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Tesla’s Journey: From IPO to Passing Ford in Value, in Just 7 Years

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In Tesla’s final years as a private company, things got pretty hectic.

As we showed in Part 1: Tesla’s Origin Story, the launch of the Roadster was a public relations success, but it created all kinds of problems internally. There were massive cost overruns, a revolving door of CEOs, layoffs, and even a narrow escape from bankruptcy.

Fortunately, by 2010 the company was able to forget these troubles after a successful IPO. The company secured $226 million in capital, and hitting the public markets started a roller coaster ride of growth.

Rise of Tesla: The Company (Part 2 of 3)

Today’s giant infographic comes to us from Global Energy Metals, and it is the second part of our three-part Rise of Tesla Series, which is a definitive source for everything you ever wanted to know about the company.

Part 2 shows major events from 2010 until today, and it tracks the company’s rapid growth along the way.

Part 1: Tesla's Origin StoryPart 2: From IPO and OnwardsVisualizing Elon Musk's Vision for the Future of Tesla

Tesla's Journey: From IPO to Passing Ford in Value, in Just 7 Years
Part 1: Tesla's Origin StoryPart 2: From IPO and OnwardsVisualizing Elon Musk's Vision for the Future of Tesla

Tesla was the first American car company to IPO since The Ford Motor Company went public in 1956.

Interestingly, it only took seven years for Tesla to match Ford’s value – here are the major events during this stretch of time that made this incredible feat possible.

2010

After securing funding from the public markets, Tesla was positioned for its next big leap:

  • The company had just narrowly escaped bankruptcy
  • The Tesla Roadster helped to dispel the stigma around EVs, but it was unclear if it could be parlayed into mainstream success
  • The company was free from its feud and lawsuit with co-founder Martin Eberhard
  • Tesla had just taken over its now famous factory in Fremont, CA

It was time to focus on the next phase of Tesla’s strategy: to build the company’s first real car from scratch – and to help the company achieve the economies of scale, impact, and reputation it desired.

2011

In 2011, Tesla announces that the Roadster will be officially discontinued.

Instead, the company starts focusing all efforts on two new EVs: the Model S (A full-size luxury car) and the Model X (A full-size luxury crossover SUV).

2012

The Model S was Tesla’s chance to build a car around the electric powertrain, rather than the other way around.

When we started Model S, it was a clean sheet of paper.

– Franz Von Holzhausen, Chief Car Designer

In June 2012, the first Model S hits the road – and the rest is history. The model won multiple awards, including being recognized as the “safest car ever tested” by the NHTSA and the “Best car ever tested” by Consumer Reports. Over 200,000 cars were eventually sold.

But despite the success of the new model, Tesla still faced a giant problem. Lithium-ion batteries were still too expensive for a mass market car to be feasible, and the company needed to “bet the farm” on an idea to bring EVs to the mainstream.

2013

Tesla reveals initial plans for its Gigafactory concept, an ambitious attempt to bring economies of scale to the battery industry.

In time, the details of those plans solidified:

  • Cost: $5 billion
  • Partner: Panasonic
  • Objective: To reduce the cost of lithium-ion battery packs by 30%
  • Location: Sparks, Nevada
  • Size: Up to 5.8 million sq. ft (100 football fields)

The company believed that through economies of scale, reduction of waste, a closer supply chain, vertical integration, and process optimization, that the cost of batteries could be sufficiently reduced to make a mass market EV possible.

Under Tesla’s first plan, the Gigafactory would be ramped up to produce batteries for 500,000 EVs per year by 2020. Later on, the company eventually moved that target forward by two years.

2014

Tesla makes significant advances in software, hardware, and its mission.

  • Autopilot is released for the first time, which gives the Model S semi-autonomous driving and parking capabilities
  • By this time, Tesla’s Supercharger network is up to 221 stations around the world
  • Tesla goes open source, releasing all of the company’s patents for anyone to use

2015

After massive and repeated delays because of issues with the “falcon wing” doors, the Model X finally is released.

In the same year, the Tesla Powerwall is also announced. Using a high-capacity lithium-ion battery and proprietary technology – the Powerwall is a major step towards Tesla achieving its major end goal of integrating energy generation and storage in the home.

