Stock market analyst Pierre Ferragu of New Street Research has stated that the Tesla group of companies is making major progressive steps towards becoming one of the biggest companies in the world, and it could become as large as the BMW Group as early as 2025. While many people might feel that this is a bold and ambitious statement, proper research and market analysis might make you think that this isn’t an impossible task.
In Five Years Tesla Will Be As Big As BMW With Twice Better Margins, Analyst Says
Ferragu said that this prediction is due to the development of Tesla as an iconic brand, with the electric vehicles that they are putting on the market being unique in terms of performance and luxury. He said that things at Tesla seem very tangible at the moment, and they are like an innovation machine working on electric vehicle technology.
Tesla Automotive Group
The rapid changes that Tesla has brought about in the automotive sector have been quite impressive. When the Tesla Model S was launched in 2012, there was a notion that an electric car running 100 miles (161 kms) on a single charge would be ‘cool’. Currently, the longest a Tesla can run without the need for a charging station is 402 miles (647 kms) in a Tesla Model S Long Range, and that is quite amazing. Apart from this, they also have the Model 3 and Model X selling like hot cakes in the United States, with the Model Y and Cybertruck currently under development for 2021 releases.
Apart from the tangible growth, Tesla has also given fuel to other Silicon Valley start-ups, with Lucid Motors coming onto the market in less than a week’s time. Porsche has entered the electric market, as have other European companies, and Tesla can be labeled as the pioneer of this change. With its Silicon Valley-like ideology, Tesla has been keeping their vehicles up to date with over-the-air software updates, thus ensuring longevity in their vehicles. With tons of innovative tech developments over the years, the image of Tesla has grown in the industry, as has their size on the market.
Apart from the iconic branding and tech developments, one of the biggest contributors to Tesla’s growth has been the R&D carried out in the autonomous driving sector. Enormous amount of research is being carried out on fully self-driving cars, and customers have gotten previews of this technology through the driver-assist features in their EVs. Features like the Autopilot, Summon, and many others have managed to create a sense of acceptance in the minds of common people regarding autonomous vehicles, which is still a controversial subject. The announcement of the 4D Autopilot feature has fueled this interest further.
Apart from the vehicles, Tesla has also gone about expanding their production hubs, with two Gigafactories already in place at Nevada and in Shanghai. Apart from this, the Megafactory in Fremont continues to be the center of a lot of activity. Future plans include an under-construction Gigafactory in Berlin, proposed Gigafactories in Central America (Texas), and Asia (South Korea/Japan) and there are rumors of a British Gigafactory too.
Tesla sold 367,500 cars worldwide in 2019, which is a massive growth from the 2018 figure of 245,240. The huge growth in sales, massive developments in the self-driving sector, the backing of an iconic brand, and a number of production hubs coming up in the recent future – Ferragu’s statement starts making sense slowly. And the automobile sector is just a part of what Tesla does.
Other Tesla Ventures
Tesla’s name has become synonymous with cars, but people need to remember that Tesla is in the energy storage, solar, and insurance market as well. It is the energy sector that is making waves in particular. There is a theory that pretty much everyone owns a car, but not everyone has a solar panel on their roof, and so it is the automobile sector that is responsible for maximum growth. But the day isn’t far that Tesla-produced solar panels will be as common in a house as a Tesla vehicle.
Elon Musk himself mentioned that Tesla Energy could end up being as big as Tesla Motors, if not bigger. Solar power is getting cheaper by the day, and with Tesla offering attractive deals on rentals and subscriptions for solar panels, the usage of solar power is going to get very much affordable. Tesla Energy offers its customers world-class solar technology at a fraction of the cost, and that too without the installation hassles.
Tesla Solar is almost one-third less expensive than the average solar energy providers on the market, and this has resulted in their solar panel installations almost tripling from Q1 to Q2 of the current financial year. Large scale projects like Powerwall and Powerpacks are being used at many locations, and the Tesla Big Battery in Australia acts as a massive backup, keeping the surrounding area safe from the power outages.
All these points in the right direction for Tesla. The automobile sector is booming like anything, and the energy sector is picking up the pace too. The BMW Group, consisting of BMW, Mini, and Rolls-Royce, may have sold 2.5 million cars worldwide in 2019, but if you compare percentage growth, Tesla’s almost-50% is way ahead of BMW’s 1.2%. With massive amounts of infrastructure being constructed, a huge amount of research going on, and major advancements causing the market to change at every possible turn, Tesla may become as large as BMW in the next few years, with twice better margins as well. As of now, there is no limit to the growth of the Tesla stock, and the future seems quite bright at the moment.