Tesla: The Business that is Changing the World

It was an era where government legislation held on tight to their ties with the oil and auto industries. In California, GM fought tooth and nail against the Air Resources Board, specifically their ZEV (Zero Emission Vehicle) program. GM’s argument? They thought there was no market for the genre of alternative energy vehicles.

Meanwhile, gas-guzzling SUVs continued to be subsidized with tax breaks and rebates by both (a) the auto industry and (b) our own government. SUVs, despite their size, were one of the most economical price points for American consumers. GM claimed that the price point of a Zero Emission Vehicle would estrange the middle and lower classes from having affordable vehicles. GM’s Vice President for Environmental Affairs, Dennis Minano, claimed that tiny electric cars would ultimately max out at “25 miles per hour,” and did not belong on the road with giant SUVs “like Explorers, Excursions, [and] Lexuses.”

And now, a drumroll please (cue for Elon Musk and Tesla Motors to step on-stage to the auto business).

Tesla Roadster Medium PhotoElon Musk knocked the mainstream automotive industry on their heels with the release of the famous Tesla Roadster. The Roadster threw out the convention that an electric vehicle could only be an ‘awkward middle-schooler with braces’ vehicle. The Tesla Roadster could go from 0 – 60 in less than 4 seconds, had a chassis created by Lotus Engineering, and a range of 240 miles.

Tesla debuted the very first fleet of sleek, sexy electric vehicles. At the helm, Elon Musk replicated the successful business model of Henry Ford with the following levels:

Step 1 – First, produce a few elite, prestigious vehicles with a high price tag (to fuel your R&D).

Step 2 – Once that science has been narrowed down to an art form, you can then go to a higher level of production and deliver more cars to more people (at a lower cost to both the manufacturer and the consumer).

Step 3 – Last, you can develop a car for the masses. As production prices have gone down and the cars have been tested by time, you can produce a mid-range car that the average American can afford.

Since the Tesla Roadster was the first level of this business model, level two would be dubbed the Tesla S. Although a four door Sudan, the S still had the acceleration of a sports car. After a few updates, the Tesla S was able to reach speeds of 60 miles per hour in 3.2 second – otherwise known as the fastest four door car ever made!

Tesla X SUV with Falcon Wing DoorsBefore moving to the third level (mass-production of affordable automobiles), Tesla also introduced a SUV to their fleet: the Model X, complete with their signature Falcon Wing Doors. Not only does the Tesla X crossover have a range of 257 miles per charge, it has the highest safest ratings of all SUVs. As is consistent with the entire fleet of Tesla vehicles, even the X can achieve 60 miles per hour in 3.2 seconds.

Now, the world is waiting for what Elon Musk has promised since the beginning: a mass-produced affordable electric car that looks as luxurious as its’ siblings. Slated for production and release in late 2017, currently over 40,000 enthusiasts have placed $1,000 down payments on the new Tesla Model 3.

The Model 3 has a price tag of approximately $35,000, but savings continue for years to come. Little known to the public is the fact that Tesla’s electric engine has about 12 moving parts. This is vastly different from regular cars, which have hundreds of moving pieces that could cause a plethora of malfunctions. In layman terms, less parts = less money spent on car repairs. As an electric vehicle, oil changes (and repairs like new spark plugs) are not needed. In addition to not paying for gasoline, Tesla has set up free charging stations across the globe!

In layman terms, less parts = less money spent on car repairs.

Tesla charging stations are scattered across the country – and the world – and are powered by solar energy. To top it off (pun intended), Tesla owners can charge their cars for free. Check out a map of the Supercharger stations on Tesla’s website. Essentially, Elon and his team have brilliantly mapped out stations as if you were to take a cross-country road trip. Tesla Motors staked spots to charge your car exactly where you would need it.

Just like all new technologies, products start at enormous prices and can only be afforded by a small ratio of the public (think cell phones and laptops). However, over time, this profit is funneled into research and development. The end result is the ability to mass-produce an improved product for a fraction of the original price. It is only a matter of time before Tesla vehicles become mainstream – and other car companies will have to learn how to reconstruct their business models to keep up.

If you want to read more about how Tesla Motors is changing the world, check out our article called SolarCity + Tesla = Solar System.

 Disclaimer: We are not affiliated with Tesla Motors, nor do we receive any incentives writing about this company. We are publicizing this information for free because we believe in companies like Tesla Motors (and their strive for creating new technologies for the future of humankind).

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