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Tesla's (TSLA) a short says Barron's Bill Alpert in a cover story which rehashes familiar...

Tesla's (TSLA) a short says Barron's Bill Alpert in a cover story which rehashes familiar arguments, but notes the shares - recently essentially unborrowable - can now be had for a single-digit interest rate. Perhaps the most interesting part of the story is Elon Musk hanging up on Bill Alpert during an interview for the piece: "I have no interest in an article that debates what we consider to be an obvious point - which is that there is a dramatic reduction in battery costs ... I am terminating this interview."
Comments (127)
  • In the immediate future TSLA might be a short, but I would never bet against someone like Musk in the long term.
    8 Jun 2013, 09:32 AM Reply Like
  • This is not about Tesla it is about Barron's lack of professionalism. They came on to Elon with an attitude of prejudice, lost their shot at an interview and ended up having to gripe to themselves their article Pitiable.
    8 Jun 2013, 10:27 AM Reply Like
  • That article didn't come out as overly negative. The analysts Barron's talked to base their forecasts on sales projections from Musk for the Gen III, which are based on his idea that battery prices fall 50% in the next 5 years. The US government, and other major auto makers, think prices will likely only fall 20%. When asked about it, it appears from the article that Musk hung up.

     

    Ok think of it as if the article was about some other new technology. If the cost of the major inputs (batteries falls), as the CEO (Musk) predicts, and the company gets a patent on whatever new tech they develop to get (battery) prices down, the company has a long life ahead of it selling (cars) to the masses, rather than just the high end market. If (battery) prices don't fall, and it stays as a high end brand, growth slows in the next 5 years, and the company trades at a lower multiple. Its literally the same story for every company with a new technology. Musk clearly hit a home run with Tesla, the stock is up 10x since the IPO. Where was all the love and hype for the stock then? Stocks are the only things that people like more when the price doubles. I really like the technology they have, especially because they license it to Daimler and Toyota, but I don't like the stock trading at 100x earnings after it went up 100% in a month. Dont love your stocks, it'll only cost you money.
    8 Jun 2013, 12:35 PM Reply Like
  • You can't use PE ratio when discussing a company with huge capital requirements that just barely has eeked out a profit.

     

    The real debate is if Tesla has unique advantages that will make it a major car manufacturer in the future or if it will continue to be a niche player.

     

    Tesla understands and values engineering and technology much more than the older staid traditional car companies. Elon is a physicist who understands battery technology. Thats a huge advantage on his home turf vs. a marketing or administrative CEO who knows nothing about the science behind cars 2.0.
    8 Jun 2013, 12:43 PM Reply Like
  • It had to be nasty conversation for Elon to hang up on this guy, he must have been talking down to Elon. just look at Elon's success in business in the past, he is more professional and wouldn't ordinarily do that. However if you have a conversation with someone, and they begin to talk down to you, insults your intelligence, or unprofessional, wouldn't you hang up? You-betcha
    8 Jun 2013, 12:48 PM Reply Like
  • Mike, the problem Barron's is missing that the improvement is multiplicative! So he says there is going to be a 20-30% reduction in price but what about weight and capacity? That is the thing he fails to account, that the improvement is across the board.

     

    Let us assume the model s battery costs 30k.

     

    As I mentioned below, a 30% reduction in price and a 30% increase in capacity would mean that a 400 mile battery would cost 21k at the time. Now for a 200 mile model you only need half that. So the battery would cost 10.5k for 200 miles.
    8 Jun 2013, 01:26 PM Reply Like
  • They quote GM for the future of battery technology [snicker]. So how seriously should anyone take Barrons.
    8 Jun 2013, 02:25 PM Reply Like
  • Didnt realize everyone on SA was friends with Elon Musk enough to know about how much he knows about batteries and what it takes for people to hang up on him.

     

    Weapon, that math makes sense, but I'd push back that a 30% increase in capacity, on top of a 30% reduction in cost, seems like a stretch, and that the battery in the model S gets you more like 230 miles a charge, since no one drives 55 mph at a constant speed the entire time.
    So using 230 instead of 300 gets you a 200 mile battery that costs $14k. I'm assuming that line of thinking is similar to what Musk is thinking, but not positive. Is it doable? Maybe. I hope so, since the cars seem fun to drive. Will I buy the stock at $92? No. If it comes down? Maybe.
    8 Jun 2013, 02:49 PM Reply Like
  • You mean GM, the company that had a viable new generation EV and then took them away from happy customers, had them crushed, and let the battery technology be sold to Chevron?
    8 Jun 2013, 03:41 PM Reply Like
  • @ddharriman: GM backs one of the very promising battery companies out there..

     

    http://aol.it/11Aa840

     

    It's easy to make fun of GM of course, but the Volt and potential at Envia Sys should not be forgotten.
    9 Jun 2013, 12:48 AM Reply Like
  • 70 grand for a vehicle = niche player
    without a carbon tax to raise the price of gas and some other breakthrough to lower the recharge costs, this vehicle will remain a toy for the wealthy
    9 Jun 2013, 01:17 AM Reply Like
  • @helicopterDeadBenjamins - Even with selling cars over 70k and being a niche player, Tesla can still earn billions easily. Tesla plans to release cars under 35k for mass production which is when they will become a major player in the mass market.

     

    The recharge costs of EVs are almost nothing so you know. We are talking about pennies per mile.
    9 Jun 2013, 01:27 AM Reply Like
  • ddh,

     

    You're saying GM does not know about battery technology?

     

    Really?

     

    That's pretty funny.
    9 Jun 2013, 03:03 AM Reply Like
  • Problem for GM is not new technology, it is inability to get out of old technology in time.
    9 Jun 2013, 07:38 AM Reply Like
  • 70 grand for a vehicle MINUS $25,000 fuel savings over 10 yrs, 15,000 miles MINUS $7,500 tax credit EQUALS a $38,000 vehicle. (unless you junk your car real soon after day 1) many folks can do TCO
    9 Jun 2013, 09:13 AM Reply Like
  • Right you are Julian. Not much chance any major auto company throws away all the investment in production lines, technology, and human capital they have in ICE's and goes full bore into electric or even 25% into electric. Not before it is too late.
    9 Jun 2013, 03:32 PM Reply Like
  • You are short changing the major manufacturer's a bit. The engineers at those firms may not all be musk's but they aren't all greybeards in flowing wizard robes either. There are many hungry, smart guys designing modern automobiles across the spectrum, but they do have certain constraints Tesla doesn't. They can't just throw out their entire product line and risk the franchises on speculative technologies for the future. Certainly part of their plans are adapting to future trends and technologies, but the majority of the car market haven't exactly flocked to the existing EV offerings in droves. Currently Tesla is a boutique, exclusive high-end brand. Most working people can't afford the S, and many people who can afford it, don't yet want it or they would have it. There is so much tunnel vision surrounding this company that people casually dismiss some of the simplest truths. For the well-heeled enthusiast, there are better and more interesting cars out there. Many prefer the smooth growl of a Ferrari or Porsche to the sterile silence of a performance golf cart. People who have green in their blood tend to be conservative and thoughtful with their dollars and "expensive, high performance, proprietary eco-friendly muscle car" is somewhat of an oxymoron like jumbo shrimp.

