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Tesla Motors Inc (NASDAQ:TSLA) First Mover Blessing Could Be a Curse

Tesla Motors, Inc (TSLA) Autopilot vs Google (GOOG) Self Driving Cars

Tesla Motors Inc might be the top dog in the electric car space right now, but its lead is not guaranteed as other firms show serious interest in making the cars of the future.

Tesla’s niche is in making EVs and the firm is trying its hand at AI features that will evolve into the self-driving cars of 2025. However, traditional carmakers are also starting to focus on EVs and other tech firms are investing into AI-controlled cars.

Tesla Motors, Inc (TSLA) Autopilot vs Google (GOOG) Self Driving Cars
The soon coming Model X Electric SUV will have all the hardware necessary to take advantage of available Autopilot features.

Quartz has a report showing the dynamics at work in the AI-controlled EV space and it goes on to make conjectures on how Tesla Motors might fare by the end of the decade based on the different possibilities in the market.

Last week, as more competition seemed to be on the way, it became  clear that Tesla Motors needs to mature and stop being a startup in the EV space if it wants to avoid the same fate that befell BlackBerry in the smartphone space. The need for Tesla to grow up and dominate the space is the central theme of the Quartz report.

Tesla and its Rivals

Tesla Motors is ready to deliver its third car, the Model X, in a matter of weeks. Since it started selling EVs, Tesla has sold more than 2,100 Roadsters and its Model S series has sold more than 78,300 units. The success of the Model S has unveiled the potential that EVs have for disrupting the global auto industry.

The upcoming Model X is another premium EV with a price tag of about $130,000 and it will push the adoption of EVs higher. Tesla is also planning the mass market Model 3 with a price tag of $35,000 for some time in 2017.

Traditional car makers are starting to focus on the EV space and practically all of them have an hybrid car or EV project in the works. General Motors is working on the fully electric Chevy Bolt as an upgrade on its Volt Hybrid. The Nissan Leaf is another EV from traditional car markers. Volkswagen AG’s Audi is has unveiled an EV E Tron Quattro and Porsche has displayed the concept car of its Mission E.

Tech warriors Google and Apple are also working on building their own cars. Google’s self-driving cars are already logging millions of autonomous miles and the firm has launched a distinct car firm. Apple’s car Project Titan has been in the news for much of the week as the firm plans to triple the number of people working on its car project from 600 to 1,800.

Tesla’s Blessing/Curse

Despite the growing competition in the EV space, Tesla still has an edge, which is a blessing – it might become a curse if not managed properly. Tesla Mototrs already has cars on the road when most its rivals are still grappling with concept designs.

It also controls the whole EV chain from making cars, to selling them, to making batteries at its Gigafactory, and building a robust network of superchargers. However, Tesla lacks the deep pockets, scale, and marketing reach of its rivals; hence, Tesla’s future is uncertain for the time being.

Tesla Motors is ahead of the pack, but that’s attracting competition from firms that could beat Tesla Motors as the EV market turns from a sprint into a marathon. That’s the curse that faces the EV maker as an innovator, and it will take deft brinkmanship by Elon Musk and the firm’s other leaders in order to avoid the perils of the medium term.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.