Ron Baron, one of the main investors in Tesla Motors, says that he believes that the car maker is going to be a big player in the industry very soon. Like very big.
The investor, who holds a $325 million dollar position in the motor company said that the company had the potential to grow up to become the best and largest company in the world in an interview with one reporter. And his beliefs are not far from what will happen because Tesla does have the potential to get big.
However, Baron’s optimism might be a bit too much especially since he thinks a big Tesla will necessarily translate to large and huge profits for the company. Tesla is known for the production of its high-end vehicles, the Model S and the Model X SUV which they sell for around $100,000.
But this is in line with what other automakers already do; Mercedes, BMW, Lexus, Audi, Porsche already sell high-end cars. The business is good profit wise, but it means the number of cars sold will not be as much. Especially if you are going to compare the company with other mass-market carmakers in the world such as Ford and GM, which means that other cars will have a small market share. However, they do not need a bigger share if they are selling high-end products anyway.
Tesla recently announced their plans to ramp up their production line and start making 500,000 vehicles by the end of 2018. Most of the cars they expect to be making are the new Model 3, dubbed the most important car in Tesla history as it tries to capture the average buyer because of its reduced price of $35,000.
The price is good enough to attract customers but whether the company will make a profit based on the price they put is something that we still have to see. The venture will be tough especially since the car is has a lot of untested technology and also has a new design. How the people will receive it is unknown at the moment. Tesla has been bold enough to bring down their prices as they aim to get the piece of the market which will give them a chance to get profits.
Tesla, however, it is believed is not in it for the money and profits. The CEO, Elon Musk, is a visionary who wants to change and impact the world and is willing to lose some money to achieve that end.