     

    This is not the greatest car ever made, it's not the most economically sensible car on the market, and worse, it really comes in only chocolate and vanilla. People's taste in cars is a capricious as their taste in clothing and food. Their budget's are similarly diverse. The only reason this company has become the "overnight success" that it has is because of it's stock action and the fanboy love of the CEO. We have a bonafide rocket scientist media darling working the stage whose genius is rivaled only by his ego and petulance.

     

    It's all great fun to watch, but the probability that this company is going to dominate the auto industry in the future is next to nil. It is more likely that it will remain a niche player (as long as it exists).

     

    Wake me up when the kid cures cancer.
    9 Jun 2013, 08:23 PM Reply Like
  • They dare not compete until the dominance of EVs is a done deal. When it is a done deal the deal will have been done by Tesla and others.

     

    Overnight success? No. Tesla is 10 years in the planning and making without mis-step. GM is a relative up-start with only 5 years under its belt since emerging from bankruptcy.
    9 Jun 2013, 09:33 PM Reply Like
  • I can understand why Elon terminated the interview.
    Barron's:"The challenge is battery cost. The Morgan Stanley analyst assumes that it can drop by half, from $400 to $200 per kilowatt hour," and then "At GM, Director of Global Battery Systems Bill Wallace believes that battery-capacity costs can improve by about 20% in the next few years"

     

    The Tesla Model S 60kwh costs 64.570 without lifetime supercharger-access. The optional upgrade to supercharger-access is 2.000 USD.
    The optional update from 60kwh to 85kwh INCL. lifetime supercharger-access is 73.570 USD.
    From that we can see, that Tesla charges 8.000 USD for the 25kwh-difference between 60kwh and 85kwh.
    That's 320 USD / kwh RETAIL!
    Assuming a 15% gross-margin Tesla would pay 272 usd / kwh, which is already 32% less than the "analyst assumes" the price should be today, and even less than the other "expert" thinks the price should be "in the next few years".

     

    A reporter, that cannot do this simple math himself and this operates with figures that are probably a few years old, is really a waste of time for Elon...
    10 Jun 2013, 03:50 PM Reply Like
  • @tftf

     

    Exactly. It is easy to make fun of GM. Envia systems has NO chance of displacing the form factor Li-Ion battery.

     

    Large cell architecture is wildly dangerous, given the current chemistries.
    11 Jun 2013, 01:35 PM Reply Like
  • will be cut... when selling a $35,000 car
    Many other HUGE automobile mfg's will take enough market share away from tsla making it very difficult for them....
    If China could afford them great but...Most Americans can't afford one...lol
    More headwinds will develop from our taxing everything government, and soon all electric car owners will pay some sort of tax in order to operate on the roads....
    14+ billion marketcap today....projected 18 million profit from sales of just over 4100 units this last quarter...
    Continuing to borrow money, negative cash flow, no real charging infrastructure yet.....and the list goes on....
    In the future this may be a viable company, but for now there is no way for them to be valued at 14B when they are not making any profit...
    $18,000,000 divided by 14 billion is .001285 or realize that at that rate of return, it would take 777 YEARS to equal the market cap of 14 Billion at the close today 07/17/13

     

    Absolutely the most over priced entity in the entire world of investing today is TSLA...
    Are they really worth even $7 Billion?
    Goldman Sachs gave them an $84 price at best...That's a 9 billion dollar mcap...500 years of earning last quarters profit to equal the current stock valuation price of today...>>>
    120.25 x 115,500,000 shares outstanding=13,888,875... mcap 777 yrs or p/E
    84 x 115500000sh = roughly 9 billion 500 p/e
    When the shorts get control it may not be for long, but it will be significant....Simply too many other better investments right now as tsla is WAY over cooked...
    If TSLA jumps up early tomorrow morning I am shorting it...
    And some idiot predicts 200 a share, she must have a lot of tsla stock...lol
    It is time for stocks to trade on realistic valuations very soon…
    17 Jul 2013, 09:09 PM Reply Like
  • There is bound to be some moderation of price as the short squeeze ends. The short rebate rate is not just single digits, it's down to 2.41% as of this morning. None of that makes the stock a short, though.

     

    http://seekingalpha.co...
    8 Jun 2013, 09:40 AM Reply Like
  • This looks a lot like aapl before it drifted to $200, $300, $400, etc
    8 Jun 2013, 09:41 AM Reply Like
  • nicasurfer..it's flashback time!

     

    "Nobody is going to buy an iPod. They are too expensive and Sony is coming out with their MP3 player at 1/2 the cost!"

     

    Sound familiar?
    8 Jun 2013, 09:55 AM Reply Like
  • There is a difference between a consumer electronics that my be $200 to $300 overpriced versus a car that's $20,000 to $30,000 overpriced.

     

    That may not matter to those who can afford to buy the roadsters and the Model S as an expensive toy. Not sure that's true for the general population.

     

    By the way, what really drove AAPL's stock price is the iPhone, not the iPod or the Macbook (which is also the reason why the stock has been wilting). iPhone is effective a hand held computer that increases productivity as it allowed people to access the web without being chained to a desk. At the time, AAPL was the only company with such product.

     

    Why are electric cars a must have as oil prices are actually falling and there may be the possibility of cars that run on CNG or LNG to take advantage of the cheap and abundant natural gas in this country.
    8 Jun 2013, 11:51 AM Reply Like
  • @Zeus2012
    in response to your comment "Electric Cars a must have as oil prices are actually falling"...ETC...
    1) EV's can be charged right off the energy of the sun once you put a electric solar system on your home.=cleaner sustainable energy.
    2)EV's are an Adrenaline rush every time you feel the instant acceleration.=good for your health and well being.
    3) It feels really good driving by Gas stations and LNG/CNG fueilng stations and not having to stop at one.= Freedom from being handcuffed to big oil after all these years.
    8 Jun 2013, 12:24 PM Reply Like
  • That sounds great if you have the money to invest in the installment of the solar panels in your home and another $70k to buy the car.

     

    Most Americans do not, unfortunately. So this comes down to "want" versus "need".
    8 Jun 2013, 12:29 PM Reply Like
  • Zeus:

     

    There are an awful lot of people buying IC cars that "are $20,000 to $30,000 overpriced." Audi A6, A7, A8. BMW 5, 6, 7. Mercedes CLS, S, E and AMG models of each. To say that there is no market at the prices Tesla is charging is wrong. The Model S is every bit the car all these are and more. Drive one!

     

    Range is the only drawback. For some, it's not an inconvenience at all. For others it's a minor inconvenience. For some, it's a major PITA. I'm sure these people will sort themselves out. Also sure that Tesla will have demand for more cars than they can make for quite a while.

     

    Forget the environmental aspects, which are infinitely debatable, the Model S is a stonking good car to drive. I'd own one, but unfortunately, my lifestyle puts me in group 3 above.
    8 Jun 2013, 12:44 PM Reply Like
  • Yuro - not arguing about the quality of Model S or that there are demand for cars that are $20k to $30k overpriced, whether EV or ICE.

