By Vince Ward
As many of you may know, Tesla is the leading company involved in the production of electric power cars. They have started to create a profitable company in an industry that is hard to do well when using unconventional mainstream methods. Tesla has persevered and shown that they are more than capable at leading in this fast growing industry. Tesla pushes the car industry to new standards and in a direction that will help solve the problems that come from the standard gas powered cars.
When looking at Tesla there are two mains things to pull away from the company. The economy it creates in this new branch of automotives, and the advancements in car technology standards in creates not only in electric cars but also tradition gas powered ones as well. Let’s kick it off with the economic effects of Tesla. According to Business Insider, “Tesla's $56 billion market capitalization is greater than Ford's ($42 billion) and close to General Motors' ($58 billion), two companies that are more profitable and better at building cars”. This says a lot about Tesla’s accomplishments. They are able to be comparable to two car companies that run the industry. General Motors owns many other car companies, which include: Chevy, Buick, GMC and hold controlling stock in many other car companies. What I’m trying to say is that they are a very large company with their products still largely gas powered, and Tesla is right up there with them. Now, market capitalization is not the profits generated by a company but rather the value of company through the stock market in short terms. Lots of people believe in Elon Musk and his vision with Tesla which is why the company has become so booming. Tesla has created a wave that has lots of large car manufacturers investing heavily into the electric business. This is good for the consumer because the prices on electric cars are not cheap, which creates competition and increased effort on research, so the price of these cars will fall, which will help form an even greater market.
The market that is almost appeared out of thin air is very good for the environment and even other gas powered cars. Since electric cars are so technologically advanced, car manufacturers have made every aspect of the vehicle like a smart device. From large media displays, advanced cabin air filters, to autopilot, Tesla’s car are cutting edge vehicles, and all these features come standard in each vehicle. Tesla just increases the standards of what should be provided in every car, showing what is really capable for a car.
Finally the most important part about Tesla. Their cars are electric. In today's world, air pollution and global warming, among many other things, are very huge issues. With Tesla's cars, very viable alternatives in price and production to gas powered vehicles, roads and cities will start to become more eco friendly. Plus electricity can always be produced for these cars while we can only make so much gas with our resources. The problem is, Tesla’s cars have a higher price tag ranging from $70,000 all the way up to nearly $140,000. While this is out of the price range for many consumers, it is getting close to being affordable for all. With all the major companies investing in electric cars, production and resource costs will go down, sooner or later bringing this price in manageable range. Someday gas powered cars may be frowned upon and everyone will be driving cars of the future. When you go to buy your future car, what will you be driving?
Works Cited
/pages/Aparna-Narayanan/1540664736146509. “Electric Cars & Auto Industry: Can Tesla, GM And Other EVs Make Profits?” Investor's Business Daily, Investor's Business Daily, 21 May 2018, www.investors.com/news/electric-cars-ev-costs-tesla-gm/.
Hawkins, Andrew J. “How Tesla Changed the Auto Industry Forever.” The Verge, The Verge, 28 July 2017, www.theverge.com/2017/7/28/16059954/tesla-model-3-2017-auto-industry-influence-elon-musk.
Matousek, Mark. “Tesla Has Transformed the Car Industry - but Its Biggest Strength Could Become Its Greatest Liability.” Business Insider, Business Insider, 12 Feb. 2018, www.businessinsider.com/teslas-influence-on-the-auto-industry-2018-2.
Tesla's electric cars are surely the best current option for an electric vehicle out there in terms of efficiency, but not many can afford to spend $70,000-$140,000 on a vehicle. To be fair, the vehicles do come equipped with large media devices, advanced air filtration systems, and an autonomous driving feature; things not many other cars can do. That being said, no one knows how much the price of Tesla vehicles will drop in the upcoming years. Many people are investing into Tesla due to their competition with Ford and General Motors, two industry superpowers. If Tesla continues to rise at the rate it is currently, they will surpass both Ford and General Motors easily.
