Grand Plans Are On The Road Ahead With Tesla

Electric Car Companies
Electric Car Companies

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.

The Innovator of Electric Cars

Tesla Motors
Tesla Motors

One of the most groundbreaking vehicles on the road today comes from Tesla Motors. Taking their name from Nikola Tesla, this car-manufacturing firm created the first commercially viable production electric car.

The man moving Tesla Motors into the electric car revolution, is Elon Musk. He is the co-founder and head of product design for the company. His best contribution to date is inarguably the Tesla Roadster. To make this cutting edge technology, this visionary’s history contributed to realizing his vision of changing the world.

Born in the United States of South African and Canadian parents, he bought his first computer at age of 10, that he taught himself to program. At 12, he sold his first commercial software, a game called blaster for $500. After completing his early studies in Pretoria, South Africa, he went to the United States to avoid mandatory military service. He justified his move by saying, “I don’t have an issue with serving in the military per se, but serving in the South African Army suppressing black people just didn’t seem like a really good way to spend time.”

Musk said that he chose the United States because “it is where great things are possible.” He first went to Canada, to his mother’s hometown of Regina, Saskatchewan, when he landed a scholarship to study business and physics at the University of Pennsylvania Wharton School. He obtained his first undergraduate degree in business and the next year his physics degree. He then went to Stanford for the graduate program in applied physics and materials science but dropped out after two days.

His first foray into commercial success was the creation of Zip2, an online content publishing software for news organizations. He created this business with his brother Kimbal Musk, where it was later purchased for U.S.$307 million in cash and U.S.$34 million in stock options to Compaq’s AltaVista. The proceeds from this sale were used to create X.com, the first online financial services and e-mail payment company, this later expanded to Paypal.com. The company was later brought by eBay for U.S.$1.5 billion on stock.

Despite his success, he still had in his mind the creation of a commercially viable electric car. His main reason he went to Stanford was to create ultracapacitors that would be able to energy to power an electric car. He was initially diverted into other business interests but he kept coming back to Tesla Motors. During the 2008 financial crisis, he provided the funding to keep the company afloat.

The gem in the Tesla Motors showroom is still the Tesla Roadster. His company has been able to deliver 1800 vehicles to over 30 countries. It is now deep in development for its first four door Model S Sedan and has recently unveiled its plans to produce the Model X, specifically for the SUV/Minivan market.

Aside from creating its own vehicle line, Tesla Motors has existing partnerships to create electric power train systems for Daimler for its Smart EV and Mercedes A Class line. Also in its fold is Toyota, where Tesla would create power trains for the first fully electric RAV 4.

Musk’s work on electric cars has been compared to Henry Ford in the early automobile era. The advances spearheaded by Musk on electric power trains has become the market standard and his high end Roadster is still considered the top of the line electric vehicle in its class. He is now in the midst of making the electric vehicle affordable to the common person. Elon Musk is a true electric car innovator, probably the best of his generation.