Jacob Sidelnikov Professor Williams Microeconomics 12/1/2017 An Electric Revolution Elon Musk’s Tesla is heard about everywhere starting from the news, articles about redefining the American car industry, and with various technological advancements. This company transformed the electric car from a device for the environmentally conscience to a mainstream automobile. Even though the Tesla Roadster was not the first electric car ever made, it resulted in a shift in consumerism from gas powered vehicles to electric power ones. (The first electric carriage was made by Robert Anderson in 1832 in Scotland.) https://auto.howstuffworks.com/fuel-efficiency/hybrid-technology/history-of-electric-cars1.htm The company founded in 2003 did not start …show more content…
Their second model was called the model S and was more affordable since there was an increase in competition from companies such as Chevrolet and Ford, who were releasing cheaper electric cars, such as the Chevrolet Volt which had a price tag of $35,000 https://www.caranddriver.com/chevrolet/volt. https://www.theverge.com/2017/7/31/16068044/tesla-model-3-vs-model-s-chevy-bolt-electric-car-price-featuresThe Model S also, a sedan was cheaper than the original Tesla Roadster and competed with other electric cars at the time having a having a price tag of $69,000.https://www.caranddriver.com/tesla/model-s The model S is still very popular today and is considered Tesla’s most popular model. http://www.hybridcars.com/tesla-model-s-is-worlds-best-selling-plug-in-car-for-second-year-in-a-row/ After the success of the model S, Tesla started to develop various other models to increase their profitability and scale. Their new economic model, starting back in 2015, focused on elasticity, fair pricing, and incentives to increase sales. As most corporations, Tesla wanted to be able to accommodate most types of income to reach as many customers as possible. This caused Tesla stock price that is traded on the NASDAQ to go up. Currently the price of their stock is worth $307.01 with the ticker …show more content…
https://electrek.co/2017/11/01/tesla-model-3-production-delays/ Tesla produced only around 25,000 Tesla model S were being produced in the third quarter of 2017. This is low because GM produced 252,813 non-electric vehicles in a year and tesla production is half of that. Even with this low production Tesla dominates the market for electric cars for their size. http://www.gm.com/investors/sales/us-sales-production.html Tesla is investing in a new factory that will be almost fully robotized. This facility will bring down their costs and provide more cars each year. This goal is modeled on the economies of scale since this new facility is much bigger, and requires less human work. Their projections for the amount of cars they will be able to produce in their new facility is around 100,000 cars a quarter and not 25,000. https://www.tesla.com/gigafactory This shift in production will cause Tesla to increase their market share because most people today when buying a car do not want to wait in line for two years to receive one. If they are able to increase production four fold they will be able to cut the wait list or remove it entirely causing a huge growth in their market