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The Oxen Group is a financial analysis and investment opportunities newsletter-based website run by financial analyst David Ristau and features several other traders. Ristau and team have been working in stocks for several years and has developed a knack for identifying winning short-term and... More
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  • The Daily Discourse: What’s Up With Tesla? 1 comment
    Jun 29, 2010 11:33 AM | about stocks: TSLA, GM, NSANY, F

    I am sure you have heard about the IPO of Tesla Motors that started this morning at $15 share and was selling for $17 per share to help raise $230 million for the company. If you are not familiar with Tesla Motors, the company is a car manufacturer and seller. The company sells the Tesla Roadster through twelve sales locations located in major cities. The companies Roadster is a sports car electric vehicle priced at over $100,000. The company also has now introduced the Tesla Model S sedan, which is set to sell for just under $50,000 in 2012.

    The company, despite its IPO, has many skeptics. The Model S has not yet hit the road, and some think it never will. Yet, the company believes that the IPO can help the company to get the Model S onto the road by 2012. The company hopes to sell around 20,000 Model S sedans each year, which is around the same amount of Porsches that are sold. The Model S is an electric car with luxury appeal, which is the first of its kind. 

    Thus far in its history, Tesla has not had a single profitable quarter, but the company believes that it can become profitable if it can get its Model S on the road. The company does have corporate backing from Toyota, and it has received loans from the US Energy Department to help defray costs. 

    One of the appealing aspects of Tesla Motors is that it is an American company that is making cars that are un-American. The Tesla Roadster is a sexy, luxury vehicle that resembles Ferraris and Lamborghinis, while the Model S looks similar to Bentley and Maserati sedans. This type of luxury is something tending to be lacking among the Detroit brands, and it is no wonder since Tesla is based in Silicon Valley. 

    Yet, many other problems with the Tesla plan to success that a nice looking car cannot overcome. For one, refueling is a problem for all electric cars. There are only around 20,000 electric car compatible recharging stations, but that number is expected to grow tremendously to 5 million over the next few years. The Nissan Leaf and Chevy Volt are two main reasons to expect the growth along with the Model S. The two models are expected to be the competition on the Model S, but the type of buyer of the Leaf is not the same buyer of the Model S. The Leaf and Volt do not have the same luxuryof the Model S, which is the point that many skeptics are missing.

    The company has Elon Musk. He is the man behind the highly successful PayPal and Space Exploration Technologies. Musk was also rumored to be the inspiration for Tony Stark of the Iron Man films. Musk believes Tesla can be profitable, and he has commented that the company would be if they just sold the Roadster. They were able to make the Roadsterprofitable despite what people said, and he believes they can do the same with the Model S.

    While currently the company is running its company on glamour and hype, the company has a niche that I think Americans do not understand because we haven’t seen quality and luxury in American motors in years. It will just take some time to stick, but the American mind on cars is changing. Tesla is at the center of that change.

    Good Investing,

    David Ristau



    Disclosure: none
    Themes: cars, tesla, electric cars Stocks: TSLA, GM, NSANY, F
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  • wind4me
    , contributor
    Comments (876) | Send Message
     
    The Tesla Roadster does rock U around Boulder but whats next other than losing money for Tesla???

     

    could U imagine if WIND STOCKS got as much press and HYPE as Tesla last few days ??
    30 Jun 2010, 11:16 AM Reply Like
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