The time was not far off when Tesla caused a mockery. Now, there’s almost no doubt: the electric car rioter is THE big success of the Musk galaxy. In any case, the one whose results can be measured, since it is listed on the stock exchange, which is not the case with SpaceX.
Thanks also to Tesla that Elon Musk became the richest man in the world, and he is now capable of Twitter. Given its stratospheric market capitalization ($ 940 billion as of May 4), the exotic entrepreneur raised $ 8.5 billion by selling 0.9% of its capital, while maintaining nearly 16%.
The numbers speak for themselves. Sales of the Model S, 3, X and Y have continued to climb in recent years: they reached nearly a million units last year, merging Tesla, and so far, in the first step of the podium of electric car manufacturer in the world, despite growing supply.
But most of all its revenue statement makes most of its competitors green with envy. Founded in 2003, the American company has long been in the red: it accumulated losses and swallowed billions of dollars until 2019. But since 2020, the trend has been reversed, and in an amazing way: Tesla has developed of 5.5 billion in net income and 12% operating profitability in 2021, and up to 3.3 billion and 19.2% in the first quarter of this year. By the end of March, its debt had fallen almost to zero.
The holy circle has already begun: these good results have pushed the stock market price into the galaxy, allowing the company to raise capital virtually free of charge. Even its fiercest detractors recognize that Tesla has become a true automaker.
It’s really more than that. At Tesla, the billionaire cowboy literally changed the automobile industry. Not just by showing that there is a market for electric cars, thanks to “sexy” cars, that attracted a group of absolute “fans”. Elon Musk was also the first to imagine cars around a central software architecture, allowing remote updating, and unparalleled ergonomics. “Tesla spends three times more than other manufacturers on R&D,” recalls Michael Valentin, associate director at Opeo, a consulting firm that specializes in industrial innovation.
Innovation at all levels
Tesla innovated everywhere. The manufacturer provides dealers, which saves money on distribution and constantly interacts with its customers. It has invested in its own billing network, removing barriers to purchase. “They are also more integrated than other players in the sector, which allows them to be more agile,” the expert continued. From battery manufacture to related services, Tesla has integrated the entire automotive value chain.
The revolution also attacked factories. Thanks to its giant engines or more advanced automation, Tesla works faster, and at a lower cost, than its competitors. “In addition, because the range is so small, with so few options, the effects of size come out,” explains Philippe Houchois, analyst at Jefferies. “In fact, they are always ahead of everyone …”, the analyst added.
How far will Tesla go? The goals presented by Elon Musk suddenly no longer seem strange: he aims at 10 million sales in the medium term, the level of the current number one Toyota in the world, and even 20 million in 10 years. A quarter of current car sales on the planet! Many are now saying that with Elon Musk, everything is possible …
Until now, through perseverance, the businessman who inspired Iron Man has always achieved his goals. Tesla’s dark sides, such as recurring quality problems, lawsuits launched in California for discrimination or the disturbing transfer of senior executives don’t seem to have compromised the manufacturer’s reckless dynamics.
“Maybe he’ll get a market share of 10% or 20%,” Philippe Houchois said. On one condition, however, the analyst added: “Motorists have to agree to have the same car as their neighbor, quite similar to Apple’s iPhone: this is not the case with the car”. Elon Musk, however, is unlikely to be a revolution.