Tuesday Tip: Tesla Motors Continues to Disrupt the Automobile Industry

By David Gracey

Tesla 1




Ever since my neighbor, “Barry”, let me take his Tesla (the car, not the ‘80s hair band) Model S for a spin, I’ve been obsessed with the company.  The more I learn about the company and its founder, Elon Musk, the more fascinating I find their story.

Musk was born in South Africa and moved to Canada as a teenager.  A serial entrepreneur, he cofounded the online pay service PayPal in the 1990s and sold the company in 2002 to eBay, the same year it went public for $1.5 billion.  His take was in the neighborhood of $150 million.  Instead of retiring and sipping fruity drinks in Costa Rica (like I would have done), he wanted to change the world.  He bet the farm on his next ventures Tesla Motors and SpaceX.  Tesla built electric cars and SpaceX made rockets.  He spent all of his own money (and a bunch of the bank’s) getting these companies off the ground.  Several years later he found himself a week away from declaring bankruptcy when SpaceX successfully launched a test rocket and got a large contract with NASA which saved him and the companies.  Since then, both companies have done exceptionally well.

Tesla 2With Tesla, someone finally built an electric car that looked cool!  Some people call it an “iPad with wheels” because of the large touch screen console and the wealth of technical advances.  Sales have been strong and the company appears to be headed in the right direction.  A great, must-see summary of his story is a 60 Minutes piece on him.

Highly rated:  Tesla first appeared on my radar when Consumer Reports gave the Model S their highest rating ever for an automobile.  That’s worth repeating: their highest rating EVER, for any automobile.  Highest in safety, maintenance and performance.  They agree the car is quite an investment but it promises to change the car industry for the better.

Intensely fast:  Because the car is 100% battery powered with no combustion engine, acceleration is instantaneous.  Its 0-60 speed rivals that of most sports cars.  A newly released model S has two motors and 4-wheel drive with a jaw dropping time of 3.2 seconds to reach 60mph.  That’s up there with many motorcycles and the Porsche 911.  And it does this in an eerily quiet fashion.  All you hear is the wind.

Web updates:  Traditional automobile manufactures require their customers to pay for upgrades, such as map changes to the navigation system, if they are available at all.  Not so with Tesla.  Many features are software downloadable at no charge.  My favorite enhancement was a feature called “creep mode.”  Some Tesla owners complained the car didn’t move forward (creep) when they took their foot off the brake at a stop light.  With a simple download and check box, the software now allows the car to creep forward after the driver removes his foot from the brake.  Let’s see General Motors do something like that!

Who needs dealerships anyway?  The Tesla business plan is a direct purchase model which makes the traditional dealership irrelevant.  You simply visit the Tesla website (www.TeslaMotors.com) and choose the options and color that you want and a few months later they deliver it to your door.  They don’t believe dealers are needed.  I agree.  There was a time when dealerships made sense but in today’s age of Google, consumers can get most of what they need online and through social media.  Dealerships have long enjoyed legal protections which hurt consumers (and don’t get me started on unions!) and Tesla’s plan has no need for them.  So far their plan is working great.

Tesla 3No more gas:  100% electric vehicles never need those weekly (or more) visits to the gas station.  Not only is there a convenience factor in this, there is a significant cost savings.  Although the price of gasoline has come down a lot in recent months, I still spend between $160 – $200 per month on gas.  This savings is definitely worth considering when making a new car purchase.

Not cheap: Starting at $69,900 before options, the Model S tops out around $130,000.  But the Federal government gives a $7,500 tax credit and Georgia (for now) has a $5,000 tax credit.  Musk plans on using the proceeds from the Model S to help pay for a mass produced and more affordable Model X, which is expected to begin rolling off the line in 2017.  This model will realize Musk’s dream of energy independence in an eco-friendly manner.  Making it affordable is the only way to accomplish this.  Tesla is building a new battery plant in Nevada that will be the largest such facility in the world.  Musk doesn’t do “small.”  But if you want a free battery-powered car, click HERE for a great Tuesday Tip about the Nissan Leaf.

Electric cars aren’t perfect.  They have limited range, take a while to recharge and can be expensive.  But Tesla has certainly improved their features and increased their appeal.  It will be both fun and interesting to see how Musk and Tesla continue to innovate and change the automobile industry.


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David Gracey: Since its founding in 1998, David has grown Network 1 into a top-notch IT services company dedicated to delivering the best solutions for Atlanta’s small and mid-size businesses. His responsibilities include creating the vision and strategy for its growth and establishing the culture of Network 1.

Network 1 designs, builds and supports the IT you need to run your business more securely, productively and successfully. Whether you want to outsource all of your IT needs to a reliable, responsive, service-oriented company, or need to supplement the work of your internal IT staff, we will carefully evaluate where you are now, discuss where you want to go and implement and support a plan to get you there with as little interruption as possible.

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