Tesla Motors Inc (NASDAQ:TSLA) have achieved a tremendous success in a short span of time. The company reported its first quarterly profit ever; the stock has been performing exceptionally well, got very good reviews from the trusted Consumer reports, and also the company is in talks with Google Inc (NASDAQ:GOOG) for self-guided cars.
The CEO, Elon Musk, is following Porsche-like strategy of selling premium vehicles in decent volumes. If the billionaire succeeds, it will be a historic achievement as the vehicles in questions are electric ones, which have long been criticized for being unviable.
However, among all this hype and buzz, the idea of producing a mass-market product affordable by many still remains distant. For the electric vehicles to make a mark on emissions and petroleum dependent markets, they need volumes.
Tesla Motors Inc (TSLA) Model S
To achieve such a goal, the $30,000 to $35,000 car from Tesla Motors Inc (NASDAQ:TSLA) becomes all the more important. The Model S from Tesla before it was available for sale was expected to cost much less. In 2009, at Frankfurt auto show, Musk told that Model S would sell for $49,900.
Tesla Motors Inc (NASDAQ:TSLA) has introduced different variants, but the battery pack has pushed the prices much higher than was expected. The top model having 85-kWh battery and 265-mile range has a price tag of $79,900. A 60-kWh Model S with a 208-mile range starts with a base price of $69,900. The performance version begins at $94,000. (Prices exclude the $7,500 federal tax credit.)
In March, this year, the management of the company scrapped a 40-kWh model, priced at about $60,000, citing low demand.
Has a foundation in place
Tesla Motors Inc (NASDAQ:TSLA)’s share prices are up almost two-thirds since May 8, and the expectations seems to be growing more, some even terming the young company as the ‘next big thing.’ The CEO is leaving no stone unturned in fuelling such belief; he purchased $45 million shares in the latest offering and is expected to invest another $55 million later. To keep the pace of growth, the company has increased its debt and equity offerings to raise more than $1 billion in cash.
With all the success, Tesla Motors Inc (NASDAQ:TSLA) now has the foundation in place from where it can build the empire. An empire can be built only by including masses. Now, after having successfully completed the first round, the next challenge of producing an affordable product, will be tougher.