Convertible Notes and Startup Funding
February 12, 2025
Individual investors are well aware of the existence of pension funds. Retail investors who earn their income in the form of a salary are likely to have invested in these funds. Other retail investors may also have invested in these funds. Almost everyone has heard about pension funds in the news. However, very few people […]
The profession of investment banking has become quite innovative over the years. Traditionally, raising capital was an expensive as well as time-consuming process. However, over the past few years, investment banks have devised ways to help their clients raise funds. These ways are neither time consuming nor expensive. A reverse merger is one such innovative […]
Investors who have been in the market for a long time know that investing is an emotional activity as much as it is a financial activity. This is the reason that people who have a higher degree of self-control generally tend to do better than their peers. Self-control bias may seem like an obvious and […]
Investors can be classified into types. The two predominant types are growth oriented investors and value oriented investors. Growth oriented investors invest in young growing companies. They expect returns in the form of capital appreciation backed by the high rate growth in the operations and profitability of the firm. On the other hand value investors […]
The Indian government has been defensive about opening up its retail sector to global companies such as Wal-Mart and Amazon. This is the reason why the country only permits 100% foreign direct investment in single-brand retail. This means that companies like Levis or Benetton can own and operate stores because they only sell one single […]
The growth story of Tesla is no ordinary story. It is a testimony to what a start-up can achieve if it’s given an adequate amount of funding and good leadership guidance. It would be wrong to classify Tesla as a start-up company now. Tesla is now one of the most popular automobile companies in the world. It is also the most valuable automotive company in the entire world.
The total market capitalization of Tesla is now more than $1 trillion dollars! This number becomes even more astounding when it is seen in context. Tesla, by far, has the largest market capitalization among all automobile companies. The next ten automobile behemoths such as Ford, General Motors, Volkswagen, Honda, BMW, etc all have a combined valuation of close to $1 trillion. This is amazing given the fact that traditional automobile companies have been around for more than a century. On the other hand, Tesla was founded less than twenty years ago in 2003!
Tesla was once a start-up that drew the attention of investors such as Elon Musk who has now become the face of the company. It is one of the few companies which has dwarfed the incumbent companies in its market space.
In this article, we will have a closer look at what the Tesla model is. We will try to understand and uncover what makes Tesla the most valuable automobile brand in the world.
The ability of Tesla to sustain its sales even with a higher price tag speaks volumes about the marketing capability and consumer connection of the company. This fact becomes more commendable if we take into account the fact that Tesla does not spend any money on advertising its products whereas its competitors have massive advertising budgets.
Tesla has created solar panels, which are fixed on the roof and help in the generation of electricity. Also, Tesla has created a unique product called power wall. Power walls store solar power so that it can be used on days when enough energy is not produced.
Tesla is known for spending three to four times more on research and development as compared to its competitors. This research and development spending is what is propelling Tesla ahead of its competition. Tesla regularly introduces revolutionary features such as self-driving cars. The end result is that traditional media houses as well as social media are forced to provide coverage to their vehicles. This acts as free word-of-mouth publicity which helps increase the sales of the company in the long run.
Tesla first made electric cars popular in the expensive cars segment. The money from these expensive cars is being funneled into research and development to reduce the price of entry-level vehicles. Once Tesla enters the lower segments of the market, it will do so with a compelling value proposition. Also, the success of Tesla in the high-end car market has made the idea of electric cars more palatable to the masses.
The bottom line is that Tesla has used a combination of technology and business acumen to completely transform an old industry. It is definitely a model which other start-ups can learn from.
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