy to work with him and he, but rarely, will take a “no” for an answer.
Electric car market share is currently some 0.85% and driverless cars remain in their infancy and the cars’ projected gross revenues by 2020 are in the region of a median 8.2% of the total, some 1.5m cars in the UK alone It is how there two numbers change and grow that will determine whether it is time to really start dreaming- Driverless cars and space travel — both daily — as the norm.
END of PART THE FIRST