The American car manufacturer – or should that be tech company – Tesla wants to make the world both more sustainable and safer using its electric, autonomous cars.
After a fatal accident involving an self-driving Tesla the public has expressed doubts, but shareholder confidence remains high. How is this possible?
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Tesla wants to start an energy revolution and really get the market for electric cars moving. Among other initiatives, the company is aiming to achieve this not only by manufacturing innovative models but also releasing all of its patents. Although the omens are promising – Tesla is without a doubt a frontrunner and all over the media – at present less than 1 percent of the world’s cars are electric.
According to senior executive Elon Musk, the attention the accident received was excessive. ‘If anyone had taken the time to work out the statistics, they would have realised that, of the more than 1 million global car-related deaths a year, half a million would not have happened if the drivers had been using Tesla’s Autopilot.’
On average, around the world, a person dies every 96 million kilometres and, in the US, every 144 million kilometres. At the time of the accident, a total of 210 million kilometres had been driven by the Autopilot. Therefore, driving with the Autopilot has been proven to be one and a half to twice as safe as regular driving. Tesla’s shareholders know this. The Tesla share price (around 220 dollars) was unaffected and is today at the same level as earlier this year.
This doesn’t mean that Tesla can get away with anything. Last year, the share price fell 6 percent in one day when Consumer Reports (the American consumers’ association) gave the Tesla S a lower than average reliability score. Issues included the gear box, touchscreens and sliding roofs. The share price also fell significantly in February 2016 in response to disappointing sales. Still, each time, the dips were temporary.
Tesla’s share price continues to bounce back due to its continuous flow of promising and varied innovations, including the Powerplant, which stores energy from solar panels making households more self-sufficient with regard to electricity. The company also recently announced that the design for the new electric Model 3 has been finalised. With a retail price of 35,000 dollars, this will be – for the first time – an affordable model.
The cost of previous models is the reason why Tesla’s electric cars haven’t yet made a major breakthrough with the public. But change is coming. Electric cars are expensive because the batteries (making up a third of the cost of the car) are expensive, but the batteries are rapidly becoming cheaper.
Good news for Elon Musk who, with his mega-corporation, is now at the start of his second masterplan. Over the next ten years, Tesla wants to innovate with and invest in energy generation and energy storage, electric buses and trucks, (even) safer autonomous cars and car-sharing.
And although Tesla has still yet to record a profit, its shareholders and maybe even more importantly Tesla drivers, remain confident. In the words of a Dutch Tesla-owner, ‘Elon Musk is making the world a better, safer and cleaner place. The guy deserves applause, not criticism.’