     

    The only quibble that I have is the size of that demand. Just pointing that out to people who are comparing demand for overpriced consumer electronics to overpriced cars. To me, overpriced consumer electronics (whether that be smartphones or 3-D television) are similar to overpriced sneakers or apparels (like a Nike basketball shoe or a pair of LULU yoga pants, for example). Although overpriced, it's not out of most people's price range for consumption. A car, on the other hand, is kind of a different story.
    8 Jun 2013, 12:53 PM Reply Like
  • Overpriced compared to what? Model S is a Large Luxury sedan that goes 0-60 in <4s. What other car can you get with those specs <$100,000. That's maserati territory and those start north of six-figures.
    8 Jun 2013, 12:59 PM Reply Like
  • Zeus, while that maybe he case your forgetting something. Selling 500k smartphones is considered bad. Selling 500k cars will make you competitive for the #1-2 spots of best selling cars. While the upfront cost is a lot higher the amount necessary to sell is much lower. To add to it, you also have financing for cars and if you are self employed or have a business you can also make deductions.

     

    As far as CNG goes, highly unlikely. CNG cars have higher maintenance cost and require a lot of power for the compressor and in home CNG refueling will take you hours upon hours. CNG makes sense for long distance truck drivers, not much sense for consumer cars
    8 Jun 2013, 01:53 PM Reply Like
  • Zeus, "... not arguing about the quality of Model S or that there are demand for cars that are $20k to $30k overpriced, whether EV or ICE."

     

    Except the EV can save about $2000 a year in fuel costs even without solar.
    8 Jun 2013, 03:47 PM Reply Like
  • And most American families can afford a Maserati or Porche ...to go with the mortgage...the cost of kids...ect....you must remember the average family income for the US is under 40k...so most any purchase exceeding 40k is a monumental hurdle...
    8 Jun 2013, 04:44 PM Reply Like
  • A wrong.....you could convert most any car on the road to burn CNG..for under 1200 bucks......the draw back is CNG only get 10 to 15 miles per gallon...and there is no distrtribution network......TSLA will fizzle out as so as they saturate the curious/collectors with disposable incomes.....98 percent of America cannot afford the car til prices break under 40k.....they tried selling the Volt at 40k and failed miserably.
    ..so you can luv the car....luv the technology...luv all your environment ideas......but for now it is flat nuts to predict this going anywhere til they get prices much...much lower...
    And I bet they won't be able to in a timely fashion....
    8 Jun 2013, 04:55 PM Reply Like
  • Zeus,
    What you have to understand about the EVs is that over the course of their lifetime, while the upfront cost may be higher, the operating costs are substantially lower. Upgrade your AC recently? Thats a prime example of higher upfront costs and lower operating costs.

     

    In terms of overpriced... Well, the P85 is in par with other cars in that category for the same price. Would you rather go with a 100 K car and 30 k in gas OR 102 K car and 4 K in electrcity over the lifetime.

     

    In terms of CNG and LNG the infrastructure is insane. Almost everyone has a convenient access to electrcity, not everyone has access to CNG and LNG so stations would have to be set up, and then it becomes cost prohibative, the the DOT laws have to be rewriiten concerning compressed gas... Its just a rats nest you really dont want to look , and when you do, you realize how infeasible it is
    8 Jun 2013, 04:57 PM Reply Like
  • Continental Kid, Yes, you can convert any car to CNG but the merits are different because unlike electricity, CNG is not available to most homes, you have to buy a compressor. The compressor uses electricity and is extremely slow. Thus you need infrastructure which will cost 1 million per station. Then you factor in the much higher maintenance fees(even compared to gasoline cars).

     

    As far as Tesla goes, right, most people right now buying a Tesla have disposable income. But you underestimate how many people in the world have the income to afford 1 or 2 of them. Tesla has enough room to grow even with the Model S at the current price for years.

     

    Then come 2016-2017, they will have an average user car that will cost under 35k. When you factor in that most people do not buy cars outright and take out a loan. The monthly cost for a 35k EV when you factor in electricity cost and low/no maintenance. It ends up cheaper then an 25k gasoline car when you factor in gas cost and maintenance cost.

     

    The probability of Tesla being able to deliver in a timely fashion is extremely likely considering the trends of the past 20 years of battery technology.
    8 Jun 2013, 05:27 PM Reply Like
  • Dan,

     

    How many times do you have to replace the batteries over the course of the lifetime of the EV? Also for nat gas cars more than half the country could refuel at their homes, if the equipment was installed.
    8 Jun 2013, 06:29 PM Reply Like
  • Mike, it depends on the battery chemistry. The chemistry in the Model S should last 500k miles and 15-20 years which is more then the lifetime of most cars. (the 85kwh model comes with an 8 year unlimited mile warranty in comparison to most gasoline cars which come with 3-5 year or 35-60k miles warranty on the engine).

     

    As far as refueling in your home, yes and no. First of all, not all homes use NG but many do yes. 2nd of all, the residential compressors are so slow, you can charge an EV faster with a 110v then you would fill a car with CNG. To add to it the CNG residential compressor is not cheap and will uses up a lot of electricity just to compress the gas.
    8 Jun 2013, 06:37 PM Reply Like
  • Correct, a little more than have have natural gas, but almost all have electricty. It depends on the battery chemistry, how quickly you charge it, how quickly you discharge it, etc, etc.

     

    For example, if you use the tesla quick charging once a month and charge the rest of the time at home, the battery would not need to replaced duting the life of the car. Of course you can abuse anything and force it to fail pematurely, but it takes alot and you really have to try to make it fail, same goes with a regular car.

     

    For a CNG car, you would need a high pressure compressor,piping, and then what do you fo for the others that do not have CNG?
    With CNG you also assume that the input line is easily accesible, mine like many others is underground in a basement, and only used for the heater and water heater. It would be a PITA and very costly to run NG lines to the garage. Electricity, my breaker box is in the garage already.

     

    Then you run into the energy usage needed to run the CNG compressor which has to be factored into it, and as far as i know its still a compressed tank, that means every few years the car has to be services, the tank replaced or at least tested per DOT regs.
    8 Jun 2013, 07:18 PM Reply Like
  • Also, gas leaks can blow up. I wouldn't want my wife and kids connecting and disconnecting gas lines in my garage every day.

     

    In the 19th century, streetlamps were illuminated by gas. In the 20th century, they were switched to electricity. We're in the 21st century.
    8 Jun 2013, 07:46 PM Reply Like
  • SolarCity, the company that builds Tesla's Supercharger stations, installs solar panels on your home for no up-front cost. They lease the system to you for 20 years. You pay them monthly for electric usage at an amount that is substantially less than you had been paying your electric company/
    8 Jun 2013, 10:06 PM Reply Like
  • No, unless TSLA outsources production and also produces digital goods with virtually no marginal cost.

     

    You can't compare Digital goods and outsourced production (Apple has no factories left, they can ramp up very quickly in Asia using Foxconn, Pegatron and others) with TSLA.
    9 Jun 2013, 12:51 AM Reply Like
  • Web browsers were on phones long before the iPhone. Web browsers were on most brands of handsets when RIM and Palm had virtually to only popular smart phones. So no, there must have been another reason APPL grew so much.
    9 Jun 2013, 02:41 AM Reply Like
  • ".they tried selling the Volt at 40k and failed miserably."

