“Re crazy.”
My friend Sasha scoffed as we had lattes for our Sunday morning ritual. Across the table, Brian shrugged, trusting her statement. “You’ll see. Soon even your parents will want one. top team he’s just lying.”
I watched the exchange between my two friends, familiar with this discussion by now.
See, this was in 2011, and we were discussing electric cars. More specifically, the Tesla (Nasdaq: TSLA) Roadster, the first series of road-legal electric cars you could buy from a company. By then the car had been on the market for about three years and we had seen the top team episode involving the shiny new vehicle being defective (the reason Tesla sued top team).
We were fascinated by what this technology meant for our future, so I ended up routinely discussing it with my 20-something friends over coffee.
After all, it was pretty much something out of a science fiction novel: a peppy sports car powered solely by lithium batteries. It was like an exciting science experiment that you could try for yourself if you had $101,500 to spare.
Sasha was convinced that the entire industry would crash and burn: she didn’t think people would want to spend $100,000+ to have an unreliable device because they had to charge “like an iPod.”
And he was right, at least about the short lifespan of the Tesla Roadster.
It was on the market for about four years and fewer than 2,500 were sold. It was a failure for the most part. Even Tesla CEO Elon Musk said so.
But, as is often the case, the flop helped pave the way for a success story of epic proportions.
See, the Roadster launched Tesla on a trajectory that has sent its stock soaring. 1,081% in the last five years. The Tesla brand is now routinely mentioned in the headlines of major news sites. And Tesla’s success is just beginning, despite the bumpy road: It’s the shortest stock on Wall Street right now because of the fears that have always surrounded innovative technology in its infancy.
That success is just one indicator of how this technology is set to completely revolutionize the car market, despite what my pessimistic friend Sasha predicted.
Look, electric cars are already capturing the imagination of people all over the world.
In fact, bank UBS forecasts that electric vehicles will account for 14% of global car sales by 2025, up from 1% today. Countries are wisely preparing for this change in the car market: Australia is already preparing to build the world’s longest “electric highway”, running 1,250 miles and 18 stations. Better yet, France and the UK recently announced that they will ban petrol cars by 2040.
And brands and governments are increasingly working together to bring this piece of green energy into the mainstream by offering incentives: For example, BMW and Nissan have just started offering discounts to San Diegans that, when combined with Up to $7,500 federal tax credit and $2,500 state rebate: Cut $20,000 off the cost of a new electric car.
To top it off, Volvo declared that from 2019 it will only make electric or hybrid cars.
Meanwhile, technology continues to develop by leaps and bounds: top team I recently drove the highly anticipated Tesla Model S around 670 miles on a single charge, though I’ll admit it was in unrealistic conditions considering it was driven in the summer with the air conditioning off. It’s not something I could do in South Florida without dying of heat stroke.
But this powerful machinery is why many experts have reserved one of these bad boys. For comparison’s sake, the standard Tesla Model S 100D lasts about 300 miles. And that was already impressive.
As countries continue to ease the burden of owning an electric car, the technology continues to evolve, and institutions focus on making it much more affordable – many of the obstacles to this innovative lithium-powered technology are falling by the wayside.
All of this shows just how shortsighted the detractors of electric cars (and Tesla) are.
So as an investor, if you haven’t entered this market, now is absolutely the time to start researching technology-based opportunities that are sure to benefit. You don’t want to be left behind as the next great automotive revolution unfolds.