Tesla Motors intends to supercharge the public's passion for electric vehicles. Founded in 2003, the company designs, manufactures, and markets high-performance, technologically advanced electric cars and powertrain components. Tesla sells two models: the Model S, a saloon; and the Model X, a SUV, which are among the world's top-selling electric cars. The fuel-efficient, fully electric vehicles recharge their lithium-ion batteries from an outlet, and, depending on a driver's speed, are capable of approaching 300 miles per charge. Tesla is gearing up for the launch of the Model 3, an affordable family saloon, in 2018. Tesla CEO Elon Musk founded
, and also runs
Tesla is primarily occupied with the design, production, and sale of its electric vehicles, and offers two models, the Model S and Model X. In support of its vehicles, Tesla maintains a network of upwards of around 5,000 charging ports in over 750 stations worldwide.
Alongside its auto activities, Tesla has leveraged its electrical battery storage expertise to move into energy storage systems for homes and businesses. Its Powerwall products integrate with solar panels and can store enough energy to power a two-bed home for a day. Tesla's commercial and utility offering, Powerpack, is an energy storage system that offers features like peak shaving, load shifting, emergency backup, and demand response.
Tesla operates through 208 stores and service locations. Its rapidly expanding supercharger network counts 4,749 superchargers at 751 supercharger stations. North America accounts for nearly 50% of sales, followed by Norway (9%) and China (8%), and Other (35%).
Sales and Marketing
The company markets and sells cars directly to consumers through an international network of company-owned stores and galleries. Tesla is notable in that it does not use dealerships, and this approach means the price of its vehicles are non-negotiable.
Tesla has achieved rapid revenue growth in recent years while pumping everything it earns and more into R&D. Net revenue in fiscal 2015 increased 27% to $4.0 billion, while its net loss widened by 202% to $888.7 million. Sales volume increased for the year as its cars gain in popularity and become more widely available, while the company invested further in R&D and employee compensation, relating to the development of upcoming models and the expansion of its power storage and regulation products.
Cash outflow increased 815% to $524.5 million due to an increase in inventory to support growth, and the continued rapid expansion of its supercharger network.
Tesla's business model is based on using profits from its high-end vehicles to fund development of more affordable vehicles; the Model 3 will retail for around $35,000 and is due for release in 2018. The company is working hard to increase acceptance of electric vehicles in general, the perception of which has long been hampered by low range, low speed, and poor styling. The company led with high-performance and stylish autos, and has been investing heavily in its charging network, as well as home-charging facilities.
Tesla plans on bringing back its Roadster model, on which it made its name, in around 2018.
The company also plans on expanding its manufacturing footprint, including in Tilburg, the Netherlands, where it has an assembly facility, and Lathrop, California, where it has a specialized production plant.
Tesla's direct sales approach (thus bypassing dealerships) has been unpopular with lawmakers in certain US states, particularly Texas. Tesla has drawn the ire of dealership lobby groups, and is currently not permitted to run its own Tesla-exclusive dealerships. It has increased lobby spend to $1.5 million as a result, and won endorsement by state GOP convention delegates in May 2016 for direct vehicle sales.
Mergers and Acquisitions
In late 2016, Tesla made its most important acquisition to date when it purchased
in a deal valued at $2.6 billion. Both companies are led by Elon Musk and expect to achieve cost synergies of $150 million in the first full year after closing. By combining Tesla's new electric vehicles with SolarCity's newest solar products, the companies expect to lower hardware costs, reduce installation costs, and improve their manufacturing efficiency.
Tesla Motors is named for Nikola Tesla (1856-1943), the renowned Serbian-American engineer and inventor. Tesla Motors was incorporated in July 2003.