     

    And they tried selling the Model S at 55 to 100 K. Resulting in such a backlog of orders at the higher end that the smallest battery, 55K model, is no longer offered.
    9 Jun 2013, 02:46 AM Reply Like
  • How often do you have to replace the engine or transmission on a conventional car over it's lifetime? Have those costs been dropping by an average of 8% a year, for the last 20 years the way battery costs have?
    9 Jun 2013, 02:51 AM Reply Like
  • Hardware is not a digital good.
    9 Jun 2013, 02:52 AM Reply Like
  • Have you ever charged a CNG tank...?...it's like charging a propane tank....a few minutes......TSLA on a Super Charger admits it will take 20 minutes minimum....please get your facts straight....
    ...and by the way I'll bet a large some of money that maintenance costs for a TSLA are less than a CNG engine......for example forklifts have used propane power for decades....don't seem to have many problems there
    9 Jun 2013, 07:42 AM Reply Like
  • What is the point of CNG? Save a few bucks to get a slower car with inconvenient fueling and participate in a process that pollutes about as much if not worse than burning coal - on the latter point anyone who tells you differently is hiding the NG production process.
    9 Jun 2013, 08:44 AM Reply Like
  • Solar City offers Free solar panels, Free installation, Free maintenance, a 100% parts and labor warranty and they guarantee your electric bill will cost less per month after the solar install vs being on the grid only.

     

    Musk's new finance program allows buyers to lease a Model S with a payment around $500/mth. That's affordable to most folks.

     

    NO GAS and carpool privileges "for one" is sweet! Top-off the battery overnight and start with a full charge everyday.

     

    To top it off, TSLA stock gains over the past few months have just paid off my $95K loan. Maybe now I'll get a Model X to go along with my Model S...
    9 Jun 2013, 08:53 AM Reply Like
  • It's not exactly like charging a propane tank. Propane is much easier to compress and make a liquid than natural gas. Making liquidfied natural gas at your home, well, that would require highly specialized cryogenic equipment, how many people have things in their home to take natural gas down to -260 F or -162 Celsius.

     

    If you want to quick fuel at your home using CNG, you would require a cryogenic unit (not cheap) or a monster compressor capable of large generating substantial pressures (BTW, you can't just go to home depot and pick up a generic compressor, is you do you may have a little explosion)

     

    Here's the cheapest one I've found
    http://bit.ly/ZYvC8w

     

    $500 and fueled overnight, actually EVs using a 220 V/40 fuel faster.

     

    Yes, forklifts use propane, but propane is not the same as CNG (which is mostly methane). Chemistry 101; methane CH4, propane C3H8.

     

    Also lots of industrial equipment have been using battery powered vehicles for decades also.
    9 Jun 2013, 09:01 AM Reply Like
  • The IPod absolutely drove AAPL stock, and the IPhone catapulted the stock to the Stratosphere!
    (get the fact sheets)
    9 Jun 2013, 09:03 AM Reply Like
  • Zeus -- I usually totally disagree with you but on this point you are correct. Apple's huge strength and one reason it was able to grow so astonishingly fast is that they made a 'luxury' product, or a product that everyone perceived as a luxury product, that a huge number of ordinary middle class folks could afford -- can't afford that ferrari? well, really, an iPhone is just as cool (and even a chick or stud magnet back when it first came out). Tesla cool helps get the people that count driving around in them which has immeasurable benefit, but it doesn't help get joe six-pack into plunking down 70k, no matter how much he might save in fuel down the road.

     

    Although oil has stabilized and other fuels are available, ICE's are just ridiculously complex pieces of equipment. Electrics are way simpler and ultimately way cheaper, assuming battery costs come down.

     

    And tesla has the tech and the engineers to keep improving every aspect. Don't see how ICE's can compete with them if battery costs declone. And seems at least a good shot that 'major' car companies won't react in time to keep tesla from capturing large share of EV market if EV's do begin to dominate.
    9 Jun 2013, 03:39 PM Reply Like
  • nwdiver -- overpriced compared to, say, a toyota camry which is all the car and more that anyone could ever need for transportation. As great as the Model S is and as bright the prospects for Tesla and EV's down the road, when I made enough to buy three from the increase in the stock price and went to drive one and check it out from a buyer's perspective I just could not stomach the idea of driving around in a 70k automobile while a billion people went to bed hungry every night. Just me. But it is an overpriced luxury toy for the rich. You buy your tesla stock and you make your money, but you better see what is on the end of your fork before you eat it.
    9 Jun 2013, 03:44 PM Reply Like
  • Ya, saving the planet from global warming is not worth $70k (minus tax credit and lower cost to operate...) How do you ever sleep at night.
    10 Jun 2013, 03:49 PM Reply Like
  • 2nd on Mister's point.

     

    Shorting TSLA might make you money if you're a very active trader and can time the swings. It's had some insane gains and losses over the past month and will probably continue to for awhile.

     

    However, shorts are playing with fire. Careful not to get burned. TSLA is a company led by a visionary who has a history of hitting his goals and the future looks very good.

     

    PS: June 20th's "live demo" by TSLA is going to be fun. If you don't know what that is all about, you should watch the TSLA shareholder meeting and fast forward to the Q&A at the end.
    8 Jun 2013, 09:46 AM Reply Like
  • No one can time the swings. If you could time the swings you would have all the money in the world in a month and capitalism would end.
    8 Jun 2013, 10:24 AM Reply Like
  • Jump to 40 minutes into it and watch for the next 5 minutes. Elon is basically giddy about the June 20 LIVE demonstration.

     

    It will make Barron's eat crow. And I will chuckle heartily.
    8 Jun 2013, 01:49 PM Reply Like
  • All I got from this article is some guy named Bill - who I don't know or care about - is skeptical of Elon Musk. G'luck Bill!
    8 Jun 2013, 09:54 AM Reply Like
  • I see negative articles written by authors who are now littered carcasses on wall street. It is quite amusing. Everyone wants $75 TSLA. And that's the problem about supply/demand kids. If everyone is licking their chops for it, it's never going to get back there!

     

    What people don't get about Elon is that he UNDERpromises and OVERdelivers.

     

    That alone makes people want to jump in buying stock long term with both feet. And the long termers are slowly, but surely, replacing the traders.
    8 Jun 2013, 02:00 PM Reply Like
  • As I have followed the Tesla/Musk story for several years now, I am amazed at the number of people who poorly prepare themselves when they want to write a piece about either Tesla or Musk. What amazes me is that they actually get paid for this drivel.
    8 Jun 2013, 10:01 AM Reply Like
  • Put his story next to the NY Times article.
    8 Jun 2013, 02:01 PM Reply Like
  • On February 21, 2013 Barron’s wrote a hit piece on TSLA stock titled “Unplug Tesla”
    TSLA closed that day at 35.16
    The next day it closed up 0.95 at 36.11

     

    On April 1, 2013 Barron’s wrote a hit piece on TSLA stock titled “Will Tesla Rally Go Flat?”
    TSLA closed that day at 43.93
    The next day it closed up 0.41 at 44.34

     

    On June 7, 2013 Barron’s wrote a hit piece on TSLA stock titled “Recharge Now!”
    TSLA closed that day at 102.04
    8 Jun 2013, 10:14 PM Reply Like
  • orthophonist, can't agree more. Here are just a couple of inaccuracies from the Barron's writeup.

