Tesla is one of the big names in the electric car industry. Despite being such high-end, technologically advanced vehicles, its market cost is at par with many current hybrid cars. Their secret is similar to the growth of IT centers in Silicon Valley and top of the line manufacturing processes.
Its current production line is the Tesla Roadster, with a projected inventory of 2,500 units. After completing this line the company would focus on its new vehicle, the Tesla Model S sedan, with a projected production of 20,000 units in the next year.
The brain trust of the company is lead by Elon Musk. He projects that the new Tesla vehicles would cost $150 million to develop. This is small compared to the big automakers in Detroit and Japan but as a start-up company, it has to be very conservative with its budgeting and schedules are met. This discipline has enticed many investors to take a peek at Tesla’s quarterly reports and hedge their bets with the company.
This regimented system creates value for the long term. According to market analysts at Morgan Stanley, it is projected that the electric cars of various designs and types would be taking 25 percent of total market share by 2025. This is a giant leap from 0.1% market share in 2011 where Tesla captured one tenth of that market share. Because of these changes, the stock price value of Tesla would jump to $135 per share from the current $57 per share. On the other end, Tesla could eventually go belly up despite an available cash flow of $662 million.
Despite the possible outcomes Tesla is projecting growth in the coming decade. The company’s current value is at $3 billion, five times the estimated revenue for the company in 2012. To keep afloat, Tesla needs to expand its portfolio from just its must coveted Roadster. In the long run, the electric car must become the staple in the current car market.
The future is wide open for Tesla despite the world’s giant car makers getting in on their piece of the action. With the Roadster and the Model S sedan, the company and its leadership is expected to lead the way in the electric car revolution.