Why Tesla Motors Inc (NASDAQ:TSLA)’s disruption runs deep


Tesla Motors Inc (NASDAQ:TSLA) has become a nightmare for many established luxury automakers. It recently emerged that Model S outsold many of its European rivals in their own backyard in 2015. In the near future, Tesla is going to put a spin on the automobile mass market with the Model 3.

How does Tesla Motors Inc (NASDAQ:TSLA) manage to rattle almost everyone in its industry? It is innovation. Tesla is bucking conventional wisdom because it is not leaving anything to chance when it comes to product and service innovation. At a time when it looked like manufacturing in the U.S. was increasingly becoming expensive because of soaring labor costs, Tesla is working toward a mass market all-electric car – Model 3. Never mind, Tesla also operators from one of the most expensive real estate markets in the country.

That is happening at a time when Ford Motor Company (NYSE:F) is planning to launch a new production facility in Mexico at the cost of $1.6 billion. There is no doubt the planned expansion has cost advantages in it.

Advanced robotics

The reason Tesla Motors Inc (NASDAQ:TSLA) is upending the automotive industry supply chain is that the company is leveraging technology to help it operate more efficiently. Tesla uses advanced robotics on its factory floor and the robots are designed to be flexible and interactive as possible to ensure everything flows smoothly.

Because of its ability to innovate and make proper use of technology, Tesla is proving that producing affordable cars in U.S. soil is possible. Preorders for Tesla’s Model 3 that will start at $35,000 are almost hitting 300,000 in a matter of days since preorders opened. The strong interest in Model 3 is a clear testament that Tesla’s efforts to rewrite the automotive rulebook are succeeding.

Integrated manufacturing

Tesla Motors Inc (NASDAQ:TSLA)’s ‘make in America’ strategy will continue to baffle many. In addition to working to produce affordable electric cars in the U.S., the company is also adopting an integrated manufacturing strategy. It has plans to build a supplier park near its Fremont facility. Besides that, construction of a battery production facility called Gigafactory is in progress in Nevada.

Tesla also continues to blanket the U.S. with supercharger stations to ensure that owners of its cars can recharge their cars anywhere.

Digital supply

When it comes to pushing out upgrades to customers, Tesla Motors Inc (NASDAQ:TSLA) is doing it over the air, which is a faster, cheaper and cleaner way to get updates out to those who need them.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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