     

    "Musk has astutely met that concern with a financing option guaranteeing resale value, but that just shifts the risk to shareholders."

     

    - Musk will guarantee that resale value with his own money (http://usat.ly/16RW3n9)

     

    "Tesla survived with a $465 million loan from the U.S. Department of Energy, investments by Daimler (DAI.Germany) and Toyota (7203.Japan)"

     

    - Tesla was not the only company to get a loan from the $25B ATVM program. It got a smaller share as compared to a lot of other companies and is the first to have paid back - 9 years early. (http://ti.me/13NeP9v)

     

    Otherwise, the article seems to say nice things about the car. But I think their closing argument misses the point about Tesla:

     

    "The mass-market segment will be crowded by the time Tesla plans to deliver Gen III. Chevy just introduced GM's first all-electric car, the Spark EV, at $20,000 (after the $7,500 tax credit)."

     

    There are other EV's on the market, yes, but none of them are very desirable. None of them come from a company that won multiple car of the year awards (car of the year, not EV of the year) on their 2nd gen vehicle.

     

    Also, it's not that easy for someone else to make a compelling EV and be profitable at it. Just look at all the recent failures.
    8 Jun 2013, 10:17 AM Reply Like
  • Its pretty obvious that the journalists who write such stories have no concept of emerging technologies or the battery chemistry Tesla is using.
    We all know technology starts out expensive, but decreases as economies of scale take over.
    We also know that the chemistry Teslais using is cutting edge, so you would expect a price drop in terms of battery costs. Think computers, buy a top of the line alienware now, 3 years later tech inproves that make it average.

     

    Furthermore Tesla has an out with the batteries even if the price of the NCA does not drop; use LMO or NMC. LMO would cost roughly half and add a 10-15% weight gain.

     

    Consider that the Tesla Model S is almost matching Leaf sales and the MS costs twice as much. That is insanely hard to grasp for people if they don't comprehend that the Model S is such a great car.
    8 Jun 2013, 10:20 AM Reply Like
  • Model S is greatly outselling the Leaf while costing 3x as much.
    8 Jun 2013, 12:48 PM Reply Like
  • That's true if you consider some months, but on average nissan may beat tesla sales this year

     

    http://bit.ly/18W8Br3

     

    It is VERY important as you said that the Model S is much more expensive than the Leaf, and judging by other comparitors, Tesla should be selling much less or Nissan should be selling much more.

     

    Nissan may average ~22000 sales this year
    Tesla will sell ~ 21000 this year.

     

    If nothing else that speaks volumes of the desireabilty of the Tesla vs other EVs. Nothing against the Leaf and Nissan, but they bucked the well establish economic rule. Tesla followed the rule and its paying off for them.
    8 Jun 2013, 02:31 PM Reply Like
  • leaf very nice local car. draw circle radius 75-100 miles around where you reside. thats your area. Tesla, draw radius 200-300 miles
    9 Jun 2013, 09:26 AM Reply Like
  • If I had the opportunity to hang up on someone from Barron's, I would.
    8 Jun 2013, 10:24 AM Reply Like
  • I think you guys are missing the whole point of the Barron's cover story. It's quite simple... The company Tesla is... wonderful. But the current stock price/valuation of $TSLA is... ridiculous!
    8 Jun 2013, 10:26 AM Reply Like
  • @borncubnug

     

    How many cars does Tesla need to sell to be appropriately valued?
    8 Jun 2013, 10:34 AM Reply Like
  • Right on, broncubnug.

     

    The type of responses that we are seeing in these posts are similar to what we saw in the past on negative articles related to AAPL and gold - lots of man-crush and bro-mance with Musk among these fanboys.
    8 Jun 2013, 11:56 AM Reply Like
  • Let's say it is "ridiculously valued"....at some point it will stop soaring higher and trade in a range imo. There is no reason why it can not sit in a range until more "fundamentals" emerge to justify its price.

     

    That said, I think this June 20 announcement is going to be gamechanger technology that makes Tesla far more than a car company...
    8 Jun 2013, 02:12 PM Reply Like
  • But no answer to how many it needs to sell ZEUS?
    8 Jun 2013, 02:23 PM Reply Like
  • Finally someone states the most important issue....
    A lot of people will get blind sided at some point...
    17 Jul 2013, 09:02 PM Reply Like
  • The real edge Tesla has is that it is a silicon valley high tech company with world class engineers and one of the great business leaders of our time competing against old, badly run, so called majors who haven't had a good idea since Henry Ford invented the assembly line.
    8 Jun 2013, 10:26 AM Reply Like
  • Even Henry Ford took decades to be convinced that they needed to build something other than the Model T. He was an innovator in his youth, perhaps, but dug in his heels after that, one of the most stubborn people I'm sure.
    8 Jun 2013, 10:50 AM Reply Like
  • Glenn, what you and so many others here are doing is showing emotional bias against successful companies. Ad hominem attacks are low blows in political debates and have absolutely no place in valuating stock prices. If you honestly want to believe your disrespect for successful auto companies, go ahead. People like you fuel the emotional frenzy of buying into Tesla that help make this stock so overvalued. It's like FSLR at 200 on the way up to 300. Sure there's room to squeeze out a fast profit, but there will be future long term buying opportunities at 1/5th the current price.
    8 Jun 2013, 08:43 PM Reply Like
  • King -- Did you ever hear of HP or Dell or Sony or Nokia or Rimm -- successful companies all. But when the tech changed out from under them they could not compete. Even mighty microsoft could not compete. The auto companies are nowhere near as well run, tech savvy or profitable as those tech titans of the nineties and early aughts -- they have little chance of competing with a new tech titan, assuming that is what tesla becomes. Emotional? I don't think so. Logical and objective, looking at long term trends in technology which is what I do. I also was once a primo engineer and I understand the psychology. Very, very few world class engineers want to work for bureaucratic old companies with entrenched ideas about how to do things that are immensely difficult to change.

     

    Tesla attracts the brightest of the bright simply because it is where the action is at the moment. And the brightest of the bright -- that very, very small number of folks capable of building stuff no one else has ever built -- are the folks that drive things forward.

     

    Perhaps tesla is a flash in the pan and Elon Musk simply a brilliant showman with no substance -- or perhaps the tech will turn in a direction away from EV's -- super cheap oil or one of the other cleaner energy fuel sources or something on no ones radar. Or perhaps one of the better run old auto companies like Toyota or BMW will come out with a cheaper EV that Tesla can't compete with. But I like Tesla's chances. And the upside is so huge that even if Tesla's chances were only 1/5, it would be worth the investment.

