How Tesla Has Defied All Odds

Tesla has come under fire over the past few months over a variety of business blunders and controversies, but has nevertheless proven itself to be the market's dominant EV company.

Just a mere three months ago, investors saw the company as a doomed experiment. Having grown its market cap exponentially in less than a year, many saw it as a fluke, a short-term success, or even an eventual disaster. Its earnings report in July highlighted a great deal of weakness for the company financially, as demand for its vehicles slows and its latest lineup of electric trucks and cars seem to not have very much enthusiasm by even its loyalist of consumers. Elon Musk, its CEO, has taken heat from half of the United States over his endorsement of Donald J. Trump following his Butler assassination attempt, making him a hated figure among Democrats.

Despite the accumulation of factors, Tesla has proven itself to be a dominant EV manufacturer, at least for the near future. Its latest October earnings report showed very promising results financially, and its stock surged to a four-month high of just over $260. It has also fared well in emerging markets such as Europe and China, where it is especially hard hit by EV tariffs. But why?

Well, one of the greatest factors is its dropping costs. The company has proven to be astonishingly good at reducing costs for its otherwise expensive EV car products, making it affordable for millions of consumers. It has acquired cheaper raw materials, laid off over 14% of its employees through automization, and utilized cheaper freight techniques. With cheaper prices, its products can reach farther, thus generating more revenue for the company.

Also, Tesla is experiencing success from its CEO, Elon Musk. Musk, a key political advocate, saw his movement surge over the past few weeks with Donald Trump taking the lead in most swing states, and his message now appealing to many voters across the country. Moreover, his company Starlink has also produced good results in the past few months which improved Musk's reputation.