Elon Musk is one of the topmost ambitious entrepreneurs in the world. He is the co-founder of Tesla and SpaceX. Previously he sold Paypal after converting it into a huge success. Both the companies he leads are working on the ideas of changing the world. However, Elon Musk grows Tesla to huge success and we will discuss the success story in this blog.
Beginning of Tesla:
Tesla incorporated by Martin Eberhard and Marc Tarpenning in July 2003. At that time they both fund the company as an engineering project. Elon Musk joins in February 2004 as a chairman of Tesla Board of Directors. Elon Musk didn’t make Tesla from scratch rather it joined short while after the creation. He used the money he got from the sale of Paypal. Musk took Tesla to one of the largest electric car manufacturing company, which previously was only an engineering project.
After his entry as an investor, the Eberhard was put out and he then allowed to represent and lead the company. This is because of the importance of his investment for the company.
Under his leadership the company optimized product and engineering designs, global electric car manufacturing, and other battery and solar energy products.
Tesla comes with the mission of the use of sustainable energy in the world. They convert the electric car idea from remote control cars to a man driven automobile.
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At the start, Tesla produces high-end electric sports cars. They only target a specific niche. But Elon Musk didn’t like to play in one niche only. They then plan to take over the market in 3 steps. Firstly they have to prove their concept to the world that electric energy can be used in cars. So they decided to develop high-performance electric sports cars. This gave proof to the world about their idea. Secondly, they started to capture the market by manufacturing luxury electric cars and came into competition with BMW and Mercedes. Third and last Tesla started making economical electric vehicles for everyone. After watching the success of Tesla many other companies are now manufacturing electric vehicles.
The first release by Tesla was in 2008 named as Roadster. This was an electric sports car and the company sold 13000 units by 2009. They then get a $465 million loan from the government for their phase two of electric car manufacturing. This was a huge success for the company and they then build a four-door sedan Model S car.
Elon Musk’s Tesla was assembling the parts in a small garage behind their dealership. They don’t have a factory to manufacture their parts, body, and batteries. The place Elon Musk was thinking of goes way beyond his financial approach at that time.
Rise of Tesla:
From this onwards, the rise of Tesla started. Tesla shows intentions to file the initial public offering in January 2010. While in May same year Tesla announced a partnership with Toyota in which the company purchased 50 million dollar shares. Both companies agreed on collaboration in the making of parts and vehicles. They also join hands for the development of and production platforms with engineering support. They then cooperated in making an electric version of RAV4. In 2014, just four years after Toyota invested, Toyota and another company took their shares out and made $1Billion combined profit.
After that Tesla faced many ups and downs. This includes falling stocks due to problems in car batteries. However, Tesla comes out of this by providing customer care services and developed a battery protection system. They provide that system free of cost to all Model S users. Tesla targeted to achieve 40,000 unit sales by the end of 2014. However, in November 2014 they changed the target to 33,000 units.
In 2015 Tesla established its first factory in California. The company also started considering collaborating with Chinese for another manufacturing unit in China. Elon Musk clarified that Tesla prefers to manufacture within the US until the local demand of Tesla in the Chinese market rises.
Tesla was also thinking of building a battery manufacturing plant and a factory in India. This will reduce the customs duty on Tesla in Indian markets. India is such a huge market became favorable for Tesla in the future.
In 2015, Tesla achieved the target of 50,000 unit sales by selling 52,000 electric cars. Similarly in 2016, the company exceeded its goal of 80,000 and sold 90,000 vehicles.
After Tesla announced its Model 3, in 2016 they get 325,000 reservations from the customers around the globe. In 2017, a Chinese company Tencent Holdings Ltd purchased shares of worth US$ 1.8 Billion in Tesla.
After that stories of ups and downs started again. In 2018 Elon Musk takes Tesla private and Tesla started trading in Private Stock Market. Then there was a story of Lawsuit on Elon Musk which was settled in a short time. In 2018, Mercedez and BMW were beaten by Tesla in sales.
In 2020 Tesla takes the top position of most valuable American automotive manufacturers. its market capitalization in January 2020 is US$ 86 Billion. Later in the same month, it becomes second as the most valuable automaker in the world. In July 2020 it leaves Toyota behind after reaching a market capitalization of US$ 206Billion. It leaves everyone behind.
Lessons To Learn:
Tesla also working on making solar roofs. Tesla and Elon Musk is taking this world and users to new heights. The strategy Tesla follows is different in many cases.
Tesla presented a unique idea and made everyone to believe in their idea. They achieved their goal by making a high-performance electric sports car for a targeted niche. After they showed the world that electric cars can replace engine cars they then started making luxury cars.
As we all know that once your idea gets accepted by executive class the other classes wish to buy those products. So the time comes when Tesla outsold Mercedez and BMW in sales. This is a huge achievement for a company that introduced a whole new concept of vehicles.
Now Tesla is working on making the vehicles for masses. The company is now in a position to change the vehicle world. Following Tesla, many other companies started manufacturing electric vehicles which gives confidence to the customers to shift to electric technology.
It is the success story of almost 16 years of Tesla.