What makes Tesla so Successful ?


Tesla Motors  has had an extraordinary run in recent years, but Silicon Valley legend Peter Thiel believes that the secret to Tesla’s success lies in its know-how, its charismatic co-founder and a little bit of luck.



Thiel, who helped build PayPal along with Tesla CEO Elon Musk, recently published a book, Zero To One, which describes what startups in the past have done to become successful, and advises entrepreneurs on how to build the future. Musk can be considered one of, if not the, ultimate entrepreneur having started three businesses (PayPal, Tesla and SpaceX) in three vastly different industries.



 Thiel notes that Tesla has been able to do things that no other company has done or could do, by virtue of being in the right place at the right time. That ability has not only benefited the company, but its shareholders as well. TheStreet will be live blogging Tesla’s event tomorrow, as it unveils “the D” and something else. Here are Thiel’s seven reasons why (with direct quotes from the book in italics) Tesla has been so successful where other electric car companies, including Fisker, and other cleantech companies in general, have failed:



 tesla model



 “Tesla’s technology is so good that other car companies rely on it: Daimler uses Tesla’s battery packs; Mercedes-Benz uses a Tesla powertrain; Toyota uses a Tesla motor. General Motors has even created a task force to track Tesla’s next moves.” The Model S has been a technological marvel, having received numerous awards, including multiple from Consumer Reports and Motor Trend and Automobile magazines. Deals with major car companies to produce various parts has also proven lucrative, and is something Musk has said may continue in the future.


tesla model



“In January 2010 — about a year and a half before Solyndra imploded under the Obama administration and politicized the subsidy question — Tesla secured a $465 million loan from the U.S. Department of Energy. A half-billion-subsidy was unthinkable in the mid-2000s. It’s unthinkable today. There was only one moment where that was possible, and Tesla played it perfectly.” Tesla was able to parlay its importance for President Obama‘s cleantech initiative (at the time) into a massive loan, which it has since repaid back in full. Again, as the company has repeatedly shown, it helps to be in the right place at the right time.


tesla steering-wheel-CU



“Tesla started with a tiny submarket that it could dominate: the market for high-end electric sports cars.”  Though the Roadster will never be compared to the Ford (F) F-150 in terms of volume, it did allow Tesla to build a fair amount of revenue from it (3,000 at $109,000 apiece) to move further down the chain. The company is further expanding this concept with the Model S as it gets to its third-generation car, the Model 3, which Musk believes will be a mass market car. But in this CES2016, Faraday Future release their concept car and now become “The Mysterious New Tesla Rival



“Tesla’s CEO is the consummate engineer and salesman, so it’s not surprising that he’s assembled a team that’s very good at both.”




 Thiel notes that Elon has described his team like “the equivalent of Special Forces,” something that can be corroborated with current Tesla employees. In a recent interview with TheStreet, Gilbert Passin, Tesla’s vice president of OEM & Re-Manufacturing, said Musk isboth demanding and motivating. “Elon is a very inspiring person, he will put you to the limit,” Passin said. “He will really ask you the impossible, he will not settle for mediocre results. He will only settle for the best of the best in what you’re trying to achieve in manufacturing or design or performance or charging capability. It’s very fascinating working for someone like that. He will not let go of any kind of outstanding result that is demanding.”


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