Tesla Extremely Successful?

The auto industry tries and is normally successful at rejecting any business start up of an electric car. However, the Tesla is the first company that has made enough noise to have an impact in the auto industry. It was almost unheard of for a large car company succeed with an electric car. Stocks have sky rocketed and the company appears to be doing well. They plan to be selling 250,000 cars just in the US per year and 500,000 worldwide. The Tesla company seems to think they have been successful in the advertising and expect to sell and continue the hype. 

Running a car company is very expensive. The company needs to meet goals of selling cars to be able to keep business. However, Tesla got their factory almost for free from Toyota. This deal also included machinery, molding facilities, and a full paint shop. With the basics covered, Tesla’s costs were way less than other start up companies. Maybe this is part of the reason they will succeed apart from other electric car start up companies. Money is always a factor. However, in the future, expanding will not be free. Tesla needs to be successful and make money to build this company down the road. 

According to the article, Tesla is providing free electricity for life to customers. If Tesla becomes as successful as they are hoping, will they continue the electricity for free or start charging for it? It is interesting that they would have free electricity for life anyway. It is a great selling point now, but for life, is a pretty great promise. If Tesla does expand successfully, many people will expect free electricity for their cars for life. That is a large responsibility for Tesla to take on. As the article explains, the cost adds up. If they do not sell enough cars, they will have to pay for their customers. For a lifetime commitment, they must expect to be very successful. 

 

http://www.autoweek.com/article/20140403/CARNEWS/140329864

 

 

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