Tesla’s survival hinges on success of Model S electric car

Tesla is on the fast track toward an IPO and is betting future success on the upcoming Model S electric car. Companies like Toyota and Daimler are investors and customers, and they are already coming to Tesla with requests to build components for their vehicles. But what makes Tesla different from other car companies and why would anyone want to invest in it?

CEO Elon Musk is quick to point out that Tesla is not a car company . . . even though it’s building electric cars. Those cars may be the end result but he’s focused on branding Tesla as a tech company. Most of that is likely marketing spin but there seems to be some truth to it as well. From a marketing perspective Musk doesn’t want you to think of GM, Ford or Toyota and group Tesla in with them. Instead he wants to associate his company with the likes of Google and Microsoft – huge companies that are still seeing success where other industries are suffering.

There’s more than marketing spin too. Tesla is obsessive about manufacturing everything within its own facility in California to control quality and is equally as interested in innovation through expert engineering. Car companies like Toyota and GM like innovation too but they also have years of tradition and existing processes that may slow down any sort of significant changes.

Right now Tesla is building Roadsters but it plans to stop production of those soon. They were a prototype vehicle for the rich, who certainly provided feedback. It’s an amazing vehicle and in parallel financially way out of reach for the average driver.

That’s where the Model S comes into play, which will price out just under $50,000 after a Federal $7,500 tax credit. Closer to affordability but still a challenge for many. But the Model S stats are compelling:

• 300 mile range
• 45 minute QuickCharge
• 0-60 mph in 5.6 seconds
• Seats 7 people
• More cargo space than sedans
• 2X as efficient as hybrids
• 17 inch infotainment touchscreen

It will support a computer as “. . . powerful as a MacBook Pro”, according to the San Francisco Chronicle and it will allow developers to create apps that will interact directly with the vehicle. Considering the rampant growth of the Apple iPhone app store and Google’s Android app store there’s a world of opportunity there. Cheers to Tesla for stirring up the industry with old ideas made new again.