Tesla is an automobile company that is a major leader in the construction of electrical vehicles (EVs) and has recently reached a market value of US $ 1 trillion or RM4.15 trillion.
The achievement saw Tesla successfully position itself among large market industries such as owner Google Alphabet Inc, software giant Microsoft Corp, iPhone maker Apple Inc, e-commerce site Amazon.com Inc, social media giant Facebook Inc and Saudi Arabian oil giant Aramco.
Tesla’s journey to achieve the status of a world giant with trillions of dollars in revenue is not an easy one. In 2016, Elon Musk once tried to meet Apple CEO Tim Cook to explore the possibility of the iPhone company acquiring Tesla but Cook turned down the call.
Tesla shares have been declining since May 2019 when it hovered around US $ 36 but have now risen 28.6 -fold.
If you invested US $ 35,000 into Tesla 2 and a half years ago it would increase to US $ 1 million today.
It was an impressive achievement in the world of EV deck cheap capital availability and the disruptive automotive industry after the 2008 global financial crisis has driven Tesla to its current level.
In other words it is in the right place at the right time.
According to Morgan Stanley, investors are now more geared towards climate change-themed sustainable investments after the Covid-19 pandemic crisis that hit the world.
In this case, Tesla positions itself as a technology player in the clean energy sector as opposed to an automobile company. As a result, they exploited the situation and actively developed EVs such as Amazon which once used the book market as a stepping stone to become a trading center that "owns it all".
According to Gene Munster, veteran Apple analysts found Tesla’s ability to dominate gross margins like the iPhone and build an ecosystem like Apple has been the secret of the company’s success. He added that in 3 to 5 years, Tesla will probably reach a gross margin of 40% like Apple.
Tesla’s choice to sell its products directly through its international network and company -owned exhibition galleries around the world has helped the company keep costs low and ensure high margins. Tesla also focuses on traditional advertising spending and relies solely on word of mouth so they have more money that can be devoted to development and research (R&D). Last year saw them invest US $ 2,984 in R&D alone and spend almost nothing on advertising.
Tesla has also been known for its camera and sensor -powered Autopilot "driver assistance" function in its advanced models for nearly three years but the system has been embroiled in controversy over adaptive navigation that steers, brakes and accelerates on its own.
Meanwhile, Tesla's competition looks challenging with Volkswagen now having many selling EV models around the world, GM, Ford and Mercedes-Benz Daimler AG also doubled their EV strategies and introduced new models while Toyota which previously only focused on hybrid models has shown the transition signal to the electric battery model.
Over the past decade, Musk has managed to sell affordable EVs of nearly a million cars in the past 12 months and now he must focus on the long -term goal of selling 20 million cars a year and earning over 25% revenue from businesses other than EVs.
A cheaper mass-market model priced at US $ 25,000 with a choice of more sophisticated Autopilot software or FSD hardware and software will be available on the streets by early 2024.
The market is confident that Musk can do it. It promises a fairly exciting journey for Tesla investors.
