By: Andy Newbound
Following the recent crash suffered by Uber’s self-driving prototype, the prospect of an autonomous driving revolution might have to be re-evaluated. However, that doesn’t mean the motor industry isn’t heading for a transformation of almost apocalyptic proportions.
This was confirmed by the recent news that Tesla, the US electric-car company headed by the charismatic founder Elon Musk, has hurdled Ford to become the second most valuable automotive company in North America.
Compared to the 113-year-old gargantuan Ford, Tesla is a mere spotty-faced 14-year-old upstart. Yet that hasn’t stopped analysts valuing the company at a whopping $47billion: Ford is worth a paltry $45billion.
This is an incredible turn of events for a company that only sold 25,000 of its flagship vehicles worldwide in the first quarter. By comparison, Ford sold over 600,000 vehicles in the USA alone. So how can Telsa be worth more?
That’s an interesting question, especially when you also consider that Tesla doesn’t make a profit; the company actually posted a loss of $773 million last year. However, this doesn’t tell the whole story.
Tesla have recently launched their first ever mass-market all-electric vehicle, the creatively named Model 3. Retailing at just $35,000, this will be the first Tesla that competes on price with its oil-guzzling rivals. Tesla believe this could be the turning point for an electric-car revolution. Clearly the analysts agree.
For battery-powered cars, Tesla vehicles deliver incredible performance, approaching that of more conventional cars. Their battery range is significant too, enabling drivers to travel over 200 miles per charge.
This is clearly an attractive proposition, with over 300,000 advance orders for the Model 3 on Tesla’s books already. The company aims to deliver 50,000 of these this year and a total of 500,000 by the end of 2018. And that’s just the beginning.
Right now, Telsa is constructing what will become the world’s largest building by its completion date in 2010. This $5billion plant in Nevada will manufacture the brand’s batteries and will cut costs by an estimated 30%; making Tesla’s vehicles even more affordable.
The market clearly believes Tesla will lead the world towards an automotive revolution, and others agree. Chinese firm Tencent took a slice of the action, paying $1.78billion for a 5% stake.
This is small change compared to the ambitions of Tesla owner, Musk. In 2015, he predicted that his company would one day eclipse the value of mega-brand Apple. Tesla has some way to go before achieving that ambition; Apple is currently valued at a meagre $750billion. However, there aren’t many experts who would argue against Tesla and Musk reaching their goals. An automotive revolution looks like it has already begun.
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