10 Years of Tesla Riding the Green Dream; Rival Automakers See Red
With his wife next to him and kids in tow, Elon Musk had rung the bell at Nasdaq. It was June 29, 2010, as Tesla Inc launched its IPO. The shares were lapped up by the market and everyone was looking for a brighter tomorrow. Musk wanted to engineer that change.
Even as Musk was doing the honors, the Roadster was on display at the Times Square in New York. Selling at $109,000 then, it was the only car that Tesla had launched till then.
The company is no more a one-trick pony. People now want to ride an electric car and contribute their small bit for the environment. That has driven up the value of the company that has now beaten all other automobile companies, barring Toyota. Well, almost!
Little could anyone imagine that an IPO launched at $17/share in 2010 could have a dream run as it has. Electric cars were, then, like a dream and Musk was selling nothing short of a dream. Now hovering around $1000/share, the wealth creation dream has been realized for many.
The second-quarter results from Tesla are due shortly. It will detail the number of units sold and decide how long it would take for it to become the most valued car company in the world.
Tesla vs Toyota
(Comparison of Toyota and Tesla stocks over 10 years)
Surging market value
When the IPO happened, the world was coming out of the financial meltdown. The US Energy Department extended help to Tesla with a $465 million loan. It helped turn the company around and was repaid in three years.
But the announcement that he made after that was more daring. Musk said that he was buying a plant that had been shut down, earlier run by General Motors and Toyota, then the two biggest car companies in the world. That plant was turned into the first of the three plants that Tesla now has.
When Tesla announced the Gigafactory in 2014 with Panasonic as its partner, it showed the ability of the company to create a structure that allowed vertical integration of its supply chain.
Two years later, when Model S was launched it was a challenge for the established brands. It set the ball rolling for more success. Boosting its production was going to be a challenge.
The maverick Musk one day tweeted that he would take Tesla private and offer the shareholders $420 a share, still an incredible return on investment for those who had bought the company during the IPO. He claimed that the funding was in place but fortunately for shareholders, he stepped back a little later. The SEC was not amused, and he was stripped of the post of the Chairman of the company for three years till 2021.
The Gigafactory at Nevada is now profitable and things can only get better from here, as investors are narrowing its gap with Toyota Motors.
Tesla’s car sales
Breakneck speed
Moving at breakneck speed has been the hallmark of Musk and Tesla. Within a year of breaking ground, Tesla and its partner in China were able to begin vehicle deliveries. It was something that none of his competitors could have imagined.
It was critical to grow in the world’s largest automobile market. The speed ensured that Tesla products could be manufactured locally, avoiding the duties to be paid. It could also help grow the market that sold well over a million plug-in electric cars in 2019.
The country sold 25.8 million cars in 2019, despite an 8.2 percent fall against the year before.
The future looks electric. One of Musk’s babies is growing up fast.
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