Engineering Economic Decisions
Are Electric Cars Finally the Next Big Thing? Tesla Motors was founded in 2003 by a group of engineers and venture capitalists. Tesla designs, develops, manufactures, and sells premium electric vehicles (EVs) and advanced electric vehicle powertrain components by order only. Tesla’s business plan recognizes that innovative technology is often very expensive and that the very rich are usually the first people to adopt it. Once prices come down, the technology can move down into the market. That’s why Tesla’s first car is a high-end sports car only made in limited numbers. In its 10 years since founding, Tesla has launched both a high-end limited edition “Tesla Roadster” and its “Model S” production car, and introduced “Model X,” a sport utility vehicle with seating for seven adults in 2015. Despite a public controversy about its limited driving range before recharging, the Model S had received the coveted Car of the Year Award and earned the highest rating that Consumer Reports ever gave to a car, saying that “The mere fact the Tesla Model S exists at all is a testament to innovation and entrepreneurship, the very qualities that once made the American automobile industry the largest, richest, and most powerful in the world.”1 While some of its most visible EV competitors went bankrupt or halted.
Part 1 Basics of Financial Decisions
Part 2 Evaluation of Business and Engineering Assets
Part 3 Analysis of Project Cash Flows
Part 4 Handling Risk and Uncertainty
Part 5 Special Topics in Engineering Economics