Venture: Tesla Expanding
Patrick Pleul/dpa-Zentralbild/ZB
The fight over fuel is shifting from oil to electricity. September 22 was Tesla’s ‘Battery Day,’ where the firm announced their partners for long-term, battery-related supply and development contracts. Tesla also unveiled new manufacturing locations worldwide, aiming to increase production globally to meet consumer demands.
Tesla has become a household name in the US, in large part due to constant media attention. Tesla stock has also received increased investor attention throughout the pandemic, with record highs, a stock split, and controversy. Increased speculation and Musk’s ‘cult of personality,’ has helped build momentum for a firm focused on innovation based growth.
With innovation at its center, Tesla is now seeking ways to reduce built-in costs. Musk has stated the firm is aiming to address customers wanting a more affordable option. The key factor in dropping price? Finding more efficient ways to produce batteries and source the requisite raw materials.
Expansion
Tesla is developing a so-called biscuit tin battery, a novel cylindrical lithium-ion battery cell. Kyle Hyatt, a reporter for Roadshow, stated “The most significant change happens inside the larger cell canister and involves removing the tabs that act as the positive and negative connection points between the anode and cathode and the battery casing.” The important takeaways here for laymen: an increased range of 16% and lower production costs.
Future Battery
Lowering innate vehicle cost through these battery developments has big implications. With these cost-Cutting developments, Tesla hopes to produce a $25,000 electric car, which could allow the firm to become a leading auto manufacturer. Tesla has always had an eye on mass production, and now Musk is predicting production will reach 20 million cars per year. For reference, that is almost double the amount of cars sold by Volkswagen in 2019.
Vertical Integration regarding the new cell technology
Tesla has also released the Model S Plaid, which will have a range of 520 miles, top speed of 200 mph, and ‘0-60’ under 2 seconds. This performance model seeks to attract drivers looking for a ‘sportiness’ normally reserved for combustion engines. Additionally, Tesla continues to work on the Cybertruck roll-out. Unveiled earlier in the year, the truck has roughly 600,000 ‘preorder’ applications, which are placed with a simple $100 refundable deposit. This has left many to view Tesla’s ability to produce and customers’ intent to actually purchase with skepticism.
Cross Section of Battery
Challenges
With expansion comes myriad issues that Tesla will have to address if they hope to keep consumer trust and favorable speculations. One of largest being a lack of charging facilities nationwide with many consumers not within a reasonable distance of a station. In densely populated areas there tends to be a satisfactory level of access and availability, but in large rural swathes of the country, where the distance to travel is often great, there is a dearth of stations. Some Tesla owners from the Midwest have even sold their Teslas, claiming they were often unable to reach their destinations without returning home to charge first, other users stating they have “spent more time charging than driving.” The solution to this problem is quite self-explanatory: a greater investment in charging infrastructure. However, this was left unaddressed on ‘Battery Day.’ Regardless, Tesla has retained a large market share, delivering 180,000 cars in the first six months of 2020.
Final Thoughts
Musk’s belief in Tesla’s growth is palpable. In the past he has shunned remarks suggesting he be satisfied with Tesla’s status as a luxury car brand. Instead, Musk has pursued a vision of global expansion and change, investing profits back into the company and bringing Tesla public. Tesla’s stock performance is indicative of the public’s confidence in his mission, at least from a financial perspective. Gas is on the way out, and electric is becoming a cheaper option thanks to Tesla. With California recently announcing a ban on the sale of new gasoline vehicles starting in 2035, Tesla has to med their expansion brilliantly. This step by California will likely be mimicked by other states as climate change becomes a more frightening reality. The Governor of California stated “this is the most impactful step our state can take to fight climate change,” and as the government begins to fight climate change with policy many more may seek to join the fight as a consumer. And Tesla will be waiting.