I remember meeting a guy named Elon at the New York Auto Show sometime around 2010. Having spent decades working with drivers and owners in the NYC taxi industry, I thought I’d heard just about every name imaginable, but this was a new one, so it really stuck with me. It didn’t hurt that this fella, Elon, was exhibiting the one working prototype his company, Tesla, had created. He described it as the first modern-era, electric vehicle ready for mass production.
I wondered if he could possibly make any money. Was this the real deal or just a flash in the pan? He told me the driving range on a single charge was 240 miles and it took an hour to recharge – definitely an attention-grabber for smart businessmen looking at long-term gasoline savings.
An engineer in Tesla’s exhibit admitted to me that the range was actually a little shorter and the recharge time was a bit longer. He was on the floor of the show, still working out some of the kinks of the prototype, including the fact the windshield wipers weren’t working. Within 20 minutes, he’d fixed the wipers, but the experience made me doubt the viability of it becoming a taxi in New York. What would taxi fleet owners think about this new car? Would it be able to stand up to 24/7 driving on NYC streets without proper road testing? I assumed at the time Elon had been asked for free cars to test and declined the requests.
The base price was more than twice the price of a Ford Crown Victoria at that time – so, in an industry looking to shave off every excess penny of expense, it simply didn’t seem feasible. In fact, it wasn’t until last year that one yellow taxi fleet owner finally bought six Teslas, in an attempt to attract yellow cab drivers – drivers that were, at the time, less common than Teslas on NYC roads.
Although more than a decade had passed since I saw my first Tesla at the Auto Show, the company has gained quite a bit of momentum in the past year, catching the attention of the masses in America. In 2021, 936,000 were sold, almost twice as many as the previous year. The starting cost for the least expensive 2022 Tesla is about $39,000 and can top out at about $60,000.
Tesla markets to male executives earning over $100,000, between the ages of 45 and 64. Their marketing strategy worked well, with 54 being the average age of a Tesla buyer. The average annual income of a Tesla buyer is $144,000, compared to the average U.S. household income of $78,000, and the average personal U.S. annual income being about $53,000.
I remember seeing Tesla stock at around $30 a share. If you purchased $1,000 of Tesla stock in 2011, by 2021 the value would be $150,000! In 2020 alone, the stock went up 743%!
In 2022, Tesla is opening two new manufacturing plants. One in Texas for the American market, and one in Germany for their next phase of sales across Europe. If you’re wondering about Tesla’s popularity, the company is expected to deliver 1.42 million cars this year. But you won’t find Elon driving one – his preference is a Porsche 911. So much for being an environmentalist… it’s all about the $$$.
You have to hand it to him. A passenger ticket for an eight-minute trip into space on Elon’s Space X spaceship will set you back $55 million. It costs $58 million to launch each SpaceX. So, two paying passengers per launch puts a pretty nice payday on the meter. Of course, Captain Kirk was a guest and didn’t have to pay one cent – but the traction that marketing gimmick gained was priceless.
I no longer wonder if Elon is going to actually make money or if his company is just a flash in the pan. Morgan Stanley is already projecting that SpaceX will become more valuable than Tesla one day. Elon is a master marketer (he majored in Physics in college), who successfully makes transportation dreams come true.
Imagine the possibilities, if he were chairman of the New York City Taxi & Limousine Commission or the MTA. We can still dream…