Tesla CEO Elon Musk is turning the auto industry upside down. Suddenly, electric cars are not only viable, but they are cool again and much more accessible. Most of this disruption can be attributed to the outgoing Mr Musk, not new innovations in the electric car.
Buying a car--new or used, electric or fuel-powered--is an exciting thing. But now Musk's actions have made it even more exciting and completely revolutionized the auto industry for the better. He also presents a threat to many existing companies who would be under attack if electric cars got off the ground.
This article will look into what Elon Musk has done for the auto industry and what entrepreneurs can take away from this.
It's Popular Again
Electric cars are nothing new. The efficiency of the internal combustion engine and cheap gasoline meant that electric cars quickly became impractical. Add in the potential for low driving ranges and you have an invention that nobody wants to hear about.
Nevertheless, Musk has turned this around entirely. In 2015, the luxury Tesla Model S increased in sales by 51%, while other similar sedans fell. Even the similarly priced Audi A7 was outsold by a factor of three, proving that electric cars are back in the public eye.
What this should teach entrepreneurs is that you don't have to build an idea from the ground upwards in order to make a success of it. You can take an already existing idea, add some bells and whistles, and make it work.
Musk is at the head of a product that's known as a 'disruptor'. This is a product that threatens to innovate an industry. If successful, it would force every other company to adapt or perish. That's how big electric cars have become. With increasing concerns over the environment, from both governments and the consumer, Musk is in the right place at the right time.
In addition, this isn't a theory. This is something Musk himself has acknowledged through his actions. Take the building of the Gigafactory as the main example of this.
The Gigafactory is Tesla's latest factory. However, the difference is the company has targeted scale on a scale never seen before. The factory will cost the company $5 billion and will create a production line that will make it the biggest producer of lithium-ion batteries in the world.
It won't just become the biggest producer in the world, it will produce more batteries than the rest of the world collectively.
Naturally, it comes with its fair share of risk, including:
However, with every business idea comes a considerable degree of risk. Entrepreneurs should never shy away from making these big decisions. These are the choices that will come to define the industry.
Tesla is no doubt a disruptor and it could well mean everything for the car industry going forward.
Taking Calculated Risks
Musk took a massive risk by even investing in Tesla. A few years ago, electric cars were nothing more than a pipe dream. Most people agreed their lack of range and the lack of charging stations meant they could never become commercially viable.
Many investors and entrepreneurs would look at these two facts and immediately pull away. But Musk didn't. He decided to take a calculated risk. He looked at the potential of the product on offer and decided to put his own money into the venture.
Entrepreneurs should ignore the words of those around them and weigh an opportunity based on its own merits. This is what will help you to make the good decisions.
Be Ambitious and Have a Vision
Musk's vision for the car industry is to change it forever. He is ambitious and he wants to disrupt the current way of doing things. Existing car makers are satisfied to keep muddling along and maintain the status quo.
You should continue to harbor your grand visions and be willing to disrupt the reality of now. Entrepreneurs have a lot of bravery and a lot of courage. If you are unwilling to chase your dreams and risk everything you have on an idea you are sure will be successful, then this isn't the business for you.
What are your ambitions as an entrepreneur?