The past several years have seen the meteoric rise of Tesla (TSLA) overshadow the existing giants of the automotive industry. But what do people see in this relatively young, but massive enterprise? What even is Tesla? Is it a car company, energy company, or technology company? We'll attempt to briefly address all of these questions at the end.
1. Auto Pilot
Though many car manufacturers claim to have an autopilot system, Tesla is the only one to offer a true hands-off autopilot system, as opposed to a handful of advanced driver assistance features. If you want the fastest car, you get a Bugatti for $3.89M. But if you want a car that drives itself (probably way more practical) you get a Tesla. And the self-driving option is only $10,000. So not only are they the only company that's cracked the self-driving car problem, they've made it relatively inexpensive. A bonus of owning a Tesla is that they are constantly being updated with new data to make traveling safer.
Imagine a world where we could remove the majority of the danger from the driving experience. There are an estimated 10 million self-driving cars on American roads and Tesla autopilot fatalities are numbered to be 10 (according to tesladeaths.com). That sounds extremely safe to me. At any rate, it'll be interesting how this technology develops in the future.
Once perfected, Tesla has made no secret about one of their intentions for this tech: Robo-Taxis. One day we could have an Uber-like service, but with one major difference: no drivers. This would remove the need for labor in the taxi/rideshare industry, giving Tesla an insurmountable edge over the competition.
2. Energy
For the initiated, you may already know that the energy sector has had a boom recently, outperforming even tech. Tesla is invested heavily in providing self-contained and self-sustaining solar energy systems. They have home units that can subsidize or even cover all energy needs of a residential property. After sweeping blackouts in Texas last winter due to weather conditions, these "personal power grids" are becoming ever more popular. In July of this year, Tesla reported a whopping $801M in revenue from its energy storage and generation business. That's up 62% from the previous quarter, and 116% up from the previous year. Tesla's operating cost was $781M pushing this sector of operation into profitability for the first time, with more than enough room to grow. Elon Musk (Tesla CEO) said that production for Tesla's energy products trails demand by a hefty margin citing the global microchip shortage as the main cause. It stands to reason that when the production and supply chain for microchips recovers, production will have a chance to meet demand. That will assuredly grow revenue in the future.
3. Automotive Domination
As we stated at the beginning of this article, Tesla has rocketed past legacy auto manufactures in just a few short years. In 2021, Tesla has already outsold Jaguar/Land Rover and Volvo, while being hot on the heels of BMW, Mercedes-Benz, and Mazda. Let's talk gigafactories. Tesla has 4 gigafactories operating at the moment, with plans for more in the future. Most notably of which is Giga Berlin; the largest, most advanced factory in existence according to Tesla. The goal is ambitious, to say the least, as the aim is to turn out 500,000 Model Y vehicles per year. Another gigafactory is in the works in Texas, Tesla's new home. Giga Texas sits on 2,500 acres in Austin and is intended to be the birthplace of the long-awaited Cyber Truck and Semi Trucks. The new Tesla Semi Truck, mixed with self-driving technology has the potential to disrupt the trucking and logistics industries in a way that plays out very well for Tesla.
So back to our question in the beginning: is Tesla a car company, energy company, or tech company? The answer is, well, all three! Tesla is an amazing modern phenom to witness.
Comments