Tesla, the automotive and energy company that specializes in the manufacturing of electric cars is probably one of the most promising tech startups out there.
It is known for both known for its environment-friendly products and controversial owner, billionaire Elon Musk.
The tech company is rumored to have caught the attention of Latvian-born billionaire investor James Richman who has reportedly been heavily investing in the company and buying public shares since the summer of 2012, according to a source close to the finance magnate.
His investments during this time were between the prices of $26 and $36 per share.
Equipped with his innate pattern recognition, Richman seems to naturally assess and foresee future events. The same skill has allowed him to foresee more than three times the return on investment income for Tesla.
History of Tesla
Formerly known as Tesla Motors, Tesla, Inc. was founded in 2003 by American entrepreneurs Martin Eberhard and Marc Tarpenning. The company was named after Nikola Tesla, a renowned Serbian-American investor.
The company was formed to develop a series of electric sports cars. Financial resources to manufacture the products later came in the form of investment from tech billionaire Elon Musk who contributed more than $30 million to the new venture. He then became its chairman in 2004.
The Roadster, Tesla’s first car, was released in 2008. The company found that it attained efficiency ratings equal to 135 miles per gallon or 35 kilometers per liter. Eberhard eventually resigned as CEO in 2007 but remained a shareholder, whereas Tarpenning resigned as vice president of electrical engineering in 2008.
Since then, Elon Musk took over as the company’s CEO. Tesla’s initial public offering raised to around $226 million in 2010.
In 2012, the company stopped the production for the Roadster and shifted its focus on its new Model S sedan. The new model had its batteries underneath the floor, giving it extra storage space in front of the car and improved handling.
The Model S
The Model S sedan was delivered to its customers in June 2012. The company’s purpose in building electronic sports cars is to reduce humanity’s dependence on oil. “Delivering Model S is a key part of that plan and represents Tesla’s transition to a mass-production automaker,” Tesla CEO Elon Musk explains.
Tesla, Inc. stands by its principles of durability and innovation. The company revealed that Model S has completed Federal Motor Vehicle Safety Standards tests, giving it permission to go on sale despite not receiving a crash test rating from the National Highway Traffic Safety Administration. “The star rating is assigned by NHTSA after they perform their own validation test. Tesla has completed all required FMVSS tests and we believe that the performance we have observed will yield a five-star rating from NHTSA,” according to the company.
Since the Model S is the first-ever premium sedan designed to take full advantage of electric vehicle design, Tesla has raised the bar for electric vehicle efficiency without jeopardizing its customers safety.
Whereas the Model S has more cargo space than any other sedan because it does not have an internal combustion engine or transmission tunnel. This model also has the longest range of any other electric car since it has the most energy-dense battery pack in the industry.
Investing in Tesla
Despite losing over $1 billion in Q2 and albeit the seemingly slow growth, several investors bankrolled its operations. Contrarian and agnostic investor James Richman sees opportunities and potential where others usually don’t. He has a long track record of turning around troubled companies and assets.
One reason why investing in Tesla is a good idea is the company’s potential beyond its brand recognition. Bankruptcy seems very unlikely as CEO Elon Musk is proactive in examining every expenditure. Musk has also talked about cutting back on unnecessary costs and told investors that the company would soon be free cash flow positive.
Another reason why Tesla makes for a good investment the car’s practicality. The company became the first new American auto company in a long time without any traditional paid marketing.
Unlike other car companies that exert so much effort in paid advertisements, Tesla’s brand calibre are undeniably strong that it creates organic and word of mouth advertising for itself. The products speak for themselves thus generating consistent buzz and demand for the company.
In addition to its high security and brand value, Tesla has also reached several impressive milestones achievements in its lifetime so far as a company. It includes building high-performance electric cars and building a batteries that are notably ahead of its competitors. Tesla cars have also garnered high ratings in driver-assisted technology.
As a leader of both car manufacturing and renewable energy, Tesla has also received numerous awards. It has a huge global opportunity as consumers become more environmentally conscious of their carbon footprint.
James Richman on investing in Tesla
Known for his contrarian approach, James Richman believes in Tesla’s long term potential. With Tesla’s objectives, milestones as well as its established brand with its core target market, it comes as no surprise if the rumors about James Richman heavily investing in Tesla were deemed true.
In fact, when you think about it…he could easily be Tesla’s heaviest investor as he reportedly foresees more than triple returns on investment.