Tesla turns 20 years old: How Elon Musk transformed the auto industry

“Over time we should cover all areas. It would probably make sense to develop a compact car as well as a van or minivan,” Musk said in September 2020 in a – rare – interview with Automotive News’ German affiliate Automobilwoche.

In the meantime, the model plans have progressed further, but there is a lack of concrete statements, especially on the compact model.

Breaking conventions

The reasons for the success of the company, which turned 20 years old on July 1, are well known and widely discussed.

Musk broke with industry conventions from the start. All-electric drive, central control architecture, smart production, its own charging stations, direct sales, digital features and autonomous driving – everything was newly conceived, without legacy issues, without copying others.

At some point, it dawned on the competition that Tesla should be taken seriously.

And, of course, Musk himself is a success factor. His fans adore the entrepreneur, self-made billionaire, nerd and richest person on the planet. However, the number of his enemies is no less small. Success fuels envy and resentment. His escapades and verbal outbursts do the rest. No matter what Musk does, he polarizes.

Musk boosts Tesla’s desirability in the financial market with his vision of autonomous driving. While electromobility is already becoming the norm and is no longer a unique selling point, the self-driving car will bring the next revolution to the industry. Tesla’s so-called Autopilot is advanced compared to competitors, but not the measure of all things.

The big promises have yet to be kept. “We could sell our cars now for no profit and make incredible profits later via autonomy updates,” Musk said at the presentation of the company’s quarterly earnings in April.

Costly tech offensive

Musk sees vehicles becoming smartphones on wheels as the big business model of the future.

However, this requires high investments. Musk pumps between $6 billion and $7 billion into Tesla’s business every year. The money goes into technology and new plants. But to enter the mass market on a large scale, as Tesla is planning, the company would have to significantly increase its investments. CFO Zachary Kirkhorn acknowledged this in March.