Tesla Motors Inc (TSLA) Success Should Teach Detroit Some New Tricks

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With market cap pushing past $15 billion in its first year to even post profits, Tesla Motors Inc (NASDAQ:TSLA) is already starting to shake up the auto industry. Right now Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk is just selling expensive electric cars to the elite, but he aims to bring down the cost of his vehicles and mass produce electric cars. His successful background, including SpaceX and PayPal, suggest he’s someone to take seriously. But according to Shai Agassi writing at the Huffington Post, traditional auto leaders may be learning the wrong lessons from their newest competitor.


Tesla Motors’s achievements

GM Vice Chairman Steve Girsky has recently disclosed that he had formed a team to study Tesla Motors Inc (NASDAQ:TSLA)’s achievements to better understand how much of a threat he is, but if all they do is focus on the engineering behind the Model S they will miss the fact that Tesla Motors Inc (NASDAQ:TSLA) has transformed electric cars from a sacrifice that some people will be willing to make into a luxury car that people would love to own.

Tesla Motors continues to innovate

The design may not be perfect, and some reviews have been pretty abysmal, but the Model S has another major advantage over normal, internal combustion engine models: it can be upgraded. Just like a phone or a computer, the Model S can have its software and battery upgraded as Tesla Motors Inc (NASDAQ:TSLA) continues to innovate. That means potential customers have less reason to wait before buying and current owners continue to interact with the company building a stronger relationship with the brand. As Apple Inc. (NASDAQ:AAPL) can tell you, brand loyalty is great for business.

Finally, batteries are improving constantly. They are cheaper, smaller, and longer lasting than just a few years ago and the trend will only continue. That means if you’re General Motors Company (NYSE:GM) or Ford Motor Company (NYSE:F) and you want to compete with Tesla Motors Inc (NASDAQ:TSLA) in the electric vehicle market you can’t focus on the Model S that has just come out. If you do your new electric car will look like a joke compared to the latest Tesla model. Figure out what Musk’s company is likely to be offering customers two or three years from now and aim to beat it.


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