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Tesla has transformed the car industry — but its biggest strength could become its greatest liability (TSLA)

Despite being younger than many of its competitors, Tesla has had a significant impact on the auto industry.

  • Despite being younger than many of its competitors,
  • It has influenced what kinds of cars its competitors make, what they look like, and their tech features.
  • But Tesla's ambition has also led it to make promises it may not be able to keep.
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Tesla has put the auto industry on notice.

That's because Tesla's ideas, and the way it has connected those ideas to an ambitious vision for a future of renewable energy and self-driving vehicles, are as compelling as those coming from any other American business. The company can thrive despite significant growing pains because it has made observers believe it's more than a car company.

And it may explain why Tesla has played an outsized role in shifting the auto industry's narrative.

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You can see that urgency in the steady stream of aggressive investments auto companies like Porsche and Mercedes-Benz announce in electric vehicles, despite the fact that electric vehicles make up around just 1% of the global market. But Tesla has shown there's money to be made in innovation — if not from customers quite yet, then from investors who are happy to pay over $300 per share for a compelling story.

Tesla has had a similar impact in the race to develop self-driving vehicles. Anand says companies would have developed them with or without Tesla's influence, but Tesla accelerated that effort in part by showing how self-driving technology could be integrated into contemporary cars with its Autopilot system, which gives its vehicles the ability to stay in a lane and keep a safe distance from other vehicles in certain situations. Now, it seems that a luxury car announcement doesn't come without a feature that resembles Autopilot.

But not all of Tesla's ideas are so high-minded. In some cases, the company has simply anticipated consumer demand before its competitors. Anand said that Tesla wasn't the first company to think about making electric cars look like sports cars, but it showed how much excitement could be generated around sleek, electric vehicles.

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