     

    Understanding (or at least having some vague glimmer) of how the future of technology will unfold is a key to making money in the market. No one can predict the short term. Most non-tech companies are fairly priced or close enough that you can have no real edge. It is the tech companies -- especially the newer ones -- that give the everyday investor -- if that investor has a good understanding of how things might unfold -- a real shot of Alpha. Or at least that is how it looks from here.
    9 Jun 2013, 08:00 PM Reply Like
  • Once again I just don't understand the overvalued argument. Just because something went up "too fast" for your liking doesn't make it overvalued. 12 billion with a run rate of 2.2 billion in sales... Ahh well ok . What will sales be they sell 100,000 cars a year? 200,000 cars oer year? 500,000 cars per year. None of these short articles really debate that key point. If you had a solid short argument that says they will only sell 20,000 cars next ear, I'm all ears. No one is saying that. They just look at the market cap and take a stand still photo shot of a company and compare it to established metrics - ridiculous for this type of company.
    8 Jun 2013, 10:34 AM Reply Like
  • @ a Net profit margin of 4% so they say.....Do the math....and that 2 billion hasn't been realized yet for this fiscal calendar
    17 Jul 2013, 09:02 PM Reply Like
  • Guys,
    Don't bet against a winning team!
    It's not overvalued if you look at the future. China? not to mention India.
    Try thinking out of the box. It can make you rich if that's what floats your boat.

     

    I get more fun watching the big 3 choke!
    8 Jun 2013, 11:02 AM Reply Like
  • Norway demand alone can float TESLA for years. There's a 100% tax on gas/diesel cars there. A $30K car costs a Norweigan $60K, now add $10/gallon for fuel.

     

    There is ZERO tax on EV's in Norway.
    8 Jun 2013, 02:14 PM Reply Like
  • ... and other mfrs already producing EVs for less than half the cheapest Tesla. I have a Norwegian friend who makes what would be $80k/year but he could hardly afford a $35000 EV so he lives carless. Maybe the Gen III can become popular in 3 years but the Model S stands no chance.
    8 Jun 2013, 08:59 PM Reply Like
  • Another thing the article misses is Tesla Model S resales - in three years Tesla will buy back many of the now produced S's for 50% of original cost - most people will baby their S's and Tesla will refurb them, possibly with improved battery packs, then resell them at a more affordable $50-60,000, which will open up a whole new market - if they are the 85's, even without battery upgrades the car will still have 5 year unlimited mileage battery warranty - a great opportunity for a second tier of buyers to jump in - talk about strategy - wow!!!
    8 Jun 2013, 11:12 AM Reply Like
  • Exactly. The demand for used Teslas will be huge, as they are much less likely to require expensive maintenance. With a new or refurbished battery at the 10-12 year mark, the car will last another 15 years with minimal upkeep. One of Gen3's biggest competitors will be used Model S.
    9 Jun 2013, 08:50 AM Reply Like
  • The pretzel logic leaps people are willing to make just to justify this wildly over-priced company amazes me.

     

    More please: how long before you think SpaceX puts Lockheed Martin, and Boeing out of business?
    9 Jun 2013, 08:53 AM Reply Like
  • First $LINE, now $TSLA, its like Barron's knows how to get people on SA the most angry haha. For real though, don't love your stocks.
    8 Jun 2013, 11:31 AM Reply Like
  • That article has a horrible understanding of technology. What he fails to realize is that the 30% improvement is across the board. Which means 30% more capacity, 30% cheaper. That stacks multiplicative.

     

    So lets say the battery costs 30k and has 300 miles. That means a 400 mile battery would cost 21k at the time. And that would mean that a 200 mile battery would cost around 10.5k.

     

    So that leaves them with 24.5k for the actual car. Considering smaller margins and improvement in production and bulk discounts. Tesla can easily hit the target.
    8 Jun 2013, 12:23 PM Reply Like
  • I think that some people are just looking for an excuse to find fault with Tesla, or Mr. Musk, in order to throw some dirt or run down Tesla ... they are simply not looking for the truth, just something to write on the negative side. Sounds like this is what happened.
    8 Jun 2013, 12:41 PM Reply Like
  • My thought exactly. Most of this people goes to lenghty articles negatively trying to convince people to step away from TSLA. Sounds like desperation to me.
    9 Jun 2013, 02:51 PM Reply Like
  • I do not see what all the fuss is about, this is just another example of some big hedge fund or someone big that needs the stock to go down.
    you cannot put a price valuation in line with other auto makers on a stock that is poised to reduce our dependence on oil and lead us to a path for cleaner sustainable energy plan.
    http://bit.ly/116V4aQ
    http://bit.ly/10YwE6Z
    8 Jun 2013, 12:46 PM Reply Like
  • That's exactly the problem Joe. The purpose of Barron's articles is to assign a value, in the most readable and controversial way, to stimulate page views. So whose value would you side with?
    9 Jun 2013, 03:06 AM Reply Like
  • In 2009 China bought more cars than the United States. In 2012 China bought more cars than the European Union. Ignore the 800 gorilla in the room at your peril. When one billion Chinese have cars the price of oil will rise exponentially.
    Tesla Motors is the epitome of American ingenuity. The efficiencies of their factory production models are like Henry Ford's assembly line on steroids. This creativeness and good old fashion ingenuity permeates every aspect the company. Conception, design, marketing, production, and brand are synthesized with beliefs and tenets which will attract investors worldwide.
    Short Tesla and you will miss the opportunity of a lifetime.
    8 Jun 2013, 01:42 PM Reply Like
  • I look at it this way. The stock fell from 115 to 88. At 88, no news. Good or bad.And it bounced off its daily low that day...with conviction. TSLA followed a bad overall stock market for that day

     

    Then it shrugged off the next bad stock market day and closed green. And then it climbed again on a good market day.

     

    All I see here is that people aren't selling much stock and everyone is guessing where the "dip" or "bottom" is. Well you just saw it leave. And now you have a June 20 live demonstration on the way. Is anyone really thinking..."well GEE, maybe I should sell my stock before finding out how to charge up my Tesla Model S in 5 minutes or less?"

     

    I hope not!....lol
    8 Jun 2013, 02:19 PM Reply Like
  • If you believe Barron's Bill Alpert, let me know in a reply.

     

    If you believe Tesla's Elon Musk, let me know in a reply.

     

    Obviously, one of them was crying bullshit.
    9 Jun 2013, 12:45 AM Reply Like
  • Can anyone add a link with predictions from either CEO Musk or other TSLA execs regarding future battery prices, car range predictions ?

     

    Maybe it was the tone of the conversation and previous Barron's coverage that ticked Musk off, but I fail to see why the question itself is an issue?

     

    It's a valid concern or question, battery costs are probably the single reason why there is no EV mass adoption yet.

     

    I guess most of us (short or long TSLA) agree that battery prices will come down further, but the timeframe and exact % is hard to predict, no?

     

    So again, thanks for posting links what battery prices and range in EVs will be at in 5-10 years...what does "considerable" mean?

     

    PS: Battery breakthroughs in labs and experiments do NOT equal safe daily use and cheap mass production for EV cars...
    9 Jun 2013, 12:56 AM Reply Like
  • there are battery folks who -->5+ years ago<-- were in labs and experiments. look for Dr Amy Prieto of UColo. who won FLC technology award for her carbon nanotube batteries. it was announced a few years ago she had VC money. i seriously expect there are many others
    9 Jun 2013, 10:31 AM Reply Like
  • That's exactly my point. There have been many promising battery news but none are in a mass-produced electric car yet.

     

    Prieto is also listed here...

