This article first appeared on GuruFocus.
The first time Elon Musk drove a near-silent Model S down Manhattan’s West Side Highway in 2011, it did not look like the beginning of an industry reset. At the time, Tesla (NASDAQ:TSLA) was still largely associated with Musk’s PayPal (NASDAQ:PYPL) history, and the Model S was an unproven bet. Yet that early sedan would go on to anchor cumulative Model S and Model X sales of more than 630,000 units, and by 2023 it had helped position Tesla inside the so-called Magnificent 7, alongside Alphabet, Amazon.com, Apple, Meta Platforms, Microsoft and Nvidia. What initially felt experimental increasingly looked foundational, as the Model S became the first clean-sheet vehicle that pushed Tesla into the global spotlight.
The backdrop has since shifted. Tesla is now the only Magnificent 7 company whose reported earnings have declined since 2023, and Musk has indicated a sharper emphasis on robotics as passenger vehicle sales have faced pressure from a stagnant product lineup and the loss of federal incentives. On Jan. 28, he said the company would discontinue the Model S and Model X, while factory space in Fremont, California, is being converted into a manufacturing hub for the Optimus robot. At the same time, Tesla is preparing to introduce an autonomous Cybercab later this year, designed to be hailed via smartphone a move that could signal a longer-term strategy centered more on autonomy and robotics than on traditional consumer vehicles.
Still, the Model S may stand as one of the most influential cars of its era. After the 2008 Roadster, which sold fewer than 2,500 units, the Model S became Tesla’s first vehicle built from scratch and helped propel the company to become the world’s most valuable automaker by 2020. With roughly 260 miles of range per charge, over-the-air software updates and the introduction of Autopilot in 2016, the sedan reshaped expectations around software, distribution and performance in electric vehicles. Legacy automakers have since adopted similar software update strategies, and newer EV brands have mirrored Tesla’s direct-to-consumer sales model. Even if Tesla ultimately evolves beyond passenger cars, the Model S appears likely to remain the catalyst that accelerated the industry’s transition toward electric mobility.
