Tesla: More Than Just A Car Company
If you know anything about Tesla it’s probably the following two points:
- They make electric, semi-autonomous automobiles.
- The company is led by controversial billionaire entrepreneur Elon Musk.
A deeper dive, however, reveals some additional information that many individuals may prove interesting, if not surprising, to many.
Humble, Yet Sporty Beginnings
While the South African born Musk (who also co-founded online payment processor PayPal and space technology firm SpaceX, the latter of which he still oversees) has served as the public face of Tesla since 2008, it was actually founded five years earlier by two American engineers - Martin Eberhard and Marc Terpenning.
Tesla’s first electric vehicle, the Tesla Roadster, debuted in 2008 and was far ahead of its time. A prototype of sorts in which Tesla only built 2,450 vehicles, the car achieved performance numbers once exclusively reserved for gasoline-powered sports cars.
0 to 60 in 3.7 seconds.
A top speed of 250 mph.
All with a range of 244 miles on a single charge - arguably the most impressive number.
A new version of the Roadster, due in 2020, looks to raise the bar even further on the capabilities of an electric sports car.
Its second vehicle, the Model S sedan, launched in 2012.
Although their main focus is cars, Tesla does have a burgeoning business in solar energy with residential solar roof tiles and panels and their residential home battery the Powerwall.
The company also offers a commercial and utility version of its solar energy and storage solutions.
Although Tesla is first and foremost an automaker, the company, much like its namesake, is just as much an innovator.
To understand where the US’s only fully electric car company has been and their plans for the future, we must answer two initial questions for where the company is staking its biggest claim - what is an electric car and what is automotive autonomy.
What is an Electric Car?
Electric cars come in two varieties - hybrids and battery electric vehicles or EVs. Hybrid electric cars, to varying degrees, utilize both gasoline and electricity to power their engines. EVs are fully electric.
No gas. No combustion engine. Just an electric engine powered by fully rechargeable batteries.
The primary selling point to EVs is zero emissions. It’s an important distinction for the lithium-ion battery-powered Teslas.
Although the company may deal exclusively in high-end, fully electric vehicles, its founding was less as an automaker and more on the principle of creating something that did not consume gasoline.
According to Martin Eberhard:
“I didn’t start as an electric car enthusiast but as a non-fossil fuel enthusiast.”
In order to realize this early goal, Tesla's ultimate plan is to control every aspect of production and become a fully vertical electric car company. This includes making its batteries in-house.
What is Automotive (or Vehicle) Autonomy?
Apart from producing wholly electric vehicles, Tesla aims to produce automobiles that one day will be fully autonomous.
What exactly does that mean? Here’s a quick lesson in the six levels of vehicle autonomy:
- Level 0 - No Automation: Driver controls every aspect of the driving experience.
- Level 1 - Driver Assistance: Vehicle features one automated system (such as cruise control).
- Level 2 - Partial Automation: Autonomy includes regulation of speed and lane awareness in optimal conditions (interstate driving, for example), but the driver still monitors and controls vehicle
- Level 3 - Conditional Automation: Huge leap in technology from level 2 to level 3 with the vehicle able to self-drive in most circumstances, but driver influence is required.
- Level 4 - High Automation: Vehicle is fully autonomous in most conditions; a driver can still override in certain situations or emergencies.
- Level 5 - Full Automation: No gas or brake pedals, no steering wheel, no physical driving skills necessary.
Tesla vehicles currently achieve around Level 2 autonomy.
“All cars being produced all have the hardware necessary - computer and otherwise - for full self-driving. All you need to do is improve the software.”
Translation: The hardware is installed, and the Tesla cars are designed and built to one day drive themselves, but the software, and, really the whole idea of a fully autonomous vehicle remains a work in progress.
Tesla’s First Generation of Automobiles
What isn't a work in progress are the actual cars that Tesla produces.
We’ve already noted the groundbreaking Roadster, which piqued the curiosity of car enthusiasts everywhere. But the car that grabbed everyone's attention was the Model S.
