Telsa Motors is shaking up the car industry with bold ideas, new ways of thinking about old models, and a ton of good will from fans of not only cars but of technology and conservation. It also helps to be led by Elon Musk, a young, brilliant inventor/entrepreneur who founded the private space transport company, SpaceX and co-founded Paypal and Tesla Motors. Following a similar philosophy Tesla is poised to disrupt the car industry similarly to the way Apple's iPhone did with smartphones.
Apple introduced the iPhone in 2007, when the most popular smartphone in the world was the Blackberry. While missing a few features at the start, users where able to get over those hurdles in order to take advantage of all the benefits of this re-imagined smartphone. Apple initially priced the phone starting at $600 which limited the initial install base to largely the upper-middle class and rich which turned it into a status symbol. After negotiating a deal with AT&T, Apple was able to have the wireless company subsidize some of the cost of the iPhone to make it more affordable for the average consumer. Since then they've brought the price points down to free for older generation models.
Telsa has entered into a market, similar to what Apple faced, that's dominated by large multi-national corporations with decades of experience in the market. The Model S is the companies first real attempt to shake up the industry by introducing a high performance, full sized sedan, all electric vehicle. The Model S has won a number of awards and praise from car enthusiast and geeks alike. Forgoing the traditional dashboard, the Tesla comes with a 17 inch touch screen that displays all of your typical controls but can also be used for Google Maps, even email. The summation of little things like the flush door handles that open as you approach the vehicle make the Model S feel like a car from the future. Just like the first time you held an iPhone, you immediately knew this was were phones were headed. Sure they're expensive, just as the iPhone was when it first released, relatively speaking. The base model Model S starts at $63,570 which gets 208 miles per charge, while the Performance model gets 265 miles for around $90,000. The bonus of not ever having to buy gas again, for many, the cost makes sense. But over time the price will eventually come down and the battery performance will only get better. Elon Musk mentioned in a recent interview that he expects more affordable Tesla's within 3-5 years, which gives him enough time to get a head start on building the infrastructure needed to make the Model S a mainstream product.
While creating the iPhone Steve Jobs became borderline obsessed with every detail of the iPhone. Making sure every decision had been carefully considered, down to the specific color of icons. However one of iPhone's greatest accomplishments was simply how enjoyable it was to use. From the smooth animation and movement of the software, the low-latency of the screen to visual-voicemail, all-around the iPhone was a much better experience than any phone on the market.
While the Model S may not be the best performing car, Elon Musk is trying to make sure you have one of the best experiences you've ever had owning a car. Beyond the gorgeous look of the car and the promise of sending someone to your home if you have malfunctions, Musk is on a mission to build Supercharge stations all over the country. The Supercharge stations are free to use for all Tesla S owners, promising a full charge in 30-minutes. Musk also recently announced in the coming months, there will be enough Superchargers in country that a person will be able to drive from California to New York for free.
In Silicon Valley and affluent areas around Los Angeles, it's hard to go outside these days without seeing a Tesla. They are becoming a status symbol for the rich and hip, at one point there was over a year wait to purchase one. That wait has dropped to 2-3 months depending on the model. Once people drive one they instantly want to own one, just like the iPhone did to millions of Blackberry, and Palm Treo users.
Lack Of Legacy
Both companies entered into totally new markets which gave them the benefit of not having any legacy users to worry about dragging into the future. The benefit of being the new guy on the block is you get to be whoever you want. Both companies took established technologies and uniquely brought them into their products that made sense with how we live our lives now. This is often a cliche in the tech industry, large companies too large to shift fast enough to stop the disruption.
Tesla can follow the iPhone model all the way to the bank and have a head start on a totally new industry that could literally have earth changing effects. Step one of Initially getting the early adopters and selling at a premium is succeeding. They can't make enough Model S to fill demand and the more cars on the road the more word of mouth will spread. The next step is to eventually lower the price of admission. Produce the same product for less with scale or create a more affordable model in a more mainstream price range ($30K-$50K). This will bring in a ground swell of new customers that want to own the Tesla not only because it doesn't use gas but for it's technology, design and it's performance.
It's not too late for other car manufactures to get in on the electric car transition that is inevitably happening, in fact other companies are already making full electric vehicles, but just like iPhone, non of them can hold a candle to the Tesla Model S.