2016

Tesla unveils its Model 3 – the car for the masses that is supposed to change it all.

Here are the specs for the most basic model, which is available at $35,000:

  • Price: $35,000
  • Torque: 415 lb-ft
  • Power: 235 hp (Motor Trend’s est.)
  • 0-60 mph: 5.6 seconds
  • Top speed: 130 mph
  • Range: 220 miles

After being announced, the Model 3 quickly garnered 500,000 pre-orders. To put the magnitude of this number in perspective – in six years of production of the Model S, the company has only delivered about 200,000 cars in total so far.

In 2016, Tesla also announces that it is taking over of Elon Musk’s other companies, SolarCity, for $2.6 billion of stock. Elon Musk owns 22% of SolarCity shares at the time of the takeover.

The goal: to build a seamlessly integrated battery and solar product that looks beautiful.

2017

2017 was a whirlwind year for Tesla:

  • Consumer Reports names Tesla the top American car brand in 2017
  • The Tesla Gigafactory I begins battery cell production
  • Tesla wins bids to provide grid-scale battery power in South Australia and Puerto Rico
  • Tesla starts accepting orders for its new solar roof product
  • The Tesla Semi is unveiled – a semi-truck that can go 0-60 mph in just 5 seconds, which is 3x faster than a diesel truck
  • Model 3 deliveries begin, though production issues keep them from ramping at the speed anticipated

Tesla also unveils the new Roadster – the second-gen version of the car that started it all.

This time, it has unbelievable specs:

  • 0-60 mph: 1.9 seconds
  • 200 kWh battery pack
  • Top speed: above 250 mph
  • 620 mile range (It could drive from San Francisco to LA and back, without needing a recharge)

The point of doing this is to give a hardcore smackdown to gasoline cars

– Elon Musk, Tesla Co-Founder and CEO

The new Roadster will go into production in 2020.

A Look to the Future

In 1956, the IPO of the Ford Motor Company was the single largest IPO in Wall Street’s history.

Tesla IPO’d a whopping 54 years later, and the company has already passed Ford in value:

Ford: $49.9B
Tesla: $52.3B
(numbers from Dec 31, 2017)

An incredible feat, it took only seven years for Tesla to pass Ford in value on the public markets. However, this is still the beginning of Tesla’s story.

See Musk’s vision for the future in Part 3 of this series.

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Automotive

Palladium: The Secret Weapon in Fighting Pollution

The world is in critical need of palladium. It’s a crucial metal in reducing emissions from gas-powered vehicles, and our secret weapon for cleaner air.

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Despite the growing hype around electric vehicles, conventional gas-powered vehicles are expected to be on the road well into the future.

As a result, exhaust systems will continue to be a critical tool in reducing harmful air pollution.

The Power of Palladium

Today’s infographic comes to us from North American Palladium, and it demonstrates the unique properties of the precious metal, and how it’s used in catalytic converters around the world.

In fact, palladium enables car manufacturers to meet stricter emission standards, making it a secret weapon for fighting pollution going forward.

Palladium: The Secret Weapon in Fighting Pollution

The world is in critical need of palladium today.

It’s the crucial metal in reducing harmful emissions from gas powered vehicles—as environmental standards tighten, cars are using more and more palladium, straining global supplies.

What is Palladium?

Palladium is one of six platinum group metals which share similar chemical, physical, and structural features. Palladium has many uses, but the majority of global consumption comes from the autocatalyst industry.

In 2018, total gross demand for the metal was 10,121 million ounces (Moz), of which 8,655 Moz went to autocatalysts. These were the leading regions by demand:

  • North America: 2,041 Moz
  • Europe: 1,883 Moz
  • China: 2,117 Moz
  • Japan: 859 Moz
  • Rest of the World: 1,755 Moz

Catalytic Converters: Palladium vs. Platinum

The combustion of gasoline creates three primary pollutants: hydrocarbons, nitrogen oxides, and carbon monoxide. Catalytic converters work to alter these poisonous and often dangerous chemicals into safer compounds.

In order to control emissions, countries around the world have come up with strict emissions standards that auto manufacturers must meet, but these are far from the reality of how much pollutants are emitted by drivers every day.

