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Should Tesla Motors Inc (TSLA) Build a Fuel Car?

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Tesla Motors Inc  is perhaps the most internationally renowned designer, manufacturer & developer of electric vehicles. They have a whole range of cars, & the majority of their vehicles are luxury and high performance, although they recently (on the 31/03/2016) unveiled their new Model 3 EV, which has a starting price of just $35,000. Elon Musk, the corporation’s CEO described its launch as “the biggest product launch ever.”

Tesla Motors Inc (NASDAQ:TSLA) Model 3
Source: Tesla Motors Inc

Building a Fuel Car Offers Potential Benefits for Tesla Motors Inc (TSLA)

As the world moves away from petrol or diesel powered automotives, & switches to Eco-friendlier alternatives e.g. electric or bio-fuel cars, it may seem counter-intuitive for Tesla Motors Inc  to build a fuel car. However, many consumers may find the idea of a petrol or diesel powered Tesla appealing.

The company could incorporate an electric motor and power unit into the vehicle. Drivers could have the option of driving in “electric mode”, where fuel engine is not active, or in “race mode”, where the electric motor and the fuel engine work in tandem with one another to maximize performance. The car could almost be like a cheaper Mclaren P1.

Tesla Motors Inc – Unlikely to Build a Fuel Car

Even though the project may offer some advantages, it is unlikely that it will ever occur. Fundamentally, Tesla & Elon Musk have prided themselves on being innovative & “green.” Therefore, although a non-electric Tesla motor could do well and generate some revenue for the firm, it would send out the wrong message, as well as using up Tesla’s somewhat limited resources.

The car-maker is currently building a lithium-ion battery Gigafactory in Nevada, which is expected to begin production in 2020. A post on their website gave further details of the benefits that the factory offers, reading “In cooperation with Panasonic and other strategic partners, the Gigafactory will produce batteries for significantly less cost using economies of scale, innovative manufacturing, reduction of waste, and the simple optimization of locating most manufacturing process under one roof. We expect to drive down the per kilowatt hour (kWh) cost of our battery pack by more than 30 percent. The Gigafactory will also be powered by renewable energy sources, with the goal of achieving net zero energy.”

The facility’s grand opening is scheduled for the 31st of July 2016, and a few Model 3 reservationists have been given “golden tickets”, inviting them to the opening. As the markets closed on the 14/07/2016, a share in Tesla Motors Inc  was trading at $221.53, giving the firm a market cap of $32.01 billion.

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Adam Green is an experienced writer and fintech enthusiast. He he worked with LearnBonds.com since 2019 and covers a range of areas including: personal finance, savings, bonds and taxes.

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