Last week marked the 10th anniversary of the initial public offering of electric vehicle maker Tesla. And CEO Elon Musk and other investors had 324 billion reasons to celebrate: $324 bilion was market value of Tesla (in Australian dollars) at the end of the week.
It’s a phenomenal result by any means. Tesla hit the boards 10 years ago with a value of $1.7 billion, and since then has delivered an average annual return on that investment of 45 per cent.
In 2019, Tesla made 365,000 electric cars, a fine achievement. Toyota produced nearly nine million vehicles. Yet the market is judging Tesla to be the most valuable car company in the world, with a value of $890,000 for every car it made last year.
It’s a market value that seems barely believable by any conventional measure. But this is not about the past, or even the present, but the future. And this graph perhaps sums up the situation best.
It’s the story of sales of the Toyota Prius and Tesla EVs in the US. It is significant because it tells of two different strategies – one firmly on the future with no concern about legacy assets, and other with an eye to the past and a determination not to rock the boat, or its business model; and another strategy with the focus firmly on the future, and no legacy distractions.
Toyota won’t die because the Prius has passed it used by date. And hybrids continue to prove to be enormously popular, more so than Toyota ever expected. In the last year, more than 60 per cent of sales of popular models such as the RAV4 and the Camry have been the hybrid versions.
But this is the modern equivalent of the fax machine. Hybrids are easy and convenient, customers get to feel like they are saving money, and lowering emissions, but the company gets to keep its profits, and protect its business model.
To read the full version of this story – and view the photo gallery – on RenewEconomy’s electric vehicle dedicated site, The Driven, click here…
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