ReplyDeleteTesla is a very interesting company because of their uniqueness. They have allowed a great start to the electric car industry. By making the cars eco-friendly, it helps out the economy. If all cars were as eco-friendly as Tesla, the government would likely not have to do maintenance and repairs on roads as frequently. I would have to disagree that Tesla is good for the consumer. I think that because of how unique they are and how far away they are from any other competitor, the company is using the consumer in their favor. If Tesla is the only good quality eco-friendly electric car, Tesla has the right to put a high price tag on it. People will also be willing to buy the cars at a high price because of the name and brand.
ReplyDeleteThe electric car industry, and Tesla especially, is a huge step for our country and others around the world. Because of Tesla’s success in the electric car industry, it is pushing other companies to invest more money towards alternative fuel methods and building electric cars. While one day this will be great for our environment, it will significantly hurt the economy. Oil and gas are a huge money maker in our economy, and while they will still be used in other capacities, it will lose the biggest buyer in its market, which is the automotive industry, and the United States being one of the largest oil suppliers in the world, will take a hit as the world switches over to electric powered cars.
ReplyDeleteEven though you explained that Tesla’s will be coming to a more affordable price range it still doesn’t mean that the world isn’t going to still use the cheaper option of gasoline fueled cars. This is mainly due to the fact that many countries would have to build new electric “gas” stations and also electric components within their consumers own houses in order to keep the car fully charged. We also will have to consider the taxes and pricing of the electric bills that would surely increase in the case of a new electric powered car. Though it would be amazing to end all the air pollution and usage of nonrenewable resources, it will just be harder for the economy to support such a change in transportations. Would the US be able to support this change?
ReplyDeleteAgastya,
ReplyDeleteI agree with Vince that electric cars are becoming more popular and have an environmental benefit. The environmental benefit is in jeopardy though. Gas powered cars burn fuel while driving. Electricity is generated by burning fuel in a power plant. Both things burn fuel but I do conclude that the burning of fuel on a power plant means that the by-products and remnants of the burnt fuel can be reused again minimizing the negative climate impact. Tesla’s have electric motors and a battery that saves a lot of space than the conventional engine. Tesla uses this space to add advanced devices like medical grade air filter, giant display screen, storage in the front of the car, and etc. When I grow up, I personally would buy an electric version of a BMW, Rolls-Royce, Jaguar, or a Lexus. These brands have a great reputation and their cars are more reliable than Tesla. Tesla’s car have been reported to have troubles in their autopiloting systems and their falcon wing doors make it a cumbersome experience to grab something quickly from the back seats.
I like how this article is explaining how Tesla has made such an impact. I agree that in today’s society, that we have environmental problems with air pollution, global warming, etc. But many people also believe for this new car, that there are also some flaws that could make a huge impact in the human population. Tesla has also advertised saying that you can drive on “autopilot” (which has been stated) without even holding on to the wheel. Most people believe that when you let go of the wheel, that car “will do its thing” driving all on its own but throughout the years since Tesla has made a huge impact economically, there has been so many accidents from believing that the autopilot will 9/10 save your life.
ReplyDeleteI agree with your notion that Tesla has made an impact on the car industry in both exclusivity and cost. In the future, however, more cars will be bridging the gap, if you will, to an electric power base. How will Tesla be able to stay different while upholding its design nature. Another thing that might inhibit Tesla's exclusivity is how other car producers (Ford, GM, etc.) are lowering or keeping the cost of their units while extensively offering more and more in each of their models. My question is: How will Tesla keep this trend as more and more car companies start to make their upgrades?
ReplyDeleteTesla has most definitely made an impact on the automotive business. As of right now they are very advanced and very expensive due to their luxury features, but in the long run other car companies will work to make their cars just as advanced and luxury as Tesla's. I wonder if there will be a new car company who will enter the industry and become the new Tesla and take their costumers? I also wonder if Tesla's will eventually take over the automotive industry since if they keep updating their new models and the technology they will become more wanted, also if they are a lower price more will be demanded since it will be more affordable for some. This was a very interesting topic!!
ReplyDeleteNice job Vince! As you explained pretty well, Tesla cars are very costly. They can be considered a normal good because as consumer income increases, the demand for Tesla cars increases. People are more willing to buy these cars is they have more surplus. What's interesting is how great and efficient electric cars are for the environment but not so much economically for the consumer quite yet. With these cars being so costly, it is super hard for consumers to make the switch to electric cars because they simply don't have the money. Also,Tesla does very well in their non-price competition with other firms in the automobile industry, as seen with many oligopolistic firms. Since Tesla holds 25% of the market share, they obviously do a great job advertising since their earnings are so great.
