Why Investors Love Tesla
Tesla is a popular car making company. Although patronage to the brand is not as much as other automobile producers yet, they are the leaders in electric car producers. If they are not the leaders in car manufacturing, why are investors so in love with Tesla?
Factors Affecting the Demand for Electric Vehicles (EVs):
To understand the reason why investors love the Tesla brand, you must realise that investing is closely tied to the market trend. They invest where the market is leading towards. Tesla is fast becoming a major demand among car users and investors in today’s world, and analyses are seeing this trend. It is easy to wonder what exactly is prompting this demand.
Gas Price Fluctuation
The cost of fossil fuels (gasoline) is one of the reasons for Tesla’s car demand. When gas prices fluctuate, car companies and their users feel the bulk of it. Typically, the lower the price of oil, the higher the level of income for car manufacturers. Many users patronise automobiles that have lower miles per gallon so that when gas becomes too expensive, they can conserve on usage and purchase. In light of this, the emergence of an alternative not directly affected by the ever so common gas price fluctuation is exactly what car owners are looking for.
Desire to Reduce Carbon Footprint
Eco-friendly people would always demand pure electric vehicles. The main reason for this is that these types of vehicles
- Have less use of non-renewable resources
- Release less carbon waste as a result of oil combustion
Generally, if reducing carbon footprint is the goal, electric cars are a must use.
Luxury Designs
Tesla also has a luxurious look to it. It is one of the brands that are patronized by the elite class or those looking for a unique design and shape to the average car.
The Profile of Tesla Vehicles
Now we understand that the market and consumer approach to the demand for Tesla Vehicles is a driving force for investor interest, let’s take a look at the Tesla vehicle profile as another reason why investors are so interested in the brand.
In 2015, Tesla created a marketing plan with a detailed target of its customers, and they included;
- Business executives and entrepreneurs who reside in the city
- People who have an orientation about technology and how it works
- Eco-friendly individuals
- People who love luxurious vehicles
- The wealthy class
- The middle-class people.
To make it easier, many brands go for one or two of these classes of people. However, Tesla saw the need to expand its niche to include a larger society. The result of this is the inclusion of people in their early 20s to early 40s. This vast inclusion means more consumer base meaning more money and more potential for corporate growth.
The Positive Impacts On holding a Tesla share
With the global approach to a greener and cleaner environment, Tesla models are becoming a must-use among eco enthusiasts. This is a wide field of users encompassing people of all ages, classes, and lifestyles. The company is much more innovation pushed than it is corporate pushed in the sense that they are more inclined to wait a while in production to get a unique design than they are to meet up with a yearly or bi-annual demand to release a car model.
Besides, the company is run by a very charismatic figure who understands the world of management and consumer relations. Beyond that, Elon Musk is a tech-savvy leader, looking beyond the average need for a new model and much more into the future with a world of possibilities. All of these, encompassing the business strategy and corporate growth, are several reasons why investors are in the race to hold a share in the company.
Although the company has had its drawbacks over the years with issues of delayed production, financial investigations dues to unaccountable losses, and product safety, they have remained at the top of the industry.
References
https://www.bbc.com/news/business-55391571
https://www.investopedia.com/articles/personal-finance/021715/what-drives-consumer-demand-tesla.asp