1. Four ways in which Tesla is different from other car manufacturers

Hi this is Viram from Vested. Elon Musk recently surpassed Jeff Bezos to become the richest person in the world – all because of Tesla. A lot has been said about Tesla’s valuation and the fact that Tesla’s market cap is actually greater than the majority of the car manufacturers combined. Today we are going to take a look at what actually separates Tesla from all of these other automobile manufacturers.

To start off, let’s look at Tesla’s grand plan 
Tesla’s mission is to accelerate the world’s transition to sustainable energy.
According to a letter Elon Musk wrote in 2006, their strategy is:  

  1. Build sports car
  2. Use that money to build an affordable car
  3. Use that money to build an even more affordable car
  4. While doing the above, also provide zero-emission power generation options

And they’re well on the way to achieving this plan. 

So now let’s look at four ways Tesla is different:

Tesla is solely focused on electric cars

Tesla has spent the last 17 years working on EVs electric vehicles with no other distractions. They have literally made electric vehicles cool. With its sleek design and contemporary branding, along with its autopilot feature, Tesla has made people aspire to own an electric car.

Second, their superior technology:

  • Tesla’s motors are fitted with proprietary magnets.,These magnets are smaller, more efficient, and cheaper than their competitors.
  • Tesla also has access to the largest battery manufacturing capability in the world, through its partnership with Panasonic.  Over the last few years, Tesla has also partnered with other battery manufacturers and is looking into developing its own proprietary battery

Third, and the most exciting one, is Tesla’s Supercharger Network

So let me ask you this. What is the biggest hurdle toward electric vehicle adoption? Well, it’s this concept called ‘Range anxiety- Range Anxiety basically means that you fear that your car will run out of battery before you reach your destination. 

Tesla has solved this by creating its own charger network. These superchargers can basically charge a Tesla up to 50% capacity in about 20 minutes. Since 2012, this network of chargers has expanded significantly from just a few cities in the US now Tesla has more than 2000 superchargers with more than 19,000 stalls in 37 countries. 60% of these chargers are spread across the US and China.

The last reason is Tesla’s Vertical Integration in manufacturing as well as distribution

Unlike other car companies, Tesla produces most of its components in-house. 

They do this, not to save on the margin that the suppliers would add on but instead enables a much faster rate of innovation and technology development.

Now looking at distribution, what car companies typically do is that they appoint franchises, but what Tesla has done differently is that it has gone directly to the consumer. How that helps is that now Tesla can make a higher profit margin by cutting out the third parties and importantly they can also control the experience of selling the car to the customer as well as selling online.

Alright, so that was a quick overview of what’s under the hood at Tesla and what separates them from the other car manufacturers.