By 2022, most of Tesla’s shares are still owned by Elon Musk, among the company’s co-founders and the CEO. Elon Musk is the top individual investor, with a 23.5% stake in the company, equivalent to over 244 million shares. Musk is followed by Lawrence Ellison (founder of Oracle), with a 1.5% company stake. Ellison also sits on Tesla’s board. And Antonio Gracias, among the company’s first investors, has over 1.6 million shares. Other institutional investors and mutual funds like The Vanguard Group (6%), Blackrock (5.1%), and Capital Ventures International also have a good chunk of the company’s stocks.
Tesla: from innovators to early majority
It takes a minute to strategize where you want to get regarding strategy and vision.
And yet, it takes years, or even decades, to realize that vision.
Tesla is proof of that.
Tesla managed to get into what we can call the “mass manufacturing moment” only by 2021-2022.
The demarcation moment of this mass manufacturing era is the fact that by 2022, Tesla had passed a million cars produced!
For some context, a large group like BMW, which owns several brands and produces gas-powered cars, produced over 2.3 million cars in 2022.
Thus, you can appreciate how Tesla, by passing a million cars produced, got into the top rankings, even compared to large car manufacturers.
Not only that, Tesla managed to reach that point by also reaching a wide profitability per car.
Of course, market dynamics in the EV industry are changing, and competition is on the rise.
Yet, Tesla is now made of many moving parts.
While its business model is skewed toward the automotive segment, other segments like services, energy storage, and generation will play a key role in the future.
Tesla started with its Roadster by targeting innovators. That was in the early 2000s.
It then moved to target early adopters with its Model S.
And it eventually reached early majority adoption status, with its Model 3!
To be sure, while the process above seems linear, in reality, the history of Tesla is all but linear.
Indeed, the company has gone through various near-death experiences. And it has stumbled upon many massive obstacles to get where it is today.
And even in terms of new model launches, which enabled the company to tackle various segments of the market, in reality, that happened in parallel.
While Tesla was still working on the Roadster, the company was already looking into developing a car (which would eventually become the Model S) to tackle more extensive and more significant pockets of the market.
Key Highlights
- Gracias, one of the early investors in Tesla, holds a substantial stake in the company with over 1.6 million shares. Additionally, other institutional investors and mutual funds, including The Vanguard Group (6%), Blackrock (5.1%), and Capital Ventures International, also have notable positions in Tesla. This diverse ownership structure indicates significant interest from both individual and institutional investors, reflecting the confidence in Tesla’s potential and growth prospects.
- Tesla’s journey to become a major player in the automotive industry has been a remarkable one. By 2021-2022, the company achieved what can be termed as the “mass manufacturing moment,” surpassing the milestone of producing one million cars. This achievement marked Tesla’s transition from a niche electric vehicle (EV) manufacturer to a significant player in the global automotive market. Competing with established giants like BMW, which produced over 2.3 million gas-powered cars in 2022, Tesla’s accomplishment is a testament to its rapid growth and market acceptance.
- The success of Tesla’s mass manufacturing strategy is further highlighted by its impressive profitability per car. In 2022, Tesla’s profit margin per car reached $9580, a substantial increase compared to previous years. This growth trajectory is remarkable, considering the challenges Tesla faced during the early stages of its mass manufacturing efforts. The company’s focus on increasing efficiency, scale, and cost optimization has contributed to its ability to generate higher profits per vehicle.
- Tesla’s business model is primarily centered around the automotive segment, which remains the most critical revenue driver. In 2022, the company generated over $71.4 billion in revenue from automotive sales, making it the cornerstone of its operations. Moreover, a significant portion of Tesla’s gross profits, amounting to over $20 billion, comes from automotive sales, reflecting a healthy gross margin of 28.5%. This underscores the importance of automotive sales to Tesla’s overall financial performance.
- Tesla’s journey towards mass adoption of its EVs has followed a progressive approach. It started with its first model, the Roadster, targeting innovators and early adopters who were passionate about cutting-edge electric vehicles. As Tesla refined its technology and expanded its product lineup, it gradually moved into the early majority phase, targeting a broader market with its Model S and eventually achieving widespread adoption with the Model 3. This evolution demonstrates Tesla’s ability to appeal to different consumer segments and adapt to the changing demands of the market.
- Tesla’s growth has not been without challenges. The company has faced various near-death experiences and significant obstacles along the way. From financial struggles to production challenges and skepticism from the automotive industry, Tesla’s journey has been marked by resilience and determination. Overcoming these hurdles has been crucial in shaping Tesla into the successful and influential company it is today.
- Tesla’s expansion beyond the automotive segment is also notable. While automotive sales remain central to its operations, Tesla has ventured into other areas, such as services, energy storage, and generation. These additional segments are expected to play a key role in Tesla’s future growth and diversification. As the company continues to innovate and expand, its impact on various industries and the transition to sustainable energy solutions are likely to be significant.
Related to Tesla
Read Also: Tesla Business Model, Elon Musk Companies, Who Owns Tesla, Transitional Business Models, Tesla Competitors.
Read Also: Who Is Elon Musk? The Elon Musk’s Story, How Does Elon Musk Make Money, Elon Musk Companies, Bill Gates Companies, Jeff Bezos Companies, Warren Buffett Companies.
How did Tesla use a transitional business model to thrive?