Elon Musk is an inventor and entrepreneur who is currently worth a whopping US $12-billion. He made his fortune with his first dot-com company, Zip2, and then his online banking business, PayPal.
Nowadays, the Silicon Valley tycoon is focused on two ventures he founded: SpaceX, a private space exploration company, and Tesla Motors, the ground-breaking car company that brought luxury electric vehicles into mass production.
Admittedly, SpaceX has had its share of setbacks including a few rocket explosions, but it still maintains a lucrative contract with NASA worth US $1.6-billion to resupply cargo to the International Space Station.
And Tesla shows no signs of slowing down thanks to innovative, energy-efficient vehicles such as the Model S and the Model X that are attractive and powerful.
Did you know the 44-year-old self-made billionaire also has a Canadian connection? Born and raised in South Africa, he moved to Canada to attend Queen’s University in Kingston, Ont. Before continuing his studies at the University of Pennsylvania.
Why is he relevant?
Musk has a history and reputation for turning businesses upside down. The auto industry is no exception.
He has single-handedly disrupted the traditional dealership business model by using a different approach to selling Teslas.
It’s a direct-to-consumer distribution model where Tesla vehicles are sold directly to consumers through their own website, stores and service centres, instead of the business-to-business model where a manufacturer sells to a dealership, who then sells to a consumer.
Musk is also making waves with his innovative electric vehicles, with the goal of having mass market appeal.
Over time, Musk is banking Tesla vehicles will appreciate instead of depreciate thanks to regular software updates that allow you to revise and add new features as needed.
For example, Tesla’s latest software update on the Model S — the Tesla Version 7 software with Autopilot capabilities — was added in the fall of 2015.
The software lets the Model S steer itself down the highway, change lanes, and adjust speed without the driver touching a pedal or the steering wheel. The vehicle can even parallel park without any driver input, making it as close to an autonomous car as you can get.
What’s in store for the future?
Can the tried-and-true dealership model survive with disrupters like Musk in the mix?
While Musk has impacted the auto industry, he faces obstacles like stringent U.S. dealership franchising laws that ban Tesla sales in some states.
Change is inevitable but it can be positive for dealers and consumers alike.
Perhaps a new dealership model combines Musk’s vision with elements of the traditional model. Maybe the future includes smaller showrooms, interactive displays, pop-up stores, or test drives that come to your door via an Uber-like app.
Only time will tell, but one thing is certain — consumers will ultimately benefit with a better shopping experience when it comes to buying a new ride.
