The Root Of The Tesla Motors Inc (TSLA) Hype

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Tesla Motors Inc (NASDAQ:TSLA) has, with little doubt, a good thing going right now. Shares of the automaker are up nearly 190% year-to-date, and its market cap is over $11 billion. And it only took 10 years. Tongue-in-cheek aside, the story of Tesla Motors Inc (NASDAQ:TSLA) is a remarkable one, and it may be the kind of story that shines a light on the evolution and transformation of the consumer market nowadays.

Like his innovations at Space X and PayPal, or at the red-hot solar player SolarCity, Elon Musk has developed a very different business model for Tesla Motors Inc (NASDAQ:TSLA), and he has taken a two-pronged approach.

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The viral hype

Without a doubt, however, even the biggest Tesla Motors Inc (NASDAQ:TSLA) bull cannot deny that much of the company’s favoritism in the marketplace has to do with the company’s story, and where investors think it will be in another 10 years. This vision—filled with 3,000-mile EVs and supercharger stations in every town—starts and ends with Tesla Motors Inc (NASDAQ:TSLA)’s iconic CEO.

As we at Insider Monkey mentioned earlier this week, Elon Musk’s voice can be heard daily on Twitter, and some of his best tweets have to do with his thoughts on interstellar travel, the important of recognizing climate change, and his massive personal investment in the company; see Musk’s full purchase history here.

Heck, he’s even speculated on a Tesla Motors Inc (NASDAQ:TSLA) Truck on his long-run horizon, and talk of a $30,000 “Gen III” electric car for lower-cost consumers is rumored to be his next project. The primary point of Musk’s social media strategy is to garner positive attention from the mainstream media through a sort of “open-door” approachability, which has many market participants sold on Tesla as the quintessential Apple of the auto industry.

Word-of-mouth and advertising dollars

Equally as important lies a far less high-tech process. Lately, it seems that the auto dealership lobbyists have never been so busy. In North Carolina and Texas, Tesla cars are not allowed to be sold to residents of those states without a dealership as an intermediary, and there are other states considering similar legislation.

Why would this be such a big deal surrounding a company that is only projected to sell about 20,000 cars this year?

Well, it seems that Elon Musk also knows the art of word-of-mouth advertising and believes in being consumer-friendly, allowing car-buyers to purchase a vehicle the same way they would buy shoes or shirts or a toy for their child at Christmas: online, without sales people or having to pay for a brick-and-mortar building and the showroom vehicles.

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