Questions arise as to whether Tesla, Elon Musk’s electronic car company, will be able to compete in the market
Elon Musk promised the deliver of 30 Model 3s by the end of July, and a production rate of 20,000 Model 3s a month by December 2017.
Musk will have to keep to that promise despite Tesla sales decreasing by 12% in the second quarter due to a problem in the production of battery packs at its Nevada battery plant.
Musk declared his goal as “getting as many electronic cars on the road as possible”, and continues to produce and sell predecessors of the Model 3, the Model X and Model S.
Tesla’s future depends upon the success (or failure) of Tesla’s first high-volume car, the Model 3. It is priced at a conservative $35,000 and has a distance-range of roughly 200 miles.
The Model X, the last sport utility vehicle released in 2016, suffered from a mass of production and quality issues – if the Model 3 faces anything similar, Tesla’s stock could take a hard plunge.
However, Tesla has learned from the failings of the past: “We’ve really learned a lot of lessons, especially from the difficult Model X ramp,” stated Chief Technology Officer J.B. Straubel.
Tesla faces equal challenges and advantages
Tesla will face many challenges to compete in the motor industry, especially competition from luxury brands such as Jaguar, Porsche and BMW (all of which are releasing electric cars in the coming years).
A lack of traditional dealer system will result in a taxing burden for Tesla to repair and maintain all cars it has sold.
Nonetheless, if Tesla can maintain production and provide flaw-free cars, it could remain “top of the pack”.
Tesla’s advanced electronic software is a “huge competitive advantage”, says consultant Marian. “Tesla is fully vested in electric vehicles. This helps them a lot. [Other automobile manufacturers] are trying to catch up, but they’re many years late.”
Musk acknowledged the risk purchasers were taking by owning a Tesla, tweeting: “It matters to us that you took a risk on a new car company. We won’t forget.”