Tesla Motors Inc (NASDAQ:TSLA)
CEO Elon Musk has long hinted about his Hyperloop pet project, and now he has revealed its inner workings. The Hyperloop is Musk's retort to California's proposed $70 billion high-speed rail system , and will use a series of advanced-engineered tubes to allow people to travel extended distances.
The design is expected to allow someone to travel from San Francisco to Los Angeles in 35 minutes . Yet perhaps the most interesting element of what Musk is doing is that he is changing the dynamic of the transportation industry for consumers. Those consumers are the same ones that would likely buy a Tesla. So what gives?
Tesla Motors Inc (NASDAQ:TSLA) as a Technology Company...
The reality is that Tesla Motors Inc (NASDAQ:TSLA) is more of a technology company as opposed to a car company the way that it operates. Technology moves a lot faster than the old school style of automotive engineering. Tesla Motors Inc (NASDAQ:TSLA), in effect, is akin to the Apple Inc. (NASDAQ:AAPL)
Apple Inc. (NASDAQ:AAPL) is not afraid to introduce a product that is going to eat into its existing business. It's done that with the iPhone taking business from the iPod, where sales continue to decrease, down 25% just in 2012 . They will soon do it again with iTunes Radio taking business away from the widely used iTunes download market, which grew 38% from 2011 to 2012 .
Apple Inc. (NASDAQ:AAPL) has executed this to great financial success. In their fiscal year of 2012, the company had $121 billion of cash on hand . That same year, they made $156 billion ! Last year, they had 77% of the cash on hand that they made selling their products and services!
Apple knows that in a highly competitive market, it needs to cannibalize itself. Tesla knows that too. Will we someday see a Tesla-branded Hyperloop? That's up to Musk, but if we know anything about the guy, it would not come as any surprise, and it actually might be good for Tesla Motors Inc (NASDAQ:TSLA)'s overall business to continue to diversify in that manner.
The only other company that can be described as taking car concepts and melding them with technology's breakneck pace would be Google Inc (NASDAQ:GOOG)
. Regulation is a challenge in terms of car safety, but Google Inc (NASDAQ:GOOG) has been able to get regulators to approve its self-driving cars in California, Nevada, and Florida .