It's been a decade since Tesla became public and offered an investment opportunity to anyone who believed in their growth. For the business to be successful, Elon knew it would have to master a handful of criteria before any traction could be achieved. Now in 2020, we can evaluate these criteria and understand why Tesla is booming!
We all know Elon's ultimate goal...apart from colonising Mars and all
"Accelerate the transition to sustainable energy"
This represents the crowning achievement of the company, though it has a few constituent parts to conquer first
It's only when Tesla achieves the following, will the company begin to change the world and start to define a future that is in the interest of the environment - as it should be!
The company are pretty much achieving these already, now it's about improving them as technology develops and public interest increases
Let's get on!
Make it Compelling
Although the intentions of the company are so well-founded and are even quite heart-warming, we are still part of an economy
A product that exists within any economy must have the interest of the consumer and so it must... MUST be compelling enough to buy
Unfortunately for Tesla in the early years, the Electric Vehicle (EV) received such a bad wrap that most of the customer base dismissed it. There was even a time where EV's were called ' golf buggies' or just a vehicle powered by laptop batteries (referring to the lithium-ion batteries in the powertrain)
Tesla's first move had to be a bold one, they had the idea to produce the Roadster which flag shipped as their sports performance vehicle and their first stab at changing opinions!
Tesla's Roadster was significant, it absolutely decimated the negative perception of an electric vehicle
It was produced to show the world what an EV could really do, in doing this... it caught everyone's attention
It was the exact type of disruption Tesla relied upon to have all eyes upon them. On top of this, the Roadster provided a great source of income for future projects
Now, we're talking about the Roadster 2008-2012 production model. The new 2021 model is.. as you'd expect, a giant step up from the first one
Tesla produced 500 of these early models per year, at the time this was pretty much the company at full output capacity. Luckily, the consumer went mad for it due to its 200 - 250 mile range and 0-60 mph in under 6 seconds!
Now that all eyes were on Tesla and electric vehicles in general, the company diversified into producing the Model S/X then onto the Model 3/Y along with improvements to their welcomed sports car!
Thanks to the Economy of Scale principle, Tesla has teased us with a new low price, high volume compact vehicle whose announcement is imminent
While we're here, of course we can show you the 2021 Roadster - it's fricking HOT!
After reading this and knowing all you do about EV's, do you feel compelled into finding out more? if yes, you're in the growing majority of the consumer base - the mood has really shifted in favour of the EV!
if you're not, the 2021 roaster is designed to go from 0-60mph in 1.9 seconds with a range of 620 miles
It's worth checking out the Model S/E/X/Y vehicles for the more affordable versions and yes that spells out 'Sexy' because of course, Elon would do that
Make it Affordable
Let's jump back to the ' being part of an economy ' for a moment
A product needs to be compelling enough to buy, but of course coupled with that it must be affordable to your market
The market in Tesla's opinion is anyone who's interested in buying a car, this can be further broken down into a kind of 'tier' system
Below is a depiction of Elon's original plan ( it's changed a bit now with the introduction of the Y and a whispering suspicion of a new compact low priced vehicle ) but the principle remains
Tesla has gone from left to right, starting with the higher price and ending with the lower. The reason for this is that they want to benefit from this Economy of Scale principle
The predecessor vehicle has pretty much paid for the successor vehicle in this respect, it's a great tactic and as of 2020 it's really paying off
Here are some rough guides to price although do note these can differ widely depending on whether you get an extended range.. which model release it is or other 'add-ons'
These are rough figures and just account for the basic idea of what the prices are/can be
From this though, we can see they are covering all bases and there's a reason for this. Tesla would like the EV to be the dominant form of transport. By which we mean, they'd like there to be more electric vehicles on the road than there are internal combustion vehicles
This will proffer a sizeable impact on our emission profile as a global community and it's a big chunk of the ' accelerate to sustainable energy ' mission
For this part of that mission, EV's need to be affordable to the population - at all levels of income, hence the master plan!
One fantastic thing we can trust with Tesla is that they will likely lower prices over time so more people can buy their products, they are honest in their intention and aren't keen on 'rinsing' people of their hard-earned cash!
