That "mid-sized car company" has revolutionised an ~120-year industry while still managing to remain at the forefront, that's why its valuation is so high (even though I also do believe it's over-valued).
I'm not saying this as a Tesla-lover nor as a fan of Musk, in fact, as a lover of gasoline engines and of cars in general I see this as a tragedy (I regard EVs as refrigerators with some wheels attached), but it is what it is.
Tesla produced the first ICE-equivalent EV sedan that was not merely a "compliance vehicle" in decades.
Then, it turned out, people bought them by the hundreds of thousands, single-handedly recreating the market for EVs.
Then, other manufacturers noticed, and started realizing they might be left behind if they didn't take EVs seriously.
Now, sure, there are many competitors, but even still they have only been built in small quantities.
How long Tesla's edge will last is an open question, but there's no question that Tesla has single-handedly exploded the demand for EVs in the consumer vehicle market.
The real ace was releasing an EV sports car, the Tesla Roadster. That's what caught people's attention. They were able to see how EV drivetrains were actually better than their ICE counterparts and that electric motors can do much more than drive golf carts – despite having powered everything from submarines to locomotives, people still thought they were weak.
Otherwise, Nissan would have been Tesla. They have produced some of the first practical EVs, way before Tesla did. Unfortunately, they made them for the Japanese consumer, not for the average american. At least not initially.
You’re right that the Tesla Roadster led the charge — no pun intended — for EVs as uncompromising vehicles.
But I don’t think Nissan would’ve been Tesla: they didn’t think people would pay for a full-range EV (and still don’t, looks like?) and didn’t prioritize it. For many Americans that means the LEAF could not be their only vehicle.
The supercharger network also played a huge role in normalizing EVs, in particular in making the Tesla Model S the first car you could convince yourself was a great car that “happened to be an EV”. The S isn’t perfect, but it doesn’t have any huge, obvious EV-related deficits, like the LEAF’s range and charge time.
Nissan would never have been Tesla. They might have been the largest producer of EVs if history had run a different way, but that's a million miles away from being Tesla.
I am not an expert in cars and yet I know the Renault Zoe was commercialized in 2012, the year of the model S, for a reasonable autonomy and a much, much cheaper price. I believe tesla were the first to sell low volume, pricey EV cars.
Their range and timing advance is only because of choosing the rich over the middle class, aka a lesser impact. Although it's true EV were and remain not cheap but it's getting quickly much better and it's definitely not tesla that will lead the dance of democratisation
If you took the badges off, I think most people would have a hard time telling the LEAF (EV) and a Versa (ICE) apart. The LEAF is no 911 or Jaguar E-type, but it's not a "hey, look at me; I'm electric!" clown car either.
Didn't the Zoe have a 22kwh battery? I don't doubt that it was practical for some things, but that was exactly the kind of car that many (especially in the US) used as an example of the "impracticality" of electric back then.
Don't forget the importance of charging either. When the 3 came out, GM was considering the Bolt a direct competitor. They had the mindset that people were only buying these as city cars.
To this day, GM sells that "direct competitor" with a ~55kw charging limit.
Tesla is what made the other manufacturers realize that people were willing to wait 15-25 minutes on DCFC while road tripping electric cars.
The Leaf that Nissan sold while the Model S was Tesla’s only sedan (ie 2012-2017) was not an ICE-equivalent vehicle. It was explicitly a city vehicle with a < 75 mile official range, an effective 40-50 mile range, and no fast charging.
If “high-performance” means “can handle the daily driving needs of > 50% of the population” then I guess you’re right, Tesla only created that market.
The daily-driving needs of 95% of the population are incompatible with a 100k$ car. The Leaf fit the needs of more people simply by virtue of having an acceptable price.
The Zoe also had a 150km+ effective range, which is more than enough for most people (maybe less so for Americans).
The Model S was the first EV that “happened to be” an EV. You didn’t have to compromise on range, power, comfort, or anything else to own it. That’s why it succeeded. It was a great car, and happened to be an EV.
Tesla’s chief designer himself: “We are past the idea of an environmentally friendly vehicle needing to look different. People don't want to sacrifice anything, including style, to own an efficient car.”
You definitely needed to compromise on range power and comfort. The 60kWh version was more expensive than an BMW M4, S5, or A6, all in more powerful, comfortable, etc...
You definitely had to compromise to own it, on almost everything aspect. Despite everything else, people were buying it because it was electric.
Every $100k vehicle is different, that’s not what “compromise” means. And the Model S had comparable power and comfort — not for everyone of course — to the cars you mention. Obviously people were buying it because it was electric, that added $30k in battery cost alone, you wouldn’t do that if you didn’t care about it being electric.
