Tesla inaugurated three new supercharger stations in Germany to allow Model S owners to travel to Switzerland and even reach Austria. Tesla Motors is expanding its European charging network and hopes to succeed before the end of 2014.
Tesla plans to cover Europe
The plan is no small task. Tesla wants to open more than 30 service centers and stores in Europe, as well as boost its sales for the Model S. In typical Tesla style, it wants to do this before the end of the year, which has raised concerns among investors.
The electric vehicle (EV) Model S will be sold at a starting price of about $70,000 (over 55,000 Euros) in Europe. In order to meet this goal, Tesla needs to jump its deliveries by more than 55 percent this year, globally. A quick search on Seeking Alpha will show plenty financial experts advise caution with Tesla, stating that the stock is over-valued. Elon Musk, Tesla Motors CEO, has already publicly said the stock valuation is ridiculously high. Many analysts believe the company won’t be able to meet its goal since it already cannot keep up with the demand of its Model S.
Tesla’s real challenge
Tesla’s biggest hurdle isn’t a technological one. Its battery technology and management have already demonstrated they work well, even beyond its initial hopes. The only accidents were road hazards and home charging stations the company hadn’t approved, so far. The Model S received the highest NHTSA ratings. The problem Tesla faces is leveraging its manufacturing process. It needs to bring up its manufacturing capacity to at least 50% to meet its ambitious goals.
The only ways to do this would be to have another manufacturing plant to assemble the Model S and Model X. This could be done with a strategic alliance with another carmaker to use their assembly line, such as when Fisker used Valet to assemble its Karma plug-in hybrid (PHEV). The other, more costly alternative would buy another manufacturing plant, something that wouldn’t surprise us. Either way, this means more financial resources spread out and the company’s expansion strategy will be scrutinized by industry experts.
How does Tesla do it?
No wonder Tesla gets under the skin of many companies, not just traditional carmakers. Tesla Motors achieves what many would like to, but can’t. With lightning speed and less capital than most high-profile players, Tesla achieves in months what others do in years. It does this with a brilliant overall vision, strategy and expanding resources at the right pace, in the right places. In other words, Tesla spreads its resources globally, which helps it build its leading industry role.
So why aren’t more companies doing the same? Many are already well established, but their culture slows down the rate of their expansion. Investors also get in the way by demanding more return on investments (ROI) than a clear sustainable future vision. Tesla Motors is hoping that the will and commitment to put everything on the line, to not be afraid of spreading itself thin, will make it the key central player in the EV world.
Tesla Motors will very likely achieve its goal of opening another 30 centers throughout Europe and have enough supercharging stations to allow its Model S owners, and the future Model X travel around Europe in a year. The trick is to see how they will beef up their manufacturing by 55% in 2014.
Nicolas Zart
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