Additionally, they can afford to lower prices due to the rapid improvement in engineering but also because they make money in a variety in ways so don't need to depend on vehicle sales alone
Remember these guys are vertically integrated (meaning they own most of their supply and development chain) and they are only going to become even more integrated with avenues like Tesla insurance, software updates and autonomous driving
There will be a time in the near future when the general public will understand a version of Tesla to be super affordable. A funny thing is, it's unlikely there will be a huge 'second-hand market ' for Tesla vehicles due to their inherent value, but we will cross that bridge later on!
Make it Safe
Whatever your knowledge on vehicle safety, Tesla has taken home some serious medals in this arena
All Tesla cars have fantastic safety ratings, just as an example take the Tesla Model 3 which is our high volume model ( the one that is used by most )
The Tesla Model 3 broke the NHTSA (National Highway Traffic Safety Administration) record for safety performance
It was literally the best car they had ever tested, Elon made a promise during the release of the Model 3 that it would not only achieve a 5-star safety rating overall...but in every constituent category, and it did!
The full press release of this is here
This standard of achievement is near consistent throughout all Tesla models, in Europe the Model X earned another 5-star rating across the board from the NCAP (The European New Car Assessment Programme)
In addition to the vehicle construction being safe, Tesla is investing heavily in safety with regard to different aspects of the vehicle
Tesla is introducing their own insurance company for their fleet and as I'm sure you know, they are introducing autonomous driving at a level that is far ahead of any other companies vision
Autonomous driving is always a touchy subject but in short, it's a 'brain' that reacts far quicker than a human one with infinitely more sensory inputs. Understandably it's hard to trust a system like this but that's just the sceptical human within us!
The Tesla fleet is fantastically safe as it is. Yet there remain areas for improvement in realms we would never have thought about 10 or 20 years ago, full self-driving being the most mind-boggling one
Give it Value
Vehicles are interesting in and of themselves, we spend money to maintain them, to insure them and even to fuel them on our route to work... on our route to earn money, we spend money on them
Tesla is introducing a new approach, a new 'value' that is impossible to ignore
As they are, cars are expensive to keep running and they don't really provide much more than a means of transport. They can be comfy, look good and offer 'some' gadgets I suppose
Elon would like to provide more value though, he does this in a few unique ways of which all are compelling!
The Supercharger network, imagine if your new fuel source is now significantly cheaper than ever before
I remember a time where sceptics chased the idea that even if the price was better ( and it really is ), you would never find a charger
But now the Supercharger network is here, your affordable fuel can be provided almost everywhere!
The plug-in charging method whether home or away is more affordable than fuel, it's unbeatable and if you're a part of the SolarCity community ( i.e you have a Tesla solar panel array ) you're laughing!
Entertainment is a massive part of our culture these days, it exists almost anywhere it 'can' exist. One of the 'bells and whistles' featured in a Tesla vehicle is a big inviting touch screen!
Aside from the obvious advantage of a navigation assistant, this is your portal into your vehicle. From here, you control many of the key aspects for the car
Pretty much if you picture a combustion car with a cabin full of buttons, all of those 'buttons' now exist within this interface, on top of that is a spanking new and continuously developing entertainment system that updates...over the air!
It updates just as your phone updates, when something new is ready...download and go
Whether your entertainment needs are music, movie or game-oriented this flashy innovation can teleport you straight through
Let's talk robots!
Here's a whacky idea, imagine if your car could make you money
I'm not talking about using it for Uber or Lyft, because in that scenario.. you're still investing your time to produce an income
You probably know where I'm going with this, the RoboTaxi is one of Elon's most optimistic and exciting ideas yet and the idea is this
Imagine if your car could go out and provide a taxi service ( just like uber does ) but you don't need to be driving it, it drives itself
This is genuinely in the foreseeable future, the full self-driving package that Tesla strives for will enable this feature, and my my what a feature!
Understandably, this is a super ambitious goal. It's one that we all look forward to but we'll have to give it time to develop and it'll certainly need some troubleshooting in its early stages
Although there are so many other points of value, the ones mentioned are the most notable. These vehicles are valuable in their own right since they depreciate at a far slower rate than combustion vehicles
This is because the car isn't the only 'product' you get when you buy one, it's just a base for which to build more value.. should you choose
There we have it, 4 criteria for a product to change the way we live!
Do you think Elon has done well to convince the world that the EV is superior to the combustion engine vehicle? By no means does he want to be rid of the cars we have today, he'd just like them to be for pleasure rather than daily use
Thanks for reading