What is Tesla? How Tesla Changed the Entire Automobile Industry?
What Is Tesla?
Tesla Motors, one of the biggest names in the automobile industry, is an American electric car manufacturer. The company was founded by Martin Eberhard and Marc Tarpenning in 2003 and was named after Serbian American inventor Nikola Tesla.
The initial funding was majorly led by Elon Musk, the third member of the company. Now, he is the main face behind Tesla Motors and the CEO since 2008. The company is currently the best selling plug-in and battery electric car manufacturer in the world. It now exports its models to over 30 countries.
Tesla Inc started its stint with the Roadster model in 2008. The company aimed to commercialise the usage of electric vehicles and make people move towards a greener path. It was built from the bodyshell of a Lotus Elise and came with a range of more than 245 miles (390 kilometres). The Tesla Roadster delivered up to 288 horsepower and could do the 0-100 sprint in just 3.8 seconds.
The model S was launched in 2012 for a much affordable price. It was a five-door luxury sedan and came in many variants. Its latest long-range variant offers a range of more than 647 kilometres.
In 2015, Tesla launched the Model X, its mid-sized electric SUV offering. By this time, Tesla also launched its Autopilot driving assistance system. It came with the Model S as well as the model X.
The Tesla Model 3 is the best selling electric car from the manufacturer, since its launch in 2017. It faces a high waiting period in most of the countries sold. In just a week of it being unveiled, more than 3 lakh reservations were made for it. The base variant of the Model 3 is available for as low as 37,990 dollars. Finally in 2020, Tesla launched its Model Y.
Over the past decade, Tesla has grown substantially in terms of market share and revenue. It now generates annual revenue of over 20 million dollars. After tapping into many foreign markets, the American giant is eyeing the Indian market. Tesla’s first offering in India, Model 3, will be bought through the CBU (completely built unit) route i.e. it will be fully imported. Its prices are expected to be upwards of Rs 60 lakh. However, the government is expected to offer certain incentives and rebates on it. Once it receives a good response, Tesla might move to local manufacturing to further reduce prices.
The Tesla brand has decided to add to a prospective buyer’s choices by entering the Indian market. The Tesla brand is well-known for its Tesla Cybertruck, Tesla Model 3, Tesla Model S, Tesla Model X, Tesla Model Y cars majorly. The first offering from the Tesla brand is likely to tug it out in the Pickup Trucks segment.
What Makes Tesla's Business Model Different?
The company has the mission, “to accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible.” This mission is the backbone of Tesla’s successful business model.
Tesla took a unique approach to establishing itself in the market. Instead of trying to build a relatively affordable car that it could mass produce and market, it took the opposite approach, focusing instead on creating a compelling car that would create a demand for electric vehicles.
Tesla’s business model is based on a three-pronged approach to selling, servicing, and charging its electric vehicles.
Unlike other car manufacturers who sell through franchised dealerships, Tesla sells directly to consumers. It has created an international network of company-owned showrooms and galleries, mostly in urban centers.
By owning the sales channel, Tesla believes it can gain an advantage in the speed of its product development. More importantly, it creates a better customer buying experience.
In some areas, Tesla employs what it calls Tesla Rangers – mobile technicians who make house calls. In some cases, the service is delivered remotely. The Model S can wirelessly upload data, so technicians can view and fix some problems without ever physically touching the car.
Tesla has created its own network of "supercharger stations" where drivers can charge their Tesla vehicles in about 30 minutes for free. The purpose, of course, is to speed up the rate of adoption of electric cars by making it cheaper and easier to keep them running.
Is Tesla a Tech Company?
Many financial analysts and investors see Tesla as a technology company rather than a car company. At least, that's how they justified the growth of its stock price starting in 2013, when it shot up by more than 300% within a single year.
Publications scrambled to find similarities between Tesla and companies from the technology sector, which had similar growth rates. There are several points of similarity between Tesla and the tech sector. Tesla has embraced the disruption credo of the tech sector. Much like other tech companies, Tesla is intent on changing existing business models within the stodgy automotive industry by selling directly to consumers. Its product pipeline and founder evoke a loyal following similar to those for iconic tech companies such as Apple.
And investors in Tesla, like investors in many technology companies, stayed patient through a long period of quarterly losses.
Tesla did not invent the electric car or even the luxury electric car. But Tesla did invent a successful business model for bringing compelling electric cars to the market.
Today, Tesla builds not only all-electric vehicles but also infinitely scalable clean energy generation and storage products. Tesla believes the faster the world stops relying on fossil fuels and moves towards a zero-emission future, the better.
Tesla continues to make products accessible and affordable to more and more people, ultimately accelerating the advent of clean transport and clean energy production. Electric cars, batteries, and renewable energy generation and storage already exist independently, but when combined, they become even more powerful – that’s the future we want.
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