But my point is that could do everything an American expects a baseline car, like a Honda Civic, could do - it worked as a car in addition to being electric, which is more than can be said for the Leaf and Zoe, on range and charge time concerns alone.
The Model S had far inferior comfort, especially the 2012 version. It got better. You had to compromise on everything in exchange of getting an electric car.
> But my point is that could do everything an American expects a baseline car, like a Honda Civic, could do - it worked as a car in addition to being electric, which is more than can be said for the Leaf and Zoe, on range and charge time concerns alone.
Sure, at 100k$, which is too much for what an American expects of a baseline car. I am sure Renault and Nissan could have done it to if they had multiplied the price by 4, but then it would defeat the entire purpose of a practical everyday car. It's like saying that Ferrari makes practical every day cars because of the GTC4Lusso.
I can't tell if either I'm doing a terrible job making my point, or you're deliberately misunderstanding me.
Let me ask you this: The Model S outsold the Leaf and the Zoe, and helped launch a new car company that has now sold more BEVs than any other manufacturer. Why do you think that is?
One possibility is that they made EVs that many people wanted to buy, and people bought them. I'm proposing that this is the case, and the fact that the Model S sold well despite costing $100k is an extremely strong indicator of this.
New EVs, even those from established manufacturers, are emulating Tesla, not the Leaf or Zoe.
Without Tesla, we may have had many Leaf or Zoe-like vehicles, but given how uptake of those vehicles went, it seems unlikely that we'd be where we are today -- in California, in 2021, BEVs were ~10% of all new vehicles sold.
Personal opinions of the cost or style of Tesla's EVs aside, one can't deny that Tesla made EVs attractive in the eyes of Californian consumers, and as goes California, so goes the world (for better or worse).
"The high-end market is only a small part of the numbers" correct, but in a parallel universe where Tesla didn't exist & the typical EV looked & performed like a Leaf, would anyone actually want an electric car? Marketing and psychology are important.
That is quite unreasonable to expect. The Renault Zoe came out at around the same time as the Model S and had over 150km of reasonable range, at half the price a Model 3 sells at today. It was already competitive.
150km of real world practical range is more than adequate. It's only 50% less than what the model S was when it came out, which is more than enough for the majority of people in the world.
At the end of the day you can't explain love and people love Elon Musk. Guys from all over the world are in a sort weird parasocial relationship with the guy. That never happened with the CEO of MySpace and BlackBerry
I think you will find a much bigger 'silent mainstream' of those who Respect him for the significant progress he's brought into our world.
Worship and bashing/hate are the domain of the crazies/extremists/zealots who are a vocal minority, really a small proportion of the world. Most people thankfully are more balanced and rational in their perspectives.
Nissan was selling the Leaf after the Roadster but before the S/X/3/Y.
The Leaf and the 3 basically met in the middle at the same time at about the $45K price point for similar cars.
Tesla was only first in the category of outrageously expensive cars for virtue-signalling rich people who fake-care about evironmentalism. And fake self-driving.
I bought a top-spec 2015 LEAF for $33K before $10K of incentives. If someone paid $45K for a LEAF around the 3's launch, it better have had $10K in cash in the trunk.
Looked at another way, if the LEAF and 3 cost the same, would many people have bought the LEAF?
Similar cars? Sure, they both have four wheels and are electric. I don't see many similarities though.
Tesla's emergence put the world on track to end ICE cars at least a decade sooner. That is a lot of CO2 that will not be put into the atmosphere. Getting people with expendable income to fund it is both a smart strategy and very equitable.
Their recharge network still sets them apart as well.
But why? Did tesla open source key scientific innovations in the scaling of batteries?
Don't think so.
See e.g. The seres f5 from Huawei. I don't know wether it's great but about the main metric, it has a higher range than teslas (1000km)
Zoom out a little and try and think about the bigger picture.
In many industries, you can see these "bar-raisers."
Starbucks didn't invent coffee, but they created a mass market for a more premium sort of coffee in a country that previously didn't see coffee as something more that a thing you chug down in the morning so you can wake up.
Nintendo didn't invent video games, but they raised the bar for home consoles after the "great video game crash" and have repeated the feat several times since despite rarely if ever being on the cutting edge of tech.
And so on.
Tesla did something similar. Previously, electric cars and hybrids were seen as dorky and decidedly uncool by most. Tesla changed that public perception. It's hard to imagine the "luxury" electric car market existing without them. Perhaps another company might have accomplished the same feat, but Tesla was the first one to pull it off.
From a raw innovation standpoint, these advances are huge because by creating new market segments, they ensure a flow of money into those markets. Tesla's expense has paved the way for billions if not trillions of dollars into EV R&D and battery R&D. That matters, a lot.
This is a bit of a "why dropbox when i can rsync" comment.
