Despite Criticism, Tesla Motors Inc (TSLA) Good For Industry’s Growth

Despite Criticism, Tesla Motors Inc (TSLA) Good For Industry’s Growth
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Tesla Motors Inc (NASDAQ:TSLA) is trying hard to make a car that will be affordable by all and not only by the rich people. The electric car company is doing every bit including fighting dealers, introducing financing schemes, warranty commitments etc. The entry of Tesla Motors in the segment is definitely in the long term interest of buyers and for the industry.

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Despite Criticism, Tesla Motors Inc (TSLA) Good For Industry's Growth

Despite all these efforts Tesla Motors Inc (NASDAQ:TSLA) has been criticized for making premium products. There has been criticism against the US Department of Energy (DOE) for providing loans to Tesla Motors as the carmaker designs and manufactures cars only for rich people. Last week Elon Musk announced some big deal and a new payment plan. He said that approximately 10 percent of the U.S. population will be able to afford a new S Model of Tesla.

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DOE Providing Loans To Tesla Motors Inc (TSLA)

Although there can be more than one reason for opposing the DOE providing loans to Tesla Motors Inc (NASDAQ:TSLA), but the reason that it makes only expensive cars is definitely not among them. The innovative efforts, which Tesla is putting right now, will be helpful in making the electric cars more competitive with the cars that are powered by gas. This will further help in increasing demand of electric cars and bring down the oil consumption.

The major advantage of innovation will be that the price of the battery will come down. The electric model of Ford Focus is more in price and of less range, version of its gas powered Focus.

Model S from Tesla Motors Inc (NASDAQ:TSLA) is a compact electric vehicle and flexible designed and also has a flat battery pack. The company has fit the passenger compartment above the propulsion system and not stuffed between the massive gas engine and gas tank. There is the seating capacity of 5 adults, 2 kids in a rear facing seat and the bags can be stored in the front engine compartment area if it would have been a conventional car. General Motors is also looking forward to a similar “skateboard” concept.

The strategy adopted by Tesla is a successful one although the price of the car is kept two times as much as the Nissan Leaf or the GM Volt. Tesla is selling more numbers of cars compared to Nissan Motor Co., Ltd. (PINK:NSANY) (TYO:7201) and General Motors Company (NYSE:GM) Volt and has also increased the production levels at its new factory.

Tesla Motors Inc (NASDAQ:TSLA) is also concerned about the cost of batteries of the electric vehicles. The battery cells used are cylindrical in shape, which is used in laptops and other portable devices. There are many interesting concepts that Tesla is testing to solve issues with electric vehicles.

To infuse more innovation in the production, Chris Poritt has been hired by the electric car expert to serve as Vice President of Vehicle engineering. Prior to Tesla Motors Inc (NASDAQ:TSLA) he was in Aston Martin.

The CEO Elon Musk is also favoring a bill, which will allow the electric car manufacturers, to directly sell the cars rather than the current norms which call for selling through franchised dealerships.

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at
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