Gangbuster Tesla

Tesla trading at record levels and surpasses General Motors and Ford in market value.

Tesla trading at record levels and surpasses General Motors and Ford in market value.

Tesla CEO Elon Musk.

TESLA’S shares are trading at record levels and it has surpassed General Motors and Ford in market value. It’s about to introduce its first mass-market electric car, the Model 3 sedan, as well as a line of solar panels that look like roof tiles.

CEO Elon Musk is also enticing fans with new vehicles, including a semi-truck it plans to show this fall and the Model Y SUV, which he said will go on sale in 2019.

But the company is not without its challenges.

Corporate structure:

Shareholders voted to continue electing Tesla’s board members to three-year terms, rejecting a proposal to elect them annually. A group of Connecticut pension funds had called for annual elections, saying it would improve accountability. But shareholders sided with Tesla, which says its mission requires long-term strategic planning and three-year terms ensure that board members are not distracted by short-term returns.

Model 3:

The Model 3 is Tesla’s first non-luxury sedan, with a starting price around US$35,000. Production is on track to start next month and Tesla is aiming to make 5000 Model 3 sedans a week by the end of this year and 10,000 a week in 2018.

Tesla has not said how many people have put down $1000 deposits but Musk said people who put down a deposit now will not get a car until the end of 2018, indicating it could be close to 500,000.

The company’s vehicles have often faced delays getting to market. Musk says the Model 3 is much simpler to make, but 14-year-old Tesla has no experience producing and selling vehicles in high volumes.

Bigger rivals like GM, Volkswagen and Toyota routinely sell more than 10 million per year.

“It’s crazy hard to make cars,” Musk said.

“There’s 10,000 unique items and it only moves as fast as the slowest item.”

Even if the Model 3 is on time, servicing all those vehicles will still be a challenge. Owners are already worried about having to share charging stations with an influx of new cars. While Tesla is promising to increase its network of stores and service centres, it began 2017 with just 250 centres worldwide.

Musk says a new fleet of mobile service trucks will be deployed to help customers who are far from service centres.

Competition:

Until now, Tesla has owned the market for fully-electric vehicles that can go 321km or more on a charge. But that’s changing. GM beat Tesla to the mass market with the Chevrolet Bolt, a US$36,000 car that goes 383km on a charge. Audi plans to introduce an electric SUV with 482km range next year. Ford will have one by 2020. Volkswagen plans more than 30 electric vehicles by 2025.

Mercedes and Volvo — not to mention tech companies like Google and Uber — can match Tesla’s efforts to develop self-driving vehicles. And they have deeper pockets. -AP

TESLA’S shares are trading at record levels and it has surpassed General Motors and Ford in market value. It’s about to introduce its first mass-market electric car, the Model 3 sedan, as well as a line of solar panels that look like roof tiles.

CEO Elon Musk is also enticing fans with new vehicles, including a semi-truck it plans to show this fall and the Model Y SUV, which he said will go on sale in 2019.

But the company is not without its challenges.

Corporate structure:

Shareholders voted to continue electing Tesla’s board members to three-year terms, rejecting a proposal to elect them annually. A group of Connecticut pension funds had called for annual elections, saying it would improve accountability. But shareholders sided with Tesla, which says its mission requires long-term strategic planning and three-year terms ensure that board members are not distracted by short-term returns.

Model 3:

The Model 3 is Tesla’s first non-luxury sedan, with a starting price around US$35,000. Production is on track to start next month and Tesla is aiming to make 5000 Model 3 sedans a week by the end of this year and 10,000 a week in 2018.

Tesla has not said how many people have put down $1000 deposits but Musk said people who put down a deposit now will not get a car until the end of 2018, indicating it could be close to 500,000.

The company’s vehicles have often faced delays getting to market. Musk says the Model 3 is much simpler to make, but 14-year-old Tesla has no experience producing and selling vehicles in high volumes.

Bigger rivals like GM, Volkswagen and Toyota routinely sell more than 10 million per year.

“It’s crazy hard to make cars,” Musk said.

“There’s 10,000 unique items and it only moves as fast as the slowest item.”

Even if the Model 3 is on time, servicing all those vehicles will still be a challenge. Owners are already worried about having to share charging stations with an influx of new cars. While Tesla is promising to increase its network of stores and service centres, it began 2017 with just 250 centres worldwide.

Musk says a new fleet of mobile service trucks will be deployed to help customers who are far from service centres.

Competition:

Until now, Tesla has owned the market for fully-electric vehicles that can go 321km or more on a charge. But that’s changing. GM beat Tesla to the mass market with the Chevrolet Bolt, a US$36,000 car that goes 383km on a charge. Audi plans to introduce an electric SUV with 482km range next year. Ford will have one by 2020. Volkswagen plans more than 30 electric vehicles by 2025.

Mercedes and Volvo — not to mention tech companies like Google and Uber — can match Tesla’s efforts to develop self-driving vehicles. And they have deeper pockets. -AP

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