Tesla brought glamour and practicality to a field stymied by boredom and theoretical concerns. They pledged to build an EV people would actually want to use, bringing all the latest tech to drive UX with no regard for tradition. They set to solve consumer problems, and they are succeeding in doing that.
Great drive UX as opposed to what? Have you driven a modern Mercedes of the higher price tiers? They're pretty damn great to drive or be driven in (comfort and fun wise), but they don't have gimmicks like the door thing and such. If you're talking about those gimmicks I disagree, and if you're talking about "motor/battery/esc technology" I also disagree, they didn't innovate anywhere, they just hit the right market with their product in my amateur opinion.
If they "hit the right market" it means that market had not been hit before, so by definition they've done something new.
I don't have an interest in Tesla nor do I particularly like Musk, but objectively speaking, they must have done something right - they started a mass-car company from scratch in the third millennium, something very very hard; they popularized a technology that had failed to get traction for decades, and have taken the fight to behemoth corporations that had been bearish on the sector's overall future since the '90s. That simply cannot be just marketing or "gimmicks".
Glamor? Sure. Practicality? Eh. Maybe for daily commuting. When the IC companies convert over, Tesla shareholders are going to feel a ton of pain. The novelty will have worn off and the company will still pace at a mere fraction of its competitors. And at the very least, they'll all have vastly better QC than Tesla.
The "supercharger" network is something that no other manufacturer was doing or was seriously interested in doing, and it's an extremely practical concern.
> When the IC companies convert over
... a lot of them they might well end up buying batteries from Tesla. Tesla will also continue to be the benchmark against what EV will be measured, in the same way Ford continued to be a reference for decades after competitors matched them.
The only people who buy a car for their median usage are people who can afford two (or more) cars.
Everyone else has to buy to cover the 99% pctile or they’re screwed when they need to do something somewhat unusual (long drive to grandmas house, move, vacation, family emergency, whatever).
And for those who say ‘just rent!’ - I’ve tried, and most of the times you’d want to, you can’t get a rental, because a bunch of other folks got there first! Rental companies can’t buy enough cars to handle peak usage a few times a year.
Yes, but people don't buy vehicles simply for commutes, and IC vehicles will be around for decades for actual work. Nobody along the gulf or southern east coast is going to be buying an electric car as their sole mode of transportation if they have any common sense.
If 90% of the time one can own a median vehicle wherein they never have to go to the gas station, the vehicle lasts 1,000,000 miles, they aren’t emitting CO2, and gas prices go past five dollars…
it might be common sense to use the savings from the situation to rent vehicles to satisfy the other 10% of your needs.
"Common sense" = "I want to be able to get out of town without being stranded on an interstate when evacuating for a hurricane when traffic comes to a standstill and there's no way to recharge."
But hey, maybe your idea of common sense is to sit around 16 feet in the air with 120 mph winds blowing against the side of your moving brick.
Tesla dragged the rest of the auto industry, kicking and screaming, into the EV business.
EV was, at best, a curiosity and definitely nobody's main focus, until Tesla first showed EV cars are not golf carts (with the rooadster) and then that they can be a desirable higher-class sedan (with Model S).
If Tesla went bankrupt today, we'd still be firmly on the path to phase out ICE cars.
This was totally unconcievable just a few years ago. Tesla did that.
> Tesla dragged the rest of the auto industry, kicking and screaming, into the EV business.
I would say that the advance in battery technology, the laws introduced by state of California and north european countries did more than Tesla ever did.
Also the Renault Zoe, still top selling EV cars in europe, had her first concept car showed in 2005 and was on sale only 5 months after the Model S in 2012. The Leaf also predates the Model S.The 1st generation Tesla Roadster sold poorly like most other contemporary EVs and most of the sales happened in her last year in 2012. It was as niche as all other EVs in the market in its first 3 years of commercial life. The Mitsubishi i-Miev and its Citroën and Peugeot variant outsold the Tesla Roadster by more than a factor of 10. Almost 30000 cars between 2008 and 2014.
What Tesla achieved was showing the wealthy people they could greenwash their way to the same energy wasting life by going EV. A good publicity stunt.
Zoe was a concept car, as was VW eUp. At the time, established car companies were doing concepts that looked like golf-carts and taking about "e-mobility".
Look at i-Miev and the Roadster and tell me which one do you think a typical car lover would love more. If you think that would've taken over the car market .. then you're definitely not in the same circles I am :-)
Other car makers started paying serious attention only when Tesla inexplicably didn't go under and Model S started to be a success.
The first Zoe was a concept car, the second one was a production model and it didn't popup from anywhere. It has been the most sold EV in europe for many years already.