     

    "13 battery startups to watch in 2013"

     

    http://bit.ly/W3GDSf

     

    How come all the disruptive battery PR we have been hearing about for years isn't in an mass-produced EV yet?

     

    My take is this will take longer than anticipitated. Battery technology development timeframes are hard to predict.
    9 Jun 2013, 11:47 AM Reply Like
  • @tftf, thanks for battery article link.
    9 Jun 2013, 06:46 PM Reply Like
  • The disruptive battery tech you have been hearing about for years is in the Tesla Model S. Really. It isn't chemistry, but some kind of mechanical engineering genius that enabled them to build a power train out of cell phone batteries that produces 400+ hp at the touch of the pedal and goes 250 or so miles between charges.

     

    If something better than present cell phone batteries comes along -- and I certainly wouldn't want to bet that it won't -- you better believe that the wizzy engineers at tesla will figure out exactly what to do with it in a way that no one else can manage.
    9 Jun 2013, 08:05 PM Reply Like
  • @tftf. i think you should consider a linear graph vs a log graph and real world examples. if an organism doubles every day (algae) and it takes 30 days to fill a pond, the pond is half full in 29 days. Or if you drain lake michigan in 1940 and put a teaspoon of water in and each year double the amount, a faint sheen would be there a few years ago, and it would be refilled today (analogous to computers). exponential growth sneaks up on the unwary.
    10 Jun 2013, 09:07 AM Reply Like
  • @tftf -

     

    Future car ranges: (Look for SamoSam's transcript of Detroit Bureau interview)
    http://bit.ly/18Xdno3

     

    Price of 35k (13:00 - 13:30 into the video)
    http://bit.ly/19U7ObC

     

    The price per kwh he says under 200$ in not to distant future to JP Morgan:
    http://aol.it/X7ZIZC

     

    I wish I could find a more accurate response to the last one but don't have the time as its time consuming going through 2nd hand sources. I tried to include direct quotes the best I could.
    9 Jun 2013, 03:30 AM Reply Like
  • @weaponzero, thank you.

     

    PS: I had also posted announcements of batteries between 400Wh/kg and up to 500Wh/kg (as well as good cycle times and passed safety tests), for example...

     

    http://bit.ly/zL6nrh

     

    However, these are all lab tests or prototypes. I think it's very hard to predict for outsiders (investors) when such technology will be in a mass-produced car.

     

    I'm not convinced yet because so many deadlines were missed in the past...batter technology is very tricky...this could be 10 years away instead of 5 for all I know..
    9 Jun 2013, 04:40 AM Reply Like
  • @tftf -

     

    Well we can tell based on previous trends.

     

    If your interested in what is the best that can be done now. Tesla for example uses 3.1ah panasonic batteries. Panasonic has already released 3.4ah batteries in 2012. That means as-is a Model S with 10% longer range is possible. Panasonic promised to release 4.0ah version of the batteries this year, this means a 30% longer range model s would become possible.

     

    So that is the current possibility with current cells.

     

    One thing I would like you to keep in mind is the difference between cells and batteries. Effectively, there are more then cells that go into batteries which add weight to the battery. If we can cut down the materials used in the battery, even without having denser lithium cells, we can have more range and cheaper cost.
    9 Jun 2013, 05:05 AM Reply Like
  • @Weaponzero, thank you.

     

    Assuming TSLA can indeed manufacture a Gen III car with a range above 200 miles for about 30-35k USD base pricing that could be the tipping point.

     

    I agree that as long as TSLA stays with Panasonic (or another major brand) the risks are mainly on the cost side, not the general availability or mft capability. Panasonic certainly has big ambitions, article quote from 2010:

     

    "By 2015, Panasonic aims to capture 40 percent of the global market for lithium-ion batteries (in automotive and other applications), up from 10 percent today, said Fannon. When it comes to green cars, Tesla is the ultimate poster child of high performance. As a result, said Fannon, working together offers both companies an “opportunity to demonstrate the real value of EV modules that we create together.” Down the road, he said, Tesla and Panasonic plan to jointly market battery packs and modules to other electric car makers."

     

    I guess we will know in about 5 years (I'm adding an extra year because Model X was also postponed, just to be in the safe side of TSLA roadmap).

     

    PS: Again, the best thing would be some real competition from GM/Envia..

     

    http://bit.ly/18Xvz13

     

    to drive battery tech forward and prices down.
    9 Jun 2013, 07:07 AM Reply Like
  • @tftf - the only issue with the envia batteries is their lifespan is shorter and their power output is less.

     

    That said I found something really awesome:

     

    http://bit.ly/111ifa5

     

    over 10,000 cycles lifespan at 2C
    1,100 W/kg
    uses same 18650 format Tesla uses
    uses same NCA chemistry Tesla uses

     

    Can you say 1000 mile Tesla Model S that can recharge 500 miles in 15 minutes and 166 miles in 5 minutes.
    9 Jun 2013, 11:56 AM Reply Like
  • @weapon - did you get the Wh/Kg figure?
    9 Jun 2013, 01:19 PM Reply Like
  • @Julian - nvm, I read it from a different source then linked to the source article(which I skimmed through). The source I read it from did not mention that it is power density, not energy density.

     

    So while this may not make a 1000 mile battery, it may create super fast charging of current cells. It mentions the other values (energy density my guess) is comparable to others.

     

    I found the original pdf as well:
    http://bit.ly/16UHYp1

     

    sorry for the false alarm. I usually double check things before I post but got careless. Still I think this is major progress considering that they are using existing battery chemistry.
    9 Jun 2013, 02:12 PM Reply Like
  • Who cares about batteries and p/e ratios yada yada. They are issuing a ton of stock right now and when they are done doing this the stock will go much higher from here.

     

    This stock has the sizzle and a CEO who cares and is buying the stock also.

     

    Would not want to be short this stock
    9 Jun 2013, 07:53 AM Reply Like
  • Barrons claims downside is now $50(a nice boost from zero). Upside still virtually unlimited. Can someone explain how that makes this a good short here?
    9 Jun 2013, 09:00 AM Reply Like
  • Monday will be down day tsla..
    9 Jun 2013, 09:11 AM Reply Like
  • The article made one point: that battery technology MAY not advance enough for Tesla to come out with a cheaper car. Other than that, the article just reinforces the great news behind the Tesla boom and how promising their future can be. "Elon Musk is NOT someone you want to bet against", as quoted in the article.

     

    Musk has outdone NASA, and this guy Alpert thinks he understands the industry....thats why the interview was cut short.
    9 Jun 2013, 09:11 AM Reply Like
  • "battery technology MAY not advance enough for Tesla to come out with a cheaper car"

     

    MAY is the key word, two numbers show how by much battery tech has to advance:

     

    - The ASP of a new car in the US is around 28k USD

     

    - Model S battery pack alone is about 30k USD today

     

    The costs have to come considerably within 5 years for Gen III cars to be possible.

     

    I don't know if this is possible and I doubt most TSLA investors have the physics or chemistry background to assess this.

     

    So it's believing in TSLA's and their battery partner roadmap and timeframes for Gen III...nothing wrong with that, but nothing wrong with Barron asking critical questions either imho.
    9 Jun 2013, 11:55 AM Reply Like
  • I still feel this guy is determined, and is on a mission to make this a huge success. I like his style, and the expectations that he maintains when it comes to the quality of his product. Good quality is very rare in this world we live in today, it seems that Tesla is one of the few exceptions to this reality.

