So on my last blog post, I might have been a little harsh in criticizing Tesla. I’m always the first one to admit when I’m wrong, and I have to give the automaker props for achieving success in an extremely competitive market. In my defense though, I did say that 2013 would be a ‘make or break’ year for them, and I’m leaning toward this year being a ‘make’ year for Tesla.
There are three really good reasons why Tesla deserves kudos for a job well done, aside from the obvious, which is to say that not many car ‘start-ups’ historically have even survived as long as Tesla has. First off, they have managed to make a really good car, even if you ignore the fact that the model S represents a total deviation from the norm since it does not run on an internal combustion engine. Consumer Reports gave the model S a 99 out of a 100 score, which is incredibly difficult. It also won Motor Trend magazine’s 2013 car of the year award. And if you have ever seen one up close, you can tell right away that the body lines are sleek and streamlined, and that it’s obviously a luxury sedan, and looks very well made.
The second thing that Tesla has done right is living up to it’s corporate guidance, in other words, when the company says it will produce 2,000 cars a month, pay back the Department of Energy loan early and achieve profitability, and then actually does those things, it’s no wonder the company stock has more than doubled this year. Investors like companies that do what they say they are going to do, because it makes them feel more secure about their investment, and it’s not easy to accurately predict the future, but not impossible if the company is managed well. But the third thing that Tesla has going for it is the smart entrepreneur that’s leading the charge. CEO Elon Musk is obviously no dummy, and I find it interesting that in all the recent accolades given to Tesla and what the company has been doing right, I don’t always hear that the guy in charge is largely in part the reason for the company’s success.
It’s sad that other companies like Coda Automotive have failed, and Nissan hasn’t quite lived up to its expectations in Leaf sales, but love it or hate it, the electric car is not going away. It still comes down to the cost of batteries in my opinion, which is partly why I think Tesla has done well. They didn’t bother trying to produce a low-end car that ultimately would have been too expensive anyway (because batteries just aren’t cheap), which is what Coda did. Instead, they made a really nice car to compete with the luxury sedan market, and have actually outsold the Mercedes S class and BMW 7 series models. Yes, they’re still a small fish in a big pond, but you know what, I think they’re doing pretty good with all things considered.