Tesla has a huge lead over other automakers. See how the electric car company’s brand has become so powerful.


In the automotive industry, it’s often said that brands are big, but products pay the bills. In other words, you can capture or retain customers with what your business stands for, but in the long run, if you don’t have great vehicles, you’re going to have a problem.

For most of its history, over 15 years, Tesla has reversed this wisdom. A few years ago, the automaker was barely selling vehicles compared to its global competitors. Last year, Tesla only delivered around 250,000 vehicles, while General Motors sold almost 8 million.

Investors have decided that this means Tesla is expected to be worth $ 300 billion in market capitalization, more valuable than GM, Ford and Fiat Chrysler Automobiles combined – and overtaking Volkswagen and Toyota, the world’s two largest automakers.

Vehicle sales obviously do not represent $ 300 billion in value; Tesla’s quarterly revenue remains well below a Detroit Big Three automaker. It’s a bet on the future and a prediction that Tesla should be able to expand its near monopoly of the electric vehicle market as this market grows from a currently tiny base, barely 1 to 2% of worldwide sales.

Investor optimism is that Tesla will maintain a dominant share, increase its scale, and score enviable profit margins, perhaps over 10% (high-volume luxury automakers operate at this level, while companies in the market of mass evolve within the single-digit range).

But for now, the Tesla brand is powerful. Here is how it happened:


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