How does a company like Tesla Motors, which sells only 50,000 vehicles a year, a number which is deemed as microscopic when compared to much larger companies such as BMW, which sells over a million number of cars in a single year, be a multi billion dollar company?<\/p>\n
With the increasing number of Tesla products out in the public right now, it will come as no surprise that the company is doing very well financially in the past few years. There was a significant increase in revenue between 2012 and 2013, increasing by 487% and then again from 2013 to 2014, increasing by 59.9%. Out of the $3,198,356,000 of revenue collected in 2014, $3,192,723,000 was gained from automotive sale alone.<\/p>\n
<\/a><\/p>\n The sudden increase in revenue in 2013 caused the stock price for Tesla to skyrocket and almost reach its peak in the mid of 2014. Although the stock market price decreased in 2015, the stock market price for the company is predicted to increase when the new Model X and Model 3 are released in the next 2 years.<\/p>\n <\/a><\/p>\n Although Tesla Motors has shown a promising number of revenue for a company that was founded a little over 10 years ago, its numbers are like a drop in the ocean as compared to the numbers produced by its competitors across the board. Take BMW, for example, which is like Tesla Motors, is a company that manufactures luxury vehicles. BMW made a total of US $87,363,726,600 in revenue in 2014, that\u2019s 27 times more than what Tesla made in the same year. The main reason for this is because of the far more diverse vehicle models that BMW has available for purchase as compared to Tesla, which currently only has 1 model, the Model S, available for purchase.<\/p>\n <\/a><\/p>\n Thus, as compared to BMW, Tesla will need to grow exponentially. It\u2019s hard to imagine this sort of growth happening any time soon, regardless of Tesla\u2019s product offerings as BMW has a total of 25 different models versus Tesla, which currently offers 1 model of vehicle available for consumers. Even when both the Model X and Model 3 are released for the public eventually, that would round up Tesla\u2019s model line-up to a grand total of 3, which is not at all a number sufficient enough for the company to beat out its competitors.<\/p>\n With such a significant difference in the amount of revenue that the two companies are making, one might think that the market capital of BMW would be much greater than that of Tesla. However, that is not the case at all. Tesla has a market capital that is only half the amount of the market capital of BMW. That is pretty impressive for a company that is making 27 times less<\/em> in revenue than its competitor. In fact, it is even much more impressive that a considerably small company like Tesla is able to reach a billion dollars in market capital, considering the fact that the company only produces about 30,000 vehicles a year.<\/p>\n \u00a0 \u00a0\u00a0<\/a> <\/a><\/p>\n Tesla Motors Inc., founded in 2003 by Martin Eberhard and Marc Tarpenning, is an American company that focuses on designing and manufacturing electric cars. Tesla Motors is the first public American Car Company since Ford Motors became public in 1956. The company has led the revolution by mass-producing the first line of all-electric vehicles in the world. Elon Musk joined Eberhard and Tarpenning in 2004, where he contributed $ 7.5 million to help fund the company.<\/p>\n Musk went on to become the Chairman of Tesla\u2019s Board of Directors. Tesla was founded, in Musk\u2019s own words, \u201cto accelerate the advent of electric cars\u201d. Every model designed, every vehicle manufactured had to be more than competitive; it had to be flawless. A single defect could set the electric movement back decades, as it had been in the past. Musk played a very active role within the company and oversaw the design and manufacture of Tesla\u2019s first production vehicle, the Tesla Roadster.<\/p>\n The Tesla Roadster is an all-electric sports car that was the first highway-capable all-electric vehicle for sale in the United States. General production of the car began on March 2008. On June 29, 2010, Tesla launched its initial public offering on the NASDAQ, which raised $226 million for the company, selling 13.3 million shares of stock. By the end of 2011, Tesla stopped selling Roadster models in the United States, to focus on the launch of its newer, more defined Model S electric sedan. While not necessarily revolutionary, the Roadster was instrumental in establishing the Tesla brand.<\/p>\n The past few years have been looking pretty good for the company. The highly anticipated Model S, an all-electric, 4 door luxury lift-back sedan was released in 2012, saw global sales that totaled to 22,500 vehicles in the year 2013, selling a whooping 6.900 vehicles in the fourth quarter of that year, pushing the year-sale beyond the company\u2019s target.<\/p>\n <\/a><\/p>\n Most recently, Tesla Motors just announced new additions to the Tesla Family by introducing the Model X, a four door, seven-seater car that will be out for release in 2016 and the Model 3, the first affordable electric car that Tesla will produce will be released in 2017. Due to the different features and capabilities that all 3 cars have individually, the 3 vehicles have enough differentiating features from each other to prevent intercompany sales cannibalization despite all 3 of them being a high performance electric luxury vehicle.<\/p>\n In addition, Tesla Motors broke ground on the Gigafactory in 2014 in Nevada, which is expected to begin cell production in 2017. The Gigafactory, which would greatly increase battery production and reduce its manufacturing cost is expected to reach full capacity by 2020, and produce more lithium ion batteries annually than were produced worldwide in 2013.<\/p>\n There is also an increasing number of Superchargers that are available in the United States right now. The Supercharger, which is a high-powered facility where Tesla drivers can get free electricity to extend their range while traveling much like gas stations for electric vehicles, grew over 200% in the United States between the year 2014 and 2015. The company added 958 Supercharger and destination charger locations throughout the country, which bring the total to 1,346. 90% of the US population is within 175 miles of a Supercharging location, close enough to get access to the countrywide charging network.<\/p>\n