April 21, 2024

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Is Tesla FINALLY Ready to make a Major Market Push?


There’s no doubt about it, Elon Musk knows how to make the news. For a PR guy, he’s a goldmine. A savvy CEO with interesting ideas, a sharp perspective, and a willingness to say things that will definitely see print. Recently, the head of Tesla Motors sent a letter to shareholders that contained this nugget of fresh-pressed PR gold:

Processed ore from mines will enter by railcar on one side and finished battery packs will exit on the other.”

That, in part, was how Musk described the construction of a battery plant Tesla and Panasonic are working on together in Nevada. That factory is intended to be the first of several, the same size or bigger, which Musk has said will be the key to delivering the electric car to the masses. Like the original automotive innovator, Henry Ford, Musk believes that mass production of his unique product will allow him to bring down the prices of his vehicles to levels consumers can manage.

However, the move puts Musk at odds with most other carmakers, including Ford. Nearly all automakers have gone to a system of using parts made by other companies and simply assembling them at branded plants. Musk has gone on record as saying he does not believe this outsourcing actually reduces costs. Particularly when you are doing something nobody else seems to think can work.

It’s an interesting approach for a company that has, in the past year, essentially not gained much ground. Sure, Tesla nearly doubled its second-quarter profit this year, but it also doubled its second-quarter net loss. That dichotomy would be getting more traction in the press but for one unavoidable fact – Musk is predicting his plants will be able to deliver more than 100,000 cars per year as soon as 2015.

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That number has excited investors and, perhaps more importantly, is delighting would-be Tesla owners who have been waiting years to be able to afford the Car Of The Future. Even with the high price tag, demand has remained even higher, and Tesla is hoping to ride that anticipatory PR all the way to market segment domination.