California-based electric car maker, Tesla Motors Inc (NASDAQ:TSLA), is taking a step in the right direction. Not only are media outlets inundated with news relating to its new found profitability, but the company is also making all the right moves in the right places. Although it still has a long way to go, Tesla Motors Inc (NASDAQ:TSLA) has managed to position itself as a good long-term play. I believe that Tesla Motors Inc (NASDAQ:TSLA)’s clear cut goals, coupled with its forward looking strategy, signal huge growth potential moving forward.
While Tesla Motors Inc (NASDAQ:TSLA)’s cars initially passed by as an option for the affluent and well placed in society, CEO Elon Musk wants to change this impression. In a multi-step plan, Tesla has shown that it wants to expand its reach into the mass market, and if possible, rope in more budget witty consumers.
Towards the end of March, it announced that it would scrap off plans to produce its most affordable Model S. The move, which at the time seemed absurd, was however followed by a better proposition dubbed as ‘Tesla Motors Inc (NASDAQ:TSLA)’s big announcement’.
The much anticipated announcement wiped away the gloom and gave budget disposed consumers reason to celebrate. Unlike in the past, where Tesla Motors Inc (NASDAQ:TSLA)’s customers had to pay lump sums, Elon Musk has now designed a new buy-lease financing scheme.
The scheme combines leasing and owning a Tesla Model S. It will have the makings of a typical car lease contract and customers will pay monthly payments in the neighborhood of $500. To sweeten the deal, leasing and owning the car will give buyers the option of keeping the Model S or returning it after three years.
As such, the customer loss that will be brought about by scrapping off cheap S models will be offset by the inflow of new customers under the new financing scheme. I personally believe that this is a laudable move, and as earlier stated, a step in the right direction.
Huge leeway in the mass market
While there is no denying that there will be a lot of elbowing and lopsided competition in the mass market, I believe that Tesla will finally establish a solid footing.
Already, the electric car maker has shown that it can face and trounce its competition. By dominating its space, Tesla has edged out its fellow electric car maker Fisker Automotive. Fisker is not only grappling with low sales, but it is also teetering on the brink of bankruptcy. The car maker, which has drawn in $192 million in Energy Department loans, hired Kirkland and Ellis — a major bankruptcy firm — to review its options moving forward.