Four ways in which Tesla is different from other car manufacturers

Transcript

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

Tesla’s mission

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 that Elon Musk wrote in 2006, their strategy is to #1 Build sports car, that’s what they started with, then use that money to build an affordable car, again, use that money to then build an even more affordable car. 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 in which Tesla is different:

Focus on electric vehicles

The 1st is that Tesla is solely focused on electric vehicles:

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 actually own an electric vehicle.

Superior technology

The 2nd is it’s 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 batteries.

Supercharger Network

3rd, 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 their own charger network. These superchargers can basically charge a Tesla 50% capacity in 20 minutes. Since 2012, the network of chargers has expanded significantly from just a few cities in the U.S. now Tesla has more than 2,000 superchargers with 19,000 stalls across 37 countries. 60% of these chargers are spread across the US and China.

Vertical Integration in manufacturing and distribution

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 it enables a much faster rate of innovation and technology development.

Now looking at distribution, what other car companies typically do is 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 sell it 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.