After Tesla's initial public offering in 2010, which generated almost $230 million in capital, the Model S sedan was released in 2012. Running between 235 and 300 miles on a single charge based on the battery options purchased, the Model S represented a leap forward in mass production of electric cars.
In the years following its release, the Model S received accolades from both professionals and car enthusiasts. It was named car of the year by both Motor Trend (2013) and Car and Driver (2015), has been on Consumer Reports Recommended List since 2016.
Produced at an assembly plant in Fremont, California, the car topped the electric car sales charts in both 2015 and 2016. It ranks second only to the Nissan Leaf in total sales (although it's worth noting the Leaf has been in production longer and is considerably cheaper).
As of today, the Model S has sold over 250,000 units, over half of which are in the US. On its Long Range version, the S can achieve a range of 370 miles on a single charge - the highest level of performance of any current electric car.
In 2015, Tesla launched the Model X crossover SUV. It's a bit of a misnomer as the X is built on a car chassis, but its styling and function lend itself comparison to SUVs as opposed to sedans.
While not nearly as celebrated as the Model S, Tesla’s crossover still represented a considerable breakthrough for electric vehicles as it was the first commercially available, fully electric SUV on the road.
However, as groundbreaking as they may, both the Model S and the Model X remain out of reach and impractical for most consumers. The Model S ranges in price from $75,000 to near $96,000 and the Model X runs from $81,000 to over $102,000 (not counting electric car incentives or gas savings).
Tesla, though, is looking to expand its customer base.
The Model 3 and Model Y
The entry-level Model 3, which is already in production, and the mid-range Model Y, set to start production in 2020 (although it is available for order), look to bring Tesla into a crowded and highly competitive market segment.
The Model Y will serve as Tesla’s company crossover - an increasingly popular segment within the car industry. The purchase price starts at $48,000.
Compared to the established line of Tesla autos, the Model 3 and Model Y, don’t offer anything remarkably new, except of course for the lower price points.
What they do signal though, is the beginning of a new business model for Tesla, and for the auto industry as a whole - online car purchasing. The move will pit Tesla against the more traditional dealership-driven car buying method, which has been protected by state laws for decades.
Consumers for Auto Reliability and Safety president Rosemary Shahan elaborates on what the change would mean for future customers:
“What Tesla is proposing is actually consumer-friendly. It gives you more of an opportunity to take control of the action, and you’re not on the dealer’s turf.”
Although it does mean lost jobs for some at Tesla, according to a memo Musk sent to employees, the ultimate goal is affordability:
"Unfortunately, this means that some jobs will be impacted or transitioned to other areas of the business. This is a hard decision, but it [store closings] is necessary to make our cars more affordable.”
Much like the transition to online-only vehicle sales and bringing battery production in-house, there is only one word that aptly describes Tesla’s outlook for the future - ambitious.
For starters, Tesla has plans to increase its already expansive network of superchargers, the electric car equivalent of a gas station. In doubling its network, as well as releasing a next-gen version, the plans are to have superchargers close to 95% of the population in “active” markets - read: where a lot Tesla’s have been purchased.
Next up is the bold claim from Musk (which he has a habit of making) is that Tesla plans on having a full network of robotaxis available at some point in 2020. In Musk’s words:
“I feel very confident predicting that there will be autonomous robotaxis from Tesla next year — not in all jurisdictions because we won’t have regulatory approval everywhere. From our standpoint, if you fast forward a year, maybe a year and three months, but next year for sure, we’ll have over a million robotaxis on the road. The fleet wakes up with an over the air update; that’s all it takes.”
Finally, it’s worth noting that Tesla even has plans for its first truck, which would ultimately match its offerings with every other major manufacturer. Musk called the new vehicle a “cyberpunk truck” at a recent shareholders meetings.
From a sports car to a pick-up truck and all-electric points in between, Tesla has indeed made the transition from car maker to innovator. Not too bad for a company that started merely as a means to save a few fossil fuels.
Written by Anna Kučírková, July 15, 2019.