Tesla is best known for desirable, high-performance cars and, more recently, for a very large battery in South Australia.
But after all the glitz and hype, why is this technology company that still hasn't made a profit worth over $70 billion?
Tesla’s largest shareholder is its founder, Elon Musk. He’s made his fortunes previously through investing in technology startups. He was even an early investor in the company that went on to become PayPal.
In 2003, Musk used his wealth to invest in a technology company that’s driven to improve the efficiency of electric cars - Tesla.
In 2006, Musk said that his goal was to create a solar electric economy, moving away from a ‘mine-and-burn hydrocarbon economy'1.
Tesla began by creating desirable, 100% electric sports cars that could perform as well as models made by Ferrari and Porsche. It’s been almost 10 years since the release of the Tesla Roadster, which cost more than US$100,000. Tesla now produces electric cars that sell for US$35,000 in the US, making it more affordable for the general population.
In the process, Tesla has improved engine efficiency, increased the range of cars, created batteries that last almost five times longer than previously possible, and set up a large network of solar recharging stations across the US. Tesla has also developed the ‘powerwall’, a bank of batteries for homes to store energy from renewable sources, allowing households to use solar energy they generate at night.
Musk personally made South Australian Premier Jay Weatherill an offer almost too good to refuse in July after blackouts through the state last summer. The promise was the delivery of a 100MW battery storage unit which would be enough to power 30,000 houses for up to 1 hour 20 minutes, all within 100 days of the contract, or have it for free. Despite being the world’s biggest battery, this is unlikely to prevent blackouts on hot days, particularly if wind generation is low.
Not satisfied with the success of Tesla sports cars and batteries being sold to governments around the world, Tesla now owns and runs 'SolarCity'. SolarCity has developed solar roofing tiles that look like conventional roofing tiles but are also solar panels. Manufacture and delivery of these tiles in the US is due to start in 2017 and Australians could possibly have access to them as early as the beginning of 2018.
This article is general information only. Readers should consider getting financial advice before making financial decisions.