ReplyDeleteI agree that Tesla has a big impact on the economy especially since it is a new experimental type of technology that people aren’t sure of yet. One thing that you didn’t mention that relates to this is Tesla’s impact on the stock market. Tesla’s stock is expected to have it’s ups and downs like any normal company but it hasn’t fallen since October. Many traders have been short selling it with the expectation that it will fall soon, but it has stayed high for a very long time. This shows that people are starting to trust this new technology.
ReplyDeleteI agree that Tesla has a large impact on the economy, as they have developed so much new technology and even influenced other companies to make electric vehicles as well. Tesla developed and sold the first self-driving car, in 2016 and that changed the self driving car idea from science-fiction to reality. Also, Ford and Audi are beginning to focus more on self-driving cars and self-driving cars and in Fords case, even stopped producing some of their existing cars in order to focus more on new technologies. Tesla is definitely changing the economy through competition and with their newly developed technology.
ReplyDeleteI can agree with the fact Tesla is destroying the stock market in sales for electronic vehicles, not only that, but people doubted the company staying high up in trusting the real advances of what these cars do. A downside for the market would have to be the pricing. It also could be very hard for citizens to switch from a gas powered car to electric, because of how much the cost is for the car itself. Most people would need to stay with gas to keep their income steady, and not in debt of any sort of money amount.
ReplyDeleteI’ve noticed how popular tesla’s are getting now a days which is surprising. Everyone seems to want a tesla but it is crazy how expensive they are. Although they do really help the environment, I don’t think they will ever really be accessible to everyone. They are still a luxury car and if you think of luxury cars right now such as audi or lamborghini, not a lot of people are able to afford these cars. I think gas powered cars will still continue to be more popular because those are the cars everyday people are able to afford.
ReplyDeleteLuke Lochner
ReplyDeleteTesla’s cars are not only gaining money from selling their cars to consumer, they are helping reduce the amount of money needed to help the environment with air pollution and other types of environmental issues involved with gas powered cars. Those are the aspects of how they are helping reduce costs. There are also reducing the amount of money spent on gas by consumers. Then again, the consumers are now spending it on electricity. The question is, what is more expensive for consumers in the long run, buying the more expensive car and have to pay for electricity or buying the cheaper car and spending their money on gas?
I think that Tesla has done a good job of standing out as a very innovative company among the many others that sell a similar product. This has led to it building up a distinct reputation, which is what has primarily caused the brand to be so successful and impacting on today's economy. However, price is also a prominent factor, which is what gives competitors an edge in the market, like with anything else. It's interesting to view this topic from a purely economic standpoint.
ReplyDeleteTesla’s growing popularity just goes to show that the demand is increasing for electric, “smart” cars. Also, in my opinion, since Tesla does have such a high price point, the cars are seen as a status symbol, with many celebrities now buying Teslas which makes people want them even more. However, I hope that Tesla does become more affordable for the average person because I think that electric cars becoming more common would monumentally help out the environment and maybe in the near future less people would have to buy gas and could just charge their car.
ReplyDeleteWith the expensiveness of the cars at the moment, it is almost creating a social divide as the wealthy are able to buy them and use electricity instead of gas, but the less well off are remaining with the less environmentally healthy ones. With this social divide, it is seen as a status marker, but also it can push the gap even wider. The wealthier suburbs and cities will become more "environmentally healthy" potentially leading to government grants or more people moving in. Unfortunately, the poorer places will remain in unhealthy conditions and without more technology, their situation will be perpetuated further. This gap may increase if the price of "safer" cars isn't brought down. Overall, with only so many people able to afford cars from $70,000 to $140,000, it isn't changing soon.
