Tesla Finds It Difficult To Make Way to the Mass


Tesla Motors is loved by the Wall Street. Not only the finance sector but leading Hollywood actors like Brad Pitt, George Clooney, Leonardo Dicaprio and others are also fans of this company. First the Tesla Motors attracted these stars with their luxury S model and now they are trying to woo the middle class with the economical 3 model, which is to come out in 2017 for $35,000- $40,000. Both of these models are fully run by electricity and are in Sedan class. The luxurious S model is available now for $80,000 to $100,000.

Elon Musk, the CEO and founder of Tesla hopes that this economy model will take Tesla motors to the mass. He also believes that this will help Tesla to triple the production to 100,000 by the end of this year and reach 500,000 by 2020.

However, not everyone is happy and optimistic as Musk, the man who also funded PayPal and SpaceX. As the price of the oil goes down continuously, the oil run cars are coming back strongly into the front. The major loser here is the electric car segment. Tesla itself has sold 3.1 percent less cars in 2014 compared to 2013 and the company managed to sell only 18,750 vehicles. They fell well short of their high target of selling 35,000 cars worldwide.

This made Morgan Stanley doubtful of the future of Tesla. In a statement, the bank said, “we still see Tesla as a niche player and we expect the company to deliver no more than 300,000 cars by the end of 2020.” Now compare this to the target of Mr Musk, 500,000 by 2020.

Tesla depends heavily on manufacturing high capacity battery at a very competitive price which will help them to keep the price low. However, presently, the oil is coming down very rapidly which makes the case of Tesla even less viable. This makes the financial market very sceptic about the success of Tesla’s ambitions.

Presently, Tesla is selling at $206 but it was up at $275 before the Denver auto show which adds more doubt in the minds of the investors.

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