John Lincoln

How Elon Musk Turned Tesla into a $500 Billion Dollar Company

When you think about it, Tesla’s recipe for success is simple—manufacture and sell electric vehicles that are both eco-friendly and exciting to drive.

But, there’s much more to it than that. Tesla’s unique business model has changed the game entirely, forging an unusual alliance between environmental enthusiasts and free-market capitalists.

When it comes to how to grow a company, there are plenty of lessons to be learned from Tesla CEO Elon Musk.

How did he turn Tesla into a company worth over $500 billion?

What We’ll Cover:

Investors

Founded in 2003 by entrepreneurs Martin Eberhard and Marc Tarpenning, Tesla was named after world-famous electric engineering pioneer Nikola Tesla. Tesla was also the brainpower behind the development of the AC electric motor, which is now used in Tesla cars.

Elon Musk joined the company in 2004 after investing nearly $7 million of his own money. By October 2008, he officially stepped in as CEO and cut 20% of Tesla’s workforce, downsizing operations to weather the ongoing financial crisis.

In addition to forming a strategic partnership with Daimler AG, Elon Musk also managed to secure $40 million in debt financing in 2010 with the goal of accelerating manufacturing of the Tesla Roadster and continuing future product development.

Open Source Patents

In 2014, Elon Musk announced that Tesla’s patents would be open source. He argued that this would allow the electric vehicle market to grow more quickly.

This is an incredible move because it brought more visibility to the industry and made it so that other car manufacturers would also want to invest in it.

This open-source philosophy is a testament to Tesla’s goal to inspire and motivate the world’s most talented engineers to continue advancing electric vehicle technology.

According to Elon Musk, “Our true competition is not the small trickle of non-Tesla electric cars being produced, but rather the enormous flood of gasoline cars pouring out of the world’s factories every day.”

Amazing PR

Although the company recently dissolved its PR department, Tesla excels at drumming up publicity.

In February 2018, for example, they sent a cherry red Tesla Roadster into space, which garnered some serious attention.

elon musk
Elon Musk’s Cherry Red Tesla Roadster in Space

And instead of spending a few thousand dollars per car on advertising, Tesla’s public relations strategy focuses on sharing information via Elon Musk’s personal Twitter account, which currently stands at over 44 million followers.

Incredibly Safe

Safety has always been a top priority for Tesla. Elon Musk said during a speech in Fremont, CA in 2017 that the Volvo S60 is arguably the second safest car, with the Model 3 taking first place.

According to the NHTSA (National Highway Traffic Safety Administration), the Tesla Model 3 has the lowest probability of injury of any other vehicle.

Tesla actually shared the crash test results via Twitter and Elon Musk justified the claim further.

Affordable

With gas prices continuing to rise, powering up an all-electric vehicle is much cheaper than taking a traditional car to the gas station.

While many Tesla vehicles come with a larger price tag, Elon Musk unveiled the Model 3 in March of 2016, which costs around $35,000.

As it stands, the Model 3 is the least expensive long-range vehicle on the market today.

And According to Elon Musk, a new compact car model is already in the works, with the estimated price ranging from $25,000 to $35,000.

Long Range

Range is a critical factor for potential electric vehicle buyers. Whether or not you can make it to the next charging spot or are able to successfully complete your daily commute both depend on it.

The driving range for the Model 3 starts at 240 miles for the standard range battery and goes up to 310 miles for the long-range battery.

During a recent interview as part of the European Battery Conference, Elon Musk expressed that some of the cars in Tesla’s lineup could reach more than 430 miles of range and the company is currently developing a 621-mile-range vehicle.

He added that Tesla’s long-term goal is to reduce the battery pack’s cost per kilowatt-hour to $100.

Scarce and Unique

With many other automobile companies focusing on luxury, Tesla focuses on scarcity.

They are one of the few manufacturers on the market that has complete control of their supply chain. Many of the cars’ parts and processes are owned or made directly by Tesla.

In fact, for somebody to purchase a Tesla today, you have to pre-order one either through the company’s website or its in-person showrooms.

You start with Tesla’s Design Studio and create a custom car that fits your wants and needs.  Choose from a variety of technical specifications spanning model type, speed, range, wheels, color, interior design, and autopilot capabilities.

tesla design studio
Tesla Design Studio

Cool Features

The innovation of the lithium-powered battery was Tesla’s main competitive advantage during the company’s early days.

The Roadster, Tesla’s first car, is powered by low-cost lithium batteries that are long-lasting and more efficient than older lead-acid type batteries. The battery was powerful enough to launch the Roadster from 0 to 60 miles per hour in just 3.7 seconds.

Other compelling features include the Model X’s 5,000-pound towing capacity and the Model S’s mega-tablet interface.

And instead of partnering with a big-name audio company, Tesla developed its own in-house sound system.

Plus, who could forget celebration mode? This setting is quite the spectacle, one in which the car will perform a song and dance routine by wiggling its doors and flashing its lights to the beat of the music.

Wrapping Up

It’s clear that from the get-go, Tesla has embarked on a journey of continuous innovation and advancement.  And they’re showing no signs of slowing down.

If you’re looking at how to grow a company to more than $500 billion, be sure to pay close attention to every move Elon Musk makes over the next few years.

You and your business will be glad you did!

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John Lincoln is CEO of Ignite Visibility, one of the top digital marketing agencies in the nation. Ignite Visibility is a 4x  Inc. 5,000 company. Ignite Visibility offers a unique digital marketing program tied directly to ROI with a focus on using SEO, social media, paid media, CRO, email, Amazon and PR to achieve results. Outside of Ignite Visibility, Lincoln is a frequent speaker and author of the books “Digital Influencer” and “The Forecaster Method.” Lincoln is consistently named one of the top digital marketers in the industry and was the recipient of the coveted Search Engine Land “Search Marketer of The Year” award. Lincoln has taught digital marketing and Web Analytics at the University of California San Diego since 2010, has been named as one of San Diego’s most admired CEO’s and a top business leader under 40. Lincoln has also made “SEO: The Movie” and “Social Media Marketing: The Movie.” His business mission is to help others through digital marketing.

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