ReplyDeleteAs Vince stated that Tesla prices are expected to go down, but that still doesn’t eliminate any reason to use a cheaper and more affordable alternatives of gas-fueled cars. Although there would be an increase of competition in the electric car market, when prices are lowered they still will be extremely high to make up for the materials used to make the cars themselves along with the workers and the assembly of the cars. Tesla’s like most cars are normal goods where the consumer purchases/ or the demand of Tesla’s will increase as the consumer's income increases.
ReplyDeleteWhat Tesla is doing for the environment and for the future is good in terms of air pollution and alternate energy resources, but it's not all that great. Let's take a minute and explain what Tesla is doing to the economy, because we already know about their environmental friendliness. You mentioned that the price of a Tesla car, similar to most 100% electric vehicles, is between 70 and 140 thousand dollars. I agree with your statement about that being too high for most people, and if what you're saying is true about their cars becoming more affordable, more people will buy electric cars. For now, the price of an electric car like a Tesla is too high for what people care about the environment. I know it is brand new technology and will develop over time and become cheaper, but most people aren't willing to spend almost a year's worth of income on an electric car when they could purchase an eco friendly gas powered car instead for less than half the price. Also, think about what this new source of power would do to oil companies and gas stations in the future. Would it hurt the economy if oil companies were no longer allowed to produce oil for gasoline, and would companies like Kwik Trip go out of business?
ReplyDeleteOn the contrary, Tesla has been privately funding the addition of charging stations to gas stations. This will return gas stations to about where they were before. Given the fact that they're pulling the crude oil out of the ground before refining it and then having to pay for transportation, I doubt that gas stations actually make all that much off of the actual sale of gasoline. Instead, most of the money gas stations make is likely in car washes and in store sales rather than the actual sale of gasoline and the fact that Tesla is privately funding the addition of these charging stations rather than having the gas stations pay for them means that they're perpetuating the current income of gas stations, rather than shutting them down as you insinuate. Furthermore, in states like Wisconsin, where 71.9% of our electricity is produced through the burning of coal and natural gas (https://www.eia.gov/electricity/state/wisconsin/), it is unlikely that an electric car is actually that much better for the environment, and should our energy consumption increase without investing more in renewable energy, the gas that would have fueled your car will likely end up being burnt in power plants to generate electricity to power the cars which would be an unnecessary conversion of energy that could cause gasoline to be less efficient and subsequently cause electric cars to create more pollution than a gasoline powered car.
DeleteTL;DR: Kwik Trip is here to stay and Electric cars are only good for the environment if the way we produce energy changes.
It is very interesting that you bring up Tesla being comparable to other car brands but in higher standards. When I see a Tesla the first thing I think about is the high tech display and how it runs off electricity rather than gas. With this being said, is it cheaper to run an electric car or purchase gas? The car has a positive impact on our ecosystem, but generally speaking is not very affordable which is why you see few on the road. Many people these days are driving the common Honda or Toyota cars as they are gas efficient for the most part and reasonable in price. Even if manufacturers begin to switch over to electric cars, it is not guaranteed that no gas running cars will still be produced. Some manufacturers may still want to produce gas driven cars depending on the demand of consumers. People may still be drawn to gas using cars as with having a more expensive produced car when things break they are more expensive to fix.
ReplyDeleteWhen ever I see a Tesla go by I think it only for the top of the line rich people because they cost so much. I also think about the inside of the car. I also think about how it is a fully electricity car rather then running on gas. This car has a positive impact on our ecosystem, but generally speaking is not very affordable for most people. In the beginning of buying this car it is going to be very expansive but as you go on it might work out to be cheaper then having to buy gas every one to two weeks. There will still be car manufacturers that want to make gas cars because then they can make the loud instead of cars that you can't mod or change the sound the car makes. There will still be car people out there that will want to fix and work on gas cars, so gas cars I don't think will go out of business. But I do think cars that run on electricity will keep growing and growing but they still have to deal with the cars that run on gas.
ReplyDeleteIt's interesting that a company, like Tesla, has been able to break into the car industry which is largely viewed as an oligopoly (made up of Ford and GM). As you said, this is in part due to a changing in preferences of customers, who are now more environmentally conscious. Additionally, Tesla's growth can be attributed to how they differentiate themselves from competitors; for example, Tesla's brand is often seen as of higher quality and more technologically advanced than other manufacturers. However, with Tesla's growth and entry into a highly controlled industry, there will be followers and hopefully as you said, gas run cars become a thing of the past.
