Tesla’s surprising new route to EV domination
Elon Musk, the carmaker’s boss since 2008, has not achieved that goal. His company, a rare insurgent in an industry with formidable barriers to entry, has grown at neck-snapping speed. In the first quarter of 2023 Tesla’s Model Y mini-SUV was the world’s bestselling car.
In the second quarter it delivered a total of 466,000 cars, beating analysts’ forecasts (see chart 1). Mr Musk’s promise of 2m sales this year, up from 1.3m in 2022, no longer seems fanciful. On July 15th the first Cybertruck, an angular, retro-futuristic pickup, rolled off the production line.
Tesla has just unveiled an expansion plan for its German factory, where it wants to double capacity to 1m vehicles per year. Besides almost single-handedly reimagining the car, Mr Musk has done the same to the car industry. His focus on streamlined manufacturing of only a handful of models has kept costs at bay.
Last year Tesla boasted operating margins of 17%; among non-niche carmakers only Porsche, which churns out fewer than 1m cars annually, matched its performance. Mr Musk’s ambition to dominate the auto business—by making 20m cars a year by 2030, double the current output of today’s top manufacturer, Toyota, and by creating the go-to self-driving system—certainly compels investors, who value Tesla at around $900bn. That is down from over $1trn in early 2022 but still more than the next nine most valuable carmakers put together.
Incumbents are scrambling to electrify their product ranges and to copy Mr Musk’s vertically integrated approach to production, while fending off a wave of EV newcomers, many of them Chinese, all trying to be the next Tesla. The question now is whether Tesla can keep growing as fast and as profitably as it has for much longer. In its
. Read more on livemint.com
