How Does Tesla Impact the United States Economy?

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The company Tesla has already had a major impact on the U.S. economy, and this is primarily through its sale of electric vehicles. However, contrary to what many seem to believe, Tesla actually sells more than vehicles, although these vehicles are, of course, the main commodity for Tesla, at least for now. Indeed, Tesla also sells things like solar panels and batteries in general. The underlying philosophy of Tesla seems to be to empower consumers through the use of alternative energy, namely solar power. At the moment, though, the chief focus of Tesla is moving away from the dependence on fossil fuels and toward more electric vehicles, and this can be observed within most of their vehicles. From an economic standpoint, Tesla, as of the past few years, has been making more and more strides to ensure that their electric vehicles are able to be afforded by the layman, and this important element speaks to the overall forward-thinking economic nature of Tesla as a company. In order to better understand Tesla, though, it is necessary to examine the ways that it impacts the economy of the U.S. both for better and for worse.

For starters, Tesla has already had a major impact, economically, within the U.S. According to one source, for instance, Tesla has already sold 4,360 of its mass market compact sedans to consumers in the months of January and February 2018 alone (Alvarez). It seems that Tesla has also been focusing on diversifying its array of vehicles, which now include things like the Model 3, the Model S, and the Model X, each of which caters to a different style and price range of consumer (Alvarez). Furthermore, this same source also states that the Tesla Model 3, mentioned earlier, is the best-selling electric vehicle in the U.S. at the moment, even outpacing Toyota's Prius Prime by around twenty percent (Alvarez). What this means, essentially, is that Tesla is seeing a large amount of success when it comes to moving each of these vehicles. Considering Tesla vehicles start at $40,000 and only get more expensive from there, it is easy to see how the sale of even a few thousand Teslas can translate to millions of dollars of profit, but what is even more important here is that it represents a paradigm shift within the economics of these types of vehicles.

Previously, there was a great deal of skepticism surrounding electric vehicles as a whole, and although hybrids have been seeing relatively large amounts of success within the past few decades, it has not been until fairly recently that there has been a large amount of success correlating to these all-electric vehicles. It seems, then, that Tesla is all too willing and able to appeal to this niche of consumer, and it is doing so with a great deal of profit. There seems to be a bright future for Tesla in terms of its impact on the economy as well. For one thing, another source finds that there will be savings of between $105 billion and $210 billion in healthcare costs if the vehicles are charged using non-polluting electricity sources by the year 2030 (Becker, Sidhu and Tenderich).

What is perhaps even more important about this economic impact of Tesla is the manner in which it reduces the dependence on oil. Although this might appear to be a generally positive aspect about Tesla and electric vehicles in general, from an economic perspective for the U.S. as a country, it has the potential to be quite costly. According to this same source, for instance, electric vehicles, especially those from Tesla, who is currently the front-runner, will lower the oil imports of the U.S. by between eighteen to 38 percent, and reduce the trade deficit by $94 billion to $266 billion (Becker, Sidhu and Tenderich). These are significant numbers and would represent a profound paradigm shift within the economy of the United States as a whole. The question, though, is what will happen to these industries that currently rely on this oil, especially that of the major players such as Exxon? Another research question that will need to be examined further is that of what should be done about some of these companies that fail to adapt?

At present, these oil companies, and the subsequent infrastructure that supports them, formulate an extremely large component of the U.S. economy. Tesla threatens to upend that, and although this is positive, in the long run, there can be little doubt that it will create a large amount of short-term turmoil for virtually everyone within the U.S. The U.S. economy is one that is also largely supported by its military, which similarly sees massive amounts of funding, and slowly cutting off the capital for oil will naturally lead to a small-scale economic collapse, or at least some sort of economic contraction. This is only in the short-term, of course, but at the same time, it is important to understand just how powerful and dominate the oil industry is within the U.S.

Lastly, one other key effect that Tesla will have on the U.S., economically speaking, is that it will lead to massive changes in the ways that electricity is stored. According to another source, one of the chief technologies being created by Tesla is that of the Powerwall, which allows the user to control the energy that is being stored through the use of photovoltaic systems and grids (Rodrigues et al 37). One of the other key research questions here is simple: what does this Powerwall mean for the consumer? It is simple: Tesla's Powerwall allows for the consumer to be much more in control of their electricity usage. This is especially true when it comes to management of electricity during peak times, where many electric companies will charge more based on surge pricing tactics. The implications of this, from the perspective of the economy of the U.S., are massive.

For one thing, it would allow for electric companies in the U.S. to be largely bypassed by the layman. This would severely undermine these electric companies, and obviously put a major dent in their profits. This dent would become even larger as overall acceptance of this Powerwall, and similar technologies, continues to be embraced. Therefore, it seems that, economically speaking, the economic impact that Tesla serves to create within the U.S. is akin to a snowball effect here, becoming more and more prominent as the technology continues to become more affordable and more practical. At the same time, though, there will also likely be a large number of bills and laws that are created, and lobbied for, to ensure that the status quo is upheld here. In this respect, the economic future for the U.S., considering the impact of Tesla, is extremely uncertain, and one that will likely be greatly impacted by the numerous ways that this company is able to bypass much of the existing infrastructure, economically speaking, of these companies.

Ultimately, it seems that the U.S. is heading for something of an arms race when it comes to economics and technology, thanks to Tesla. The success of Tesla's existing efforts, especially its electric vehicles, has all but assured that this push toward electricity as a reliable fuel source, and rejection of fossil fuels, will only continue to grow more prominent. There will likely be a number of growing pains, for lack of a better term, that will face the U.S. as a result of these changes, as even if Tesla is not the company to further electricity as a primary energy source, some other company will pursue this. Looking at it from this perspective, it seems that some sort of major change within the U.S. is all but inevitable.

Works Cited

Alvarez, Simon. “Tesla Model 3 Tops Jan-Feb 2018 EV Sales in US, According to New Report.”, 5 Mar. 2018,

Becker, Thomas A., Ikhlaq Sidhu, and Burghardt Tenderich. "Electric vehicles in the United States: a new model with forecasts to 2030." Center for Entrepreneurship and Technology, University of California, Berkeley 24 (2009).

Rodrigues, Sandy, et al. "Tesla Powerwall: Analysis of Its Use in Portugal and United States." International Journal of Power and Energy Systems 36.1 (2016): 37-43.