In a recent letter to shareholders, Tesla Motors reinforced to the world that they are preparing to shake up the automotive industry.
The electric car manufacturer has announced plans that will see it partner with Panasonic to build a large scale battery manufacturing facility known as the ‘Tesla Gigafactory’. The Tesla Gigafactory will be responsible for driving growth in their manufacturing numbers. The company currently produces 800 electric cars per week, however are hoping to have an annual production of 100,000 vehicles by the end of next year.
The investment Tesla is putting into production accompanies the demand that the market has for their electric vehicles. Even though they had their highest production quarter to date, waiting times for their Model S increased. With 156 supercharged stations the company has the largest and most rapidly growing fast charging network in the world. Since inception in 2003, Tesla has enabled their customers to drive 32million supercharged miles, for free.
Undoubtedly Tesla is the first manufacturer to make a real dent in the electric automotive market. As such the company’s ambitions do not lie in purely consolidating the North American market, but rather global expansion. Speaking of this expansion in the Q2 shareholder letter, the company states:
‘We continue to open stores and service centres worldwide to support our global expansion. For the rest of 2014, the rate of location openings will be fastest in China, followed by Europe, and then North America.’
Tesla appreciates the need to take advantage of its success and is cracking into the key global markets. Australia is also not immune to this automotive revolution, with the RHD Model S becoming available later this year. Tesla is coming, in a big way.
If Tesla consolidates its position as ‘the brand’ for electric cars, a tagline that they have been able to foster in the environmentally conscious market of California, there may be a steep hill for the likes of GM and Ford to climb. Their aggressive expansion strategy will be appreciated by energy companies, who stand to make a lot of money out of the world going green. Only time will tell just how strong the revolution will be. OCM.
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