The company holds a competitive advantage over the rest of the industry. It has a jump start over other companies because it has been producing fully electric vehicles for some time now. I view Tesla as a pioneer in an uncharted land. It seems that years of growth are ahead and its momentum is just starting. It hopes to open its first store in China by the end of 2013, which would open the company up to the world’s largest auto market.
With its Model X, Tesla Motors Inc (NASDAQ:TSLA) plans to blend the best of an SUV with the benefits of a minivan, and build it into an electric car. Tesla promises the Model X to have a lower center of gravity than any other SUV and still have “nimble reflexes at every turn,” even with up to seven passengers. It will have new features, such as “falcon wings” as seen below.
Threats
You can be certain of one thing — companies like Toyota will do everything they can to catch up to Tesla. There is always the threat of copy-cats, but that is true of any company. At this point, its a matter of when and how it will happen. Toyota is seemingly the closest competitor with its hybrid versions, but Elon Musk is bound and determined to change the way we view vehicles. I don’t think Musk would be scared of a little competition.
It is far easier for companies to imitate what has already been done, and improve upon it. It is not as easy to create an entirely new concept, design, or idea. It is yet to be seen how Toyota, Nissan, Ford, or General Motors Company (NYSE:GM) will do this, but if Tesla continues to grow at its current rate, it would be silly for these companies not to follow suit and charge less for it.
The bottom line
Tesla Motors Inc (NASDAQ:TSLA) is in a tricky position. It has so much potential to do very well, but it is bound by technological restrictions that it can’t control. Tesla will likely be able to control their success, but right now, they are dependent on others to fix their weaknesses. Regardless, I expect jaw dropping growth out of this company for years to come. I believe the weaknesses will take care of them-self if Tesla can continue its fury of growth.
The article A Closer Look at This Innovative Company’s Business originally appeared on Fool.com and is written by Tyler Wofford.
Tyler Wofford has no position in any stocks mentioned. The Motley Fool recommends Tesla Motors. The Motley Fool owns shares of Tesla Motors. Tyler is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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