Tesla Motors Inc (TSLA) Differentiates Business by Targeting Luxury Car Market

July 18, 2014

Sonu Kalra, Portfolio Manager at Fidelity Investments, says Tesla Motors Inc (TSLA) has been a top contributor toward performance over the past year, and that his firm was able to identify it early as a blue-chip company.

“This was a company we became familiar with from its IPO. I’m not a car enthusiast at all, but I had the opportunity to drive one of their roadster models as part of their road show; you can call it due diligence. It was a life-changing experience, or as one of my colleagues puts it, an ‘iPhone experience.’ We all remember the first time we used an iPhone,” Kalra said.


Kalra says the key differentiator was Tesla’s ability to commercialize its battery technology into a luxury car.

“While other auto OEMs were targeting their electric vehicles at the mass market, they were coming in at price points that were more appropriate for luxury car market — Tesla was going to market targeting the luxury market with a luxury car and thus priced appropriately.” Kalra said.

“We became convinced that not only would they be able to commercialize the Model S but also be very successful by only taking a small amount of market share of the overall luxury car market,” Kalra added.