>Look at i-Miev and the Roadster and tell me which one do you think a typical car lover would love more. If you think that would've taken over the car market .. then you're definitely not in the same circles I am :-)
The car industry do not care what the typical car lover love more. They have been a dying breed for more than 3 decades. The i-Miev and derivated counterpart sold 12 times more than the roadster because they are actually usable things and not enthusiast toys. It even outsold the Model-S in all the other markets than USA when they were both available.
The Model-S,X,3 and Y success came much later. The automotive industry definitely had a more cautious approach in the upper end segment but they weren't sleeping.
citation needed. many of these companies had documented plans to transition to primarily electric vehicles over a period of many years. why is it that you are so convinced that this market shift was causes by one brand? is there any evidence other than observation?
To answer your question, they did open source their innovations. In the future you should consider not asking rhetorical questions that you don't know the answer to. Also, when you don't know the answer, you probably shouldn't pretend to know. Other people might make the mistake of thinking you are informed rather than a productive citizen of the society which exists in your imagination.
As to why - ICE dealers didn't want to lose recurring revenue streams and ICE manufacturers didn't want to disrupt the means through which they would service the loans that they took out to build out their present ability to manufacture at scale. The incentives were perverse and in some cases still are perverse enough that the ICE industry has to be forced to help kill itself off, rather than dying willingly because it is right.
People constantly attempt to pretend Tesla didn't spark the EV revolution, because they can't stand to give Musk and or a US company credit.
It's the same reason they aggressively pretend Apple didn't spark the smartphone revolution (when it all very obviously derived from the iPhone and its dramatic impact, right down to the design of the phone and interface being copied by everyone else).
It's the same reason if you say the US invented the Internet here on HN, you'll get confused replies by people from outside of the US that are entirely ignorant of that fact, because of foreign revisionist history and the desperate desire to deny the US credit for its vast accomplishments (the America bad brigade). The same goes for eg the transistor, microprocessor and countless other prominent technologies that revolutionized the world.
It's still a business and it is tiny compared to the big players. Tesla is only a slightly better value than crypto given how insanely overvalued the stock is. If the company had an $80B market cap, it would still be vastly overvalued.
If Tesla had a market cap of $80B it would be trading at 6.06 times Q1 earnings annualized. Having grown revenue 81% and gross profit 147% in the prior year…
It’s currently undervalued at 10x that price.
Re being small: its operating income was greater than Toyota in Q1, and it has two new factories that are yet to ramp production.
Renault were working on the since before 2008 (2005 apparently), yet they only brought a product to market in 2012.
The Tesla Roadster was developed around the same time, yet deliveries started in 2008. By the time Renault got around to actually making the Zoe available to customers, Tesla had been selling the Model S for 6 months. I don't think they were taking EVs particularly seriously if they took that much longer to put out a less sophisticated product despite having vastly more resources at their disposal.
Sure, because the Tesla Roadster is half a car, and cost is no object. They literally took an existing car, and built an EV conversion kit, money be damned.
Making the first mass-market EV was going to take multiple years, no matter what. You need to engineer the entire car, at scale, and you need to hit a price-point. Tesla didn't have such an issue. I can't stress enough how much more difficult it is to make an affordable product than one where price is no object.
The revolution is in manufacturing and vertical integration: you have to look at margins. Tesla’s operating margin was 19.2% in Q1, and is apt to rise. Very few other companies even make a profit on their EVs, and none that do are anywhere close to Tesla’s margins, to my knowledge. This means that nominally competitive electric cars aren’t. In principle Tesla could squash its pure EV competitors by selling below their cost of production, and any legacy auto company transitioning to EVs will be in a similarly dire position.
Incidentally, these margins are also far higher than those of ICE manufacturers. For example, Toyota in Q1 had lower operating income than Tesla, despite having 4x the revenue.
There is no revolution to speak of. Tesla is an evolution in the high-end EV market. In the mid-range market Tesla was late to the punch and faces stiff competition, and in the low-end market they aren't an entity to speak of.
There's no competition in the mid/low cost market - there are no mid/low cost EV's. The leaf rides like a bottom end ICE compact and costs as much as a very nice ICE sedan, and not really that much less than a low end tesla. Honda/Ford/Toyota don't have anything in the EV space. They might have something on their web sites, but no dealer will have them in stock.
Of course there are low end EVs. The Wuling Mini EV (which is the worldwide best seller iirc) can be had for 10,000$ with 200km of range. Also, at price of a Leaf or Zoe, you don't get a high end sedan, you get a Honda Civic, which is one of the cheapest sedans.
iPhones are in the low-end market because you can buy them used at reasonable prices. You can get an iPhone SE 2020 for less than 200$. You can't get a Tesla used for 5000$.
I'm not saying this as a Tesla-lover nor as a fan of Musk, in fact, as a lover of gasoline engines and of cars in general I see this as a tragedy (I regard EVs as refrigerators with some wheels attached), but it is what it is.