June 19 (UPI) — Tesla’s share price exceeded $1,000 for the first time last week, making it the world’s most valuable car company, according tomedia reports. The company is worth more than Toyota, but also more than Ford, General Motors and Fiat Chrysler combined. How did Tesla surpass the decades-old traditional carmaker in 16 years?
Tesla’s share price retreated after hitting an all-time high, but that didn’t affect The company’s efforts to transform the auto industry.
One of the keys to the popularity of electric vehicles is that the price of batteries falls to $100 per kilowatt hour, so that they are cheaper than fuel cars. The most important factor in battery price is cobalt, and the removal of cobalt will significantly reduce battery costs. Tesla recently approved the production of the Model 3, which uses lithium-ion phosphate batteries, in the Chinese market. The batteries are cobalt-free and charge 10 times more than conventional lithium-ion batteries, but the downside is that they store 40 percent less energy per kilogram of batteries, so electric vehicles that replace traditional lithium batteries with lithium phosphate are cheaper, but either heavier or shorter.
However, Tesla also recently announced a patent for a million-mile battery. One of the reasons that battery technology can only maintain more than 1000 charging cycles is the degradation of cathode crystal structure. The latest patent supports 4000 to 5000 charging cycles.
Tesla’s “disruptive” approach is similar to Apple’s iPhone. Today, the Model 3 has targeted BMW, Mercedes-Benz and Volkswagen in the small and medium-sized luxury car sector. In the U.S., the Model 3 sold more cars in the second quarter of 2019 than all of BMW’s comparable models combined, as well as all models such as Mercedes-Benz and Audi. Among Germany’s big three, VW is in the best position to fight back. The company has just released ID3. It starts at $41,000 and is still somewhat expensive compared to mainstream electric cars, but VW’s first full-time electric car based on a shared platform. Tesla has used a shared platform for model S and X, and another platform for Model 3 and Y. Bmw and Mercedes, by contrast, are still craming electric drivetrains into traditional car designs. BMW showed off the i3 and i8, but is still focused on launching the hybrid, while Mercedes has so far released only the EQC outside the hybrid.
How on earth did Tesla become the world’s most valuable car company? It has long bet on electric cars and continues to drive the market with innovation. It is the first company to use lithium-ion batteries to drive cars, and it looks like it will be the first to actually reduce battery costs. Tesla’s next step will be to challenge the mainstream car market, and plans to launch a small car in China. As a result, Tesla’s position as the most valuable carmaker is likely to happen soon.