2017: The Year Of The Tesla
Also Check: Tesla Looks At Prague For Gigafactory 2
When Elon Musk created Tesla, he promised to change the world. His aim was to create beautiful cars that were as easy on the environment as they were on the eye, whilst turning a profit and pleasing the shareholders at the same time. He risked everything he’d worked for and invested everything he had in the company he truly believed could change the world. What he created was probably beyond his own expectations, yet his job is far from complete.
Whilst he has succeeded in revolutionizing the electric car industry, he hasn’t quite made the significant impact on the world that he desires. He has, it has to be said, created extremely cool cars that set new records for quality and performance, and built an extremely loyal fanbase along the way. He didn’t do it all alone as he did get a lot of funding from subsidies, but he did invest almost all of his own money into the company and risked everything he’d worked for to make the company successful.
The biggest question now is whether they can keep up the pace. Musk and his team created beautiful cars that are efficient, fast and seriously cool. Not only are they cool, but they are good for the environment and extremely reliable. The biggest problem that Elon Musk and Tesla have been facing is capacity; they can’t get the cars off the production line quick enough to satisfy their salivating fans. And if they can’t sell the cars, the fanbase will soon dissipate. 2017 could be a pivotal year for Tesla and it could be hit or miss for the company. They need to cement their dominant position as the top-dogs in not only the electric car industry, but the auto industry overall. If they fail, they could be passed by other daring entrepreneurs who’d seen what could be done. Not only are startups seeing the potential in electric cars but the big, traditional automobile companies are starting to create their own challengers; and they have the capacity to churn out as many cars as they please.
The key to their success is avoiding negative press, improving the technology, making their cars more accessible to the average family and fending off growing competitions from startups and the bigger companies. Can they do it? 2017 may be the year that tells us.
Elon Musk has proven to be a man that thrives on pressure. His other ventures are also on the line with SpaceX returning to flight in January and Solar City merging with Tesla at a time when many believe it might be a bad idea. He was recently appointed to Donald Trump’s advisory board and he has spoken of plans to dig tunnels and build hyperloops; has he bitten off more than he can chew? The real problem is that Musk isn’t so great and meeting deadlines and this could cost him.
The original plan to make Tesla unlock its potential was to create luxury electric cars that generate revenue and reputation. The revenue would allow Tesla to create cars that would be affordable and open to the masses. This is the part that we have reached in 2017. The Model S and the Model X were successes in their own right, with the Model S achieving stellar reviews all over the world. He originally wanted a Model E and a Model Y to make his range of cars spell SEXY, but the model 3 would have to do for legal reasons. The Model 3 will cost $35,000 at a starting price he already took 400,000 pre-orders, so he needs to follow through. This is the goal; to create electric cars for the masses and reduce the fossil fuel impact on the environment. The problem isn’t selling the cars; it’s making them.
“Delivering a brand new electric vehicle built from scratch is not an easy task to accomplish. They need to learn about volume production, and test new capabilities and functions.” – Raj Rajkumar – Carnegie Mellon University.
2016 saw Tesla double its car production and deliver around 100,000 vehicles. The aim is to get that figure to a million by the close of the decade, although Musk now claims he can do it by 2018. Whilst that may be ambitious and aggressive, it is the news that the public need to hear. That gives us 2 years to get the Gigafactory up and running, which make 2017 pivotal. The lessons of increasing production have been learned; often the hard way. But, they have been learned nonetheless. Musk now understands the full value of stringent quality control on both its own vehicles and its suppliers, a lesson learned from SpaceX supplier issues that caused the loss of a rocket. In an effort to make the production of the Model 3 easier and more cost effective, they have simplified the vehicle design enough to roll them off the factory line quick enough, but not so much to not tarnish the brand; it’s still a Tesla afterall.
Increasing Competition
There are startups that have offered much but produced little. Jaguar recently revealed an electric car that promises to challenge Tesla, if it gets into big time production, although they don’t yet have a plan to mass-produce cheaper electric cars. GM have the Chevy Bolt which has been mass-produced and will be in direct competition with the Model 3, when it finally gets released. GM are willing to sell the Bolt at a loss to increase their own standing in the industry. Musk really needs to Model 3 to be a success as it will make up the majority of their income over the next half-decade.
Self-Driving
Elon Musk announced in October that he plans to make every single Tesla have the ability to drive itself. Currently, this only works on highways but he wants the ability for the cars to drive themselves, everywhere, all the time and in all weather conditions. Self-driving cars are the future of transportation and it isn’t as far off as we might think. Musk is planning publicity stunts to drive from city to city without touching a steering wheel but the legalities of self-driving cars may cause issues; especially if Tesla’s start having accidents which get publicity. The technology needs to be perfected and made to be fool proof before the cars start driving themselves all the time.
Pleasing customers
Despite Musk being infamous for missing deadlines, he should understand the importance of fulfilling the existing pre-orders for the Model 3. He needs to deliver these vehicles, and deliver them on time and they need to be perfect. If he needs to hire an extra thousand staff for a short while, then he should get it done. Once these orders have been confirmed, he needs to expand beyond the early starters and build a Model 3 fanbase. He will have many competitors within the next 2 years including the Chevy Bolt which began to deliver their cars this month.
The original aim was to create luxury cars to build a fanbase. With the revenue generated from those cars, they would create a cheaper car that would be available to the masses. But, they shouldn’t forget where they came from and the original Tesla fans paid for cars at the very highest end of the electric car market. Tesla have been the biggest players in this area for the past few years but competitors such as Faraday, Lucid and Fisker are watching their success with beady eyes. The competitors will run Tesla hard and Musk shouldn’t forget the original Tesla buyers who paid for the best electric cars on the market.
Government policy.
The President-Elect, Donald Trump, isn’t particularly fond of renewable energy and has made it clear that he wants to reduce spending on green energy. He could relax the EPA fuel efficiency standards which could be fairly costly for Musk as it would reduce the value of his tax credits. The fact that he has joined Trump’s administration in some respect shows that Trump has respect for Musk and should listen to him. Musk should be well positioned to combat any changes in renewable energy policies, but he needs to be wary of them.
2107 will be a pivotal year for Tesla. It could be make or break, although the experts have said this for the past 13 years. Elon Musk has a big year ahead of him with all his ventures in operation, but knowing what he has achieved so far and the work ethic he applies to his life, I’ve no doubt that he can handle the pressure.
Some have said that Tesla have the potential to be a bigger company then Apple and whilst that may seem like a gargantuan challenge, it may be possible if they continue to defy the analysts’ expectations. They need to concentrate on the mistakes they’ve made so far and improve on the areas that have made the Tesla brand a household name. The great thing about Tesla is the reputation they have created for themselves. Across the world, the mere mention of a Tesla makes people take notice and say ‘hmmmmm’ and they should capitalize on this effect. This year could see Tesla go from niche player to mixing it with the big boys. If they do, it would be an incredible feat that hasn’t been accomplished before. If they don’t, they could end up fading away. With Musk at the helm, I have every confidence that they will manage it.
What do you think? Will this be the year of the Tesla? Let me know in the comments or on my Facebook page.
