Every major car manufacturer is now working hard on their versions of fully electric cars after seeing Tesla’s success.
But, all these cars are very expensive, at least for the common man. What made me excited was the launch of the affordable $35,000 ‘Model 3’. Tesla’s ‘Model 3' preorders equaled $7.5 billion worth of sales on day 1. That’s the same day they launched the all-electric mass market car, even before any customer could test-drive it.
The initial success of the Model 3 has demonstrated the consumers affinity towards electric cars. Now everybody wants one. Moreover, as I am writing this article, Tesla’s Model 3 orders have already crossed $10 billion.
To add to the success of the Model 3, the company has already built a ‘Giga Factory’ to produce the lithium ion batteries needed for all these cars. The electric-car maker estimates that the $5 billion factory will boast lithium-ion battery production that by 2020 will exceed the entire world’s 2013 lithium-ion battery production.
The factory, Tesla says, is necessary for the company to bring the economies of scale to batteries that will enable Tesla to launch an electric vehicle at half the price of its Model S by 2017, one that will be disruptively aimed at the mass market.
Citing the Gigafactory among the key reasons, Morgan Stanley analyst Adam Jonas is calling Tesla “the most important car company in the world."
What do you think this will do for Tesla Stocks? Tesla stock has jumped to a six-month high with 1-year returns at 29.92%
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Amit is an Independent Financial Advisor, based in Dubai since 1997. He is part of the prestigious ‘Million Dollar Round Table’ (MDRT), which is an elite club of the best financial advisors worldwide. He has authored the ‘6-Step Financial Success Guide’, and the book ‘Creating, Preserving, Distributing Wealth’. He helps business owners and professionals ‘Create A Second Income’ through investments.