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his company, Tesla. These EVs were envisioned to have the potential to entrench the
viability of renewable and distributed energy generation as the future of sustainable
energy. Elon Musk is a definitive example that the best way to predict the future is to
create it.

Case Study: Tesla

Tesla was founded 13 years ago to fulfil Musk’s mission of furthering the transition to
sustainable energy, with cars being the first step. Tesla has shown that electric cars
can be superior to petrol-powered cars in efficiency, performance and appearance.
Holding true to this, Tesla became the number one best-selling large luxury vehicle in the
US in 2015, with over 26 000 units sold, outperforming both classic favourites Mercedes
Benz and BMW. It was also the only vehicle to have a positive change in sales in this
class between 2014 and 2015, with an increase of over 50%.

Figure 7 US Sales of large luxury vehicles 2015

Source: Tesla Fourth Quarter & Full Year 2015 Update (Feb, 2016)

Not only are Tesla’s sales skyrocketing, but their share of market capital is rising
disproportionately. Tesla’s productive capacity is less than 0.5% of General Motors
(GM), and yet Tesla’s market capital, $33 billion, is more than 50% of GM’s $58 billion.
The extraordinarily high market cap per vehicle produced shows the confidence that
investors have in Musk’s vision as well as the future of EVs. Clearly this technology is
disrupting the entire automobile market.

26 QUARTERLY ECONOMIC BULLETIN 2016