ReplyDeleteI think that Tesla is an pioneer in the electric car industry, but I'm pretty sure that its going to have a lot of competition in the future (as Vince mentioned in the article). This isn't just because Tesla's cars have high tech features and look expensive, but also because the natural resources on our planet are depleting faster than ever. It is predicted that we will run out of all fossil fuels before 2100 (not even 100 years from now!). Hence, in the car industry, there is no option other than electric cars, or else their companies that only produce gas powered cars will have to shut down. In other words, land - a factor of production - will no longer be available for gas powered cars. I think Tesla is working very effectively, despite the hiccup that they experienced earlier this year, and in the future will be considered one of the first and best electric car companies, much like Ford is considered today.
ReplyDeleteAs you have explained, the car market is dominated by a few large firms making it an oligopoly. With this being said, oligopolies have pretty high barriers to entry so it is very unique that Tesla just kind of jumped into that market without many hoops to jump through. However, Tesla did create a new product that fits the niche of the target market, so people got excited and wanted to buy the new technology. Lastly, because this technology is fairly new as well as expensive, Tesla is not yet reaching the full potential of a target market. As they continue to produce new cars, the price is expected to go down somewhat, creating more affordable products to cater to a larger target market.
ReplyDeleteDo you think Tesla would be more successful if the price point for their cars is lower? Clearly there is a current market for people buying high end electric cars but is the market for middle of the road electric cars bigger? A lot of people willing to buy luxury cars are adamantly against electric cars and therefore buy Ferraris, Lamborghinis, Mercedes Benz, Rolls Royce, and Bentley which put simply are not fuel efficient. I believe Tesla's success at selling high end electric cars is due to the fact that they are the only (or one of the only) supplier of high end electric cars. I think car fanatics will see some benefits with electric cars: best being high torque outputs. But I think that in order to grow the electric car market, there is more opportunity trying to target middle of the road car buyers who feel indifferent to "performance" and "engine sound" that some high end car enthusiasts crave.
ReplyDeleteThe entire electric car market is continuing to grow. I've noticed that no one ever talks about these other electric car brands. This is because when someone says the word "electric car" the typical person instantly thinks of Tesla. Tesla has become the household name for electric cars and they are steps in front of their competition just because of their brand recognition. There is a certain "classy" feel to owning a Tesla and this will continue to draw in customers. Tesla is viewed as a luxury car and their popularity will only continue to grow in the technology fueled world we live in today.
ReplyDeleteI think Tesla is an awesome business and is a company I am definitely willing to support. They’re branding is so smart and they are using their money in the right ways. Besides, when have you ever seen a Tesla commercial on TV? I can say I’ve never seen one. The brand speaks for itself and doesn’t even need advertising to support it. With the long term investment and health benefits for the environment it seems like the perfect purchase for someone to make and would contribute to the economy well considering gas prices and tax rates.
ReplyDelete-Anika King
This article makes me wonder how long it will be until everyone drives electric cars, and/or is required to drive electric cars. It also makes me wonder how much it's actually costing Tesla to produce these cars and if they are charging such high prices because they have such a high market share, or because it's costing them a significant amount to produce each car. As electric cars continue to grow as well, I wonder how the US government will react. There seem to be conflicting viewpoints on electric cars: restricting the oil industry v. limiting environmental impact and climate change. Perhaps the government will take the stance against climate change and subsidize electric car producers in an attempt to stimulate production. Economically speaking, I think that as one market dies out, the oil and gasoline powered-car industries, another market will bloom and thrive, dependent on how accessible the technology becomes.
ReplyDeleteI would agree that the entire electric car market is growing at an exponential rate. I have noticed that mainly everyone talks about Tesla, but not the other brands that are also well established. In the end electric cars will continue to grow, as we modernize and grow this technologically focused society.
ReplyDeleteMany countries would have to build new electric "gas" stations and also electric components within their own houses. We also will have to consider the taxes and pricing of the electric bills that would surely increase in the case of a new electric car. Would the U.S. be able to support this change?
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