Since no one drives in a straight line or in perfect conditions, stricter emissions testing is coming into effect. Known as Real Driving Emissions (RDE), these tests reveal that palladium performs much better than platinum in a typical driving situation.

In addition, the revelation of the Volkswagen emission scandal (known as Dieselgate) further undermines platinum use in vehicles. As a result, diesel engines are being phased out in favor of gas-powered vehicles that use palladium.

Where does Palladium Come From?

If the world is using all this palladium, where is it coming from?

Approximately, 90% of the world’s palladium production comes as a byproduct of mining other metals, with the remaining 10% coming from primary production.

In 2018, there was a total of 6.88 million ounces of mine supply primarily coming from Russia and South Africa. Conflicts in these jurisdictions present significant risks to the global supply chain. There are few North American jurisdictions, such as Ontario and Montana, which present an opportunity for more stable primary production of palladium.

Long Road to Extinction

The current price of palladium is driven by fundamental supply and demand issues, not investor speculation. Between 2012 and 2018, an accumulated deficit of five million ounces has placed pressures on readily available supplies of above-ground palladium.

Vehicles with internal combustion engines (ICE) will continue to dominate the roads well into the future. According to Bloomberg New Energy Finance, it will not be until 2040 that ICE vehicles will dip below 50% of new car sales market, in favor of plug-in and hybrid vehicles. Stricter emissions standards will further bolster palladium demand.

The world needs stable and steady supplies of palladium today, and well into the future.

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Animation: U.S. Electric Vehicle Sales (2010-19)

This stunning animation visualizes the last nine years of U.S. electric vehicle sales. We also look at who will lead the race in the coming years.

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It’s challenging to get ahead, but it’s even harder to stay ahead.

For companies looking to create a sustainable competitive advantage in a fast-moving, capital intensive, and nascent sector like manufacturing electric vehicles, this is a simple reality that must be accounted for.

Every milestone achieved is met with the onset of new and more sophisticated competitors – and as the industry grows, the stakes grow higher and the market gets further de-risked. Then, the real 800-lb gorillas start to climb their way in, making competition even more fierce.

Visualizing U.S. EV Sales

Today’s animation uses data from InsideEVs to show almost nine years of U.S. sales in the electric vehicle market, sorted by model of car.

It paints a picture of a rapidly evolving market with many new competitors sweeping in to try and claim a stake. You can see the leads of early successes eroded away, the increasing value of scale, and consumer preferences, all rolled into one nifty animation.

The Tesla Roadster starts with a very early lead, but is soon replaced by the Nissan Leaf and Chevrolet Volt, which are the most sold models in the U.S. from 2011-2016.

Closer to the end, the Tesla Model S rises fast to eventually surpass the Leaf by the end of 2017. Finally, the scale of the rollout of the Tesla Model 3 is put into real perspective, as it quickly jumps past all other models in the span of roughly one year.

The Gorilla Search

While Tesla’s rise has been well-documented, it’s also unclear how long the company can maintain an EV leadership position in the North American market.

As carmakers double-down on EVs as their future foundations, many well-capitalized competitors are entering the fray with serious and ambitious plans to make a dent in the market.

In the previous animation, you can already see there are multiple models from BMW, Volkswagen, Honda, Fiat, Ford, Toyota, Nissan, and Chevrolet that have accumulated over 10,000 sales – and as these manufacturers continue to pour capital in the sector, they are likely posturing to try and find how to create the next mass market EV.

Of these, Volkswagen seems to be the most bullish on a global transition to EVs, and the company is expecting to have 50 fully electric models by 2025 while investing $40 billion into new EV technologies (such as batteries) along the way.

The Chinese Bigfoot?

However, the 800-lb gorilla could come from the other side of the Pacific as well.

Global EV Sales

Source: The Driven

Chinese company BYD – which is backed by Warren Buffett – is currently the largest EV manufacturer in the world, selling 250,000 EVs in 2018.

The Chinese carmaker quietly manufacturers buses in the U.S. already, and it has also announced future plans to sell its cars in the U.S. as well.

How will such an animation of cumulative U.S. EV sales look in the future? In such a rapidly evolving space, it seems it could go any which way.

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