Tesla Motors has great future, but only in a couple of years
Published October 14, 2012
Tesla Motors is a pioneer in the electric car manufacturing sector. They were the first to put a fully electric sports car on the market, followed by an electric sedan and a SUV, a couple of years later. Tesla had a huge success with its innovations in electric vehicle technology and they hope they will soon start to reap the fruits of it in a commercial sense.
For now though, Tesla Motors still can’t be considered a car maker of a large format that can turn huge profits. That can sound a little bit surprising, having in mind that the vehicles they sell are somewhat luxurious and very pricey. The prices range from $57,400 for the Model S, up to $109,000 for the Roadster. You would think that this should bring more than enough revenue for the company, but they are yet to become profitable. However, that’s not to say that they are not offering a quality product or that there is not enough demand.
The fact that it’s expected for Tesla to turn profit not sooner than 2013 is due to a couple of reasons. For one, there are the huge production costs for that kind of vehicles. Then there is the fact that they are still a small-sized company, capable of making only about 5.000 units a year. Nevertheless, they are hoping to be able to produce 20.000 units as of 2013.
Another factor relevant to the success or failure of Tesla Motors is the competition. Although Tesla can offer a superior technology, other well established manufacturers have a lot better production capacities and can produce far more vehicles. They have also worked very hard on promoting their brands for decades, while Tesla is still pretty much in a developing phase and people still don’t associate with them very easy. What’s more, companies such as BMW, Toyota, Honda or Ford offer vehicles at slightly lower prices than Tesla, which is another competitive advantage over them.
Speaking of comparison between Tesla and their competitors, there are some similarities there. They too were forced to recall a batch of their cars. The model in question is the Roadster. It happened in 2010 and it was due to a flawed cable, that could cause a small fire, according to the manufacturer. That forced Tesla to recall 439 cars.
Taking everything into consideration, I think it’s still safe to say that Tesla Motors has a bright future ahead of it. They just need to be persistent in their pursuit of green technology perfection and hope that consumers will recognize their dedication to providing environmentally friendly vehicles with high performances.
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