Tech

Tesla's Risky Shift From Car Manufacturer To Revolutionary Tech Company

By Noli Teves , Mar 03, 2017 03:00 AM EST
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Tesla's rebranding from once only known as a car manufacturer into becoming a revolutionary tech company has left an indelible mark on its company's welfare and reputation. Just recently, the company had a name change from "Tesla Motors Inc." into now becoming merely "Tesla Inc." It also claims to be more than just an auto manufacturer.

Risky Transition For Tesla

However, the problem with this transition is that Tesla is not really a company that can abruptly disrupt the global economy and technology as a whole, as it will take a lot of time for the market to adapt to its "revolutionary" technologies. According to Yahoo Finance, Tesla instead maintains the reputation and image of a regular car manufacturer that is present in a very competitive and lucrative industry.

In a recent study, Tesla is compared to two revolutionary tech companies - Facebook and Amazon. In the comparison done by the researchers, it is found out that the financial status of Facebook and Amazon is very different from that of Tesla.

Facebook and Amazon were generating huge profits after just five years of its founding. What this means is that the two aforementioned companies had easily supported their capital expenditures in the long run.

The Autonomous Car Industry Is Hard To Penetrate

While in the case of Tesla, the company is still burning cash, even after more than five years of operations. Tesla had incurred operating losses every single year (except for 2013) since it started its operations.

According to The Motley Fool, one of the reasons to this seeming unfortunate status of Tesla is that its autonomous driving technology is very hard to adapt for the car industry. Even more so is that Ford and General Motors, two of Tesla's biggest rivals, is also tapping into the EV industry.

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