In June 2012, Tesla began deliveries of their flagship car, the Model S. This fully-electric full-size luxury sedan was met with intense scrutiny by everyone from Wall Street analysts to Prius drivers. Since its launch, and despite Elon Musk’s contention that this is an evolution, the car re-sparked an electric revolution by eliminating the stigma of EVs as second-class vehicles, and through proving that electric does not equal compromise.
Within five years, Tesla has innovated and progressed more than any other auto manufacturer, leading battery development, pioneering fast-charging technology, bringing the most advanced driver assistance features to the market, and experiencing growth of multiple factors. From changing the name of the company to having a completely refreshed product lineup, a lot has changed since the days of the 40 kW battery pack. On two different fronts, business and product, Tesla has validated itself in the market.
Tesla vehicles are a component of the first truly digital transportation platform, and beyond the potential for integrating applications with the platform, this means one very unique thing: The Tesla you buy today will not be the same in a few years. Similar to your smartphone, Tesla vehicles undergo constant software updates that improve many aspects. For example, that Model S 85 you purchased with one camera and trivial driver assistance features? Now that very same model can go hundreds of miles on the highway without human interaction. That Model S 70D you purchased with a 5.9-second 0-60 time? Now you’ll get there in 4.4 seconds.
It is mind-blowing how Tesla’s fleet has progressed in just a few years. Tesla has increased annual production run rate by nearly an order of magnitude, from 10,000 units in Q4 2012 to 88,000 units in Q2 2017 and have added two new models to their fleet, the flagship Model X SUV and the smaller sized Model 3 sedan. Comparatively, since 2012, Ford Motor Co has increased annual production figures from 2.25 million to 2.615 million, an 18% increase.
Along with enhancing their vehicle lineup, Tesla has introduced new products in the energy space. In 2015, Powerwall and Powerpack, rechargeable lithium-ion battery stationary energy storage products were released. For the first time, Tesla made a big play in the consumer energy space. Since the initial release, Tesla has refreshed these products with the “Powerwall 2”, more than doubling the total kW capacity. Tesla also announced plans to pursue a solar roof, with the aggressive goal of making it cheaper and more durable than the current solutions.
Tesla has understood that in order to compellingly market electric vehicles, they need to offer charging that is fast and convenient. Without such infrastructure, those looking to travel long distances in their electric cars are in for a long journey. Five years ago, Tesla broke ground in the development of their fast-charging network. These Superchargers were capable of delivering 120 kWh between two adjacent vehicles. Since then, advancements in technology have allowed Tesla to increase this power level first to 135 kW, and more recently to 145 kW. Over the last five years, Tesla has gone from having one station to now 1000 stations with 7000 chargers available globally. And Tesla has proposed to more than double this in the next two years, increasing the number of chargers in some urban areas by more than 3-fold.
And not only are you able to charge faster and more conveniently than in 2015, but you need to charge less. Tesla introduced the Model S with three battery size options: 40, 60, and 85 kW. Walk into a Tesla showroom today and you will only find models with 75 and 100 kW battery packs.
Tesla has been working on incrementally increasing the functionality of their driver assistance features since the Model S’s release, and since 2014, Tesla has introduced two new hardware suites. From having one camera and 16 feet of surround sonar, new models come equipped with 8 cameras, 360* radar, and 25 feet of surround sonar. Teslas purchased with the enhanced autopilot and full self-driving packages will be able to drive, charge, and park by themselves in the future through over-the-air software updates.
When Elon Musk drafted his first Master Plan, the high-level idea was simple: Release an expensive sports car to prove that EVs can be cool. Then, bring this technology to more people through a flagship sedan at a slightly lower price point. The latest step, bringing this to the mass market through an affordable option. At first, this seemed like an overly bullish prediction of Tesla’s potential. However, this plan has almost reached fruition and Musk has already outlined his next steps in “Master Plan, Part Deux”.
So what’s planned to come? Expand further into the energy space, introduce two new vehicle Models (an affordable SUV and a pickup truck), unveil a Semi truck and enter the freight space, increase auto-pilot safety by an order of magnitude, and, finally, dominate the intra-city mobility space, effectively “Ubering” driverless Model 3s when the owner is not using them. And if the execution of Master Plan Part Deux is similar to that of the first part, we can expect to observe Tesla reach these milestones.
Beyond how Tesla as a company has changed, they have done a lot to catalyze change in other industries. A lot of great implications of Car 2.0 will emerge in the upcoming years, but already we can see the benefits for consumers in regional travel. A combination of the electric drivetrain, big batteries, emerging autonomy, deep connectivity, and super-charging infrastructure has squashed the cost per mile of operating vehicles by more than 4 times in high usage scenarios.
For a lower price, you can get a better travel experience, since the service providers are working with transformative economics. Such is the case of Tesloop, where travelers can commute between cities such as Los Angeles and San Diego in a more convenient and productive manner for less than the price of a train ticket. This means a couple things: transportation will become a lot more convenient for more people, and car ownership will decrease as vehicle utilization increases. This is due to the unprecedented longevity of EVs, the drastically reduced fuel cost and, most importantly, the ability to remotely control/monitor every aspect of the vehicle through APIs. While EVs were inherently trending towards this state, Tesla brought it to the market first.
Tesla has forced other companies to generate new plans around the deployment of electric vehicles. “Within 10 years” and “in the near future” jargon no longer sticks - other manufacturers now provide concrete timelines, such as Volvo’s promise to only sell EVs by 2019 or GM’s plan to add at least 100 EV models by 2023. BMW recently announced that they would have 12-13 fully electric vehicles on the market by 2025, concurrent with Land Rover/Jaguar’s announcement that they would only have hybrids/EVs by 2020. Over Twitter, Elon Musk was asked if he prompted Daimler-Mercedes to invest $10 billion towards EVs with a single tweet. He responded, “Yes, I did :)”.
It is hard to argue that Tesla hasn’t stolen the center of attention in the automobile space. The combination of sleek cars, technological advancements, and rapid growth has let Tesla dominate the majority of automobile news. However, behind the massive amount of press circulating Tesla, there is a pivotal transformation happening. Even at a small scale, Tesla has changed the way the big dogs play the game.