     

    He seems to be making all the right decisions, I guess he wouldn't be where he is today by being bad at it.

     

    I am staying in; I believe Elon is giving this every opportunity to be something amazing, and I cant even begin to see what could stand in his way.

     

    Tesla could be a game changer, and could be part of History class many years from now.
    9 Jun 2013, 09:13 AM Reply Like
  • Over the coming months, as the Tesla Supercharger Network is expanded, Model S owners will drive their cars more and more. Fast-Charging has a profound affect upon EV drivers, even first adopters.
    With an ever increasing number of Model S owners, experiencing less and less range anxiety, Model S sightings will go through the roof.
    Tesla Model S owners empowered to drive, will become an incredible sales force.
    My advice, buy January 2014 Calls.
    9 Jun 2013, 02:40 PM Reply Like
  • Why does anyone give a hoot about the gripes of a journalist that got his underwear in a knot because he failed to earn the respect of an interviewee? Down day for Barrons on Monday, Tesla - this is nothing to do with Tesla.
    9 Jun 2013, 03:02 PM Reply Like
  • Given that more than half of the cost of gasoline is actually taxes (ostensibly for road maintenance) does anyone fear that the economics based on gas savings will quickly disappear (along with their advertising value)? Stories like this one is why I ask http://fxn.ws/119ynmq
    9 Jun 2013, 08:24 PM Reply Like
  • @User 7856191 - First of all, even without taxes on gasoline. Electricity is still a lot cheaper. As far as taxes go, I would really like to know how it would be possible to tax EVs. Tracking by mile is impossible and putting annual fees is just going to end up losing the state other taxes as people register in a different state.
    9 Jun 2013, 08:59 PM Reply Like
  • Tracking mileage is not difficult as its stored in the CPU along with a whole lot of other driving data. If you've ever noted Progressive's commercial for their "snapshot" product it looks like a simple OBD port data gatherer and is likely a glimpse into future driving for all of us- wouldn't take much to have that data transmitted automatically.

     

    And several states are already considering moving to a mileage based tax. EVs will not be exempt.
    9 Jun 2013, 09:09 PM Reply Like
  • bwmaki, first of all. How are they going to access that data again? Port or not, they can't force you to make the data available for them. As far as sending the data automatically is not going to happen. The supreme court already ruled that government remote tracking without a warrant is unconstitutional.
    10 Jun 2013, 10:02 AM Reply Like
  • Tesla now has a market cap of 11 Billion, and it is projecting a total global sales of 30,000 units in 2014.

     

    Ford has a market cap of 61 Billion. In 2012 it sold 2,250,165 cars and trucks, and sales continue to increase at a rapid pace. The new Ford Focus has won numerous awards, including Motortrend "Car of the Year." The F-150 Pickup is a top-selling car with high margins, and if the housing sector continues to pick up, sales of the F-150 will trend along with it.

     

    In other words, a company that is projected to sell approximately 2.5 million cars next year, with a PE ration of 10, has a market cap that is only 5.5 larger than a company that is projected to sell 40,000 cars next year. I have nothing against Tesla--I think they are very cool cars--but the stock price assumes an absolute explosion of high-margin sales over the next few years, with no competition from other car companies. While I respect Mr. Musk, he is not alone in his understanding of batteries and electric motors. Nissan, Toyota, Honda, Porsche, Audi, Mercedes, Ford, and even General Motors also have excellent engineers.
    9 Jun 2013, 08:25 PM Reply Like
  • A very good summary. Unless TSLA had unique patents (they do have some powertrain patents related to EVs) or, say, bought a battery company with unique battery patents I doubt the lead TSLA currently enjoys is sustainable.

     

    I think TSLA bulls understimate the large car companies' ability to create competitive EVs (that don't look like golf carts) once the mass market demand takes off in the next years.

     

    I see the pending introduction of the BMW i line and new Renault-Nissan EVs as a sign this is happening and think TSLA will have lots of competition within 5-10 years.

     

    Big Car companies may be (too) conservative, but their engineers are not stupid once the green light is given for more EV development.

     

    Summary: I think unit margins will shrink for TSLA or be a the lower end of their projections. TSLA Gen III may also face unexpected new competition.
    9 Jun 2013, 08:39 PM Reply Like
  • perhaps, but at the IEEE confernce on EV's a few years back in DC before GM bankrupt (stock was around $20) one of the bean counters said if they could not do at least a million units they would not even consider a vehicle. my point is the big companies are lumbering behemoths with few visionaries. (remember "luggable" portable computers in the mid 1980's?) vs what you have today.
    10 Jun 2013, 09:17 AM Reply Like
  • I think this Barron's writer is barking at the wrong tree. If is only battery price I'm sure there lots of car companies who will manufacture this kind of car. But I suspect there is more to Tesla than batteries. I read that Tesla have a "secret sauce" that make all the difference. in the world.
    9 Jun 2013, 11:31 PM Reply Like
  • maybe IT'S TIME to PUT "that OLD BOY DRIVEL PROPAGANDA RAG BARRONS" OUT TO PASTURE...TOO

     

    jerks LOST ME 40k once ...when I parked 40k in my daytrading money in their TOP TEN PICK: ZIPL

     

    f'n company went bankrupt...came back from a two-week vacation...and my 40,000 was WORTH about .04 cents...

     

    THANKS TO "BARRONS" GREAT INSIGHT!!!
    10 Jun 2013, 09:35 AM Reply Like
  • I see so many myths and cliche in the comments. I've written an article to repudiate these myths:

     

    Truth Or Myth: Most People Still Don't Get Tesla

     

    Here is the main arguments. Go check it out and cast your verdict!

     

    http://bit.ly/11aLljU

     

    Truth or Myth #1: A Tesla is a gorgeous, high-tech, sexy, rich person's toy purchased mainly to impress one's friends.

     

    Truth or Myth #2: Spending $50K+ on a BMW, Audi, Mercedes, Lexus, Jaguar, Aston Martin or Maserati makes you look foolish, or worse, irresponsible.

     

    Truth or Myth #3: The true cost of the Model S is lower than that of a $50K BMW, Audi, Mercedes, Lexus or Jaguar.

     

    Truth or Myth #4: Range anxiety

     

    Truth or Myth #5: The EV is unproven technology; the battery will degrade significantly after a maximum of 1,000 charges.

     

    Truth or Myth #6: Tesla makes expensive electric vehicles affordable only to the wealthiest 1%, while EVs account for less than 1% of car sales. The $11 billion market cap is a bubble.

     

    Truth or Myth #7: Tesla's 21,000 car sales target for this year is doubtful. The 25% gross margin is untenable without ZEV credit revenue.

     

    Truth or Myth #8: The big automakers, Toyota, GM and Ford, will launch their own EV products and crush Tesla. Tesla has no intellectual property or competitive advantage that will enable it to stay ahead.

     

    Truth or Myth #9: Tesla is the next Apple (AAPL); Elon Musk is the next Steve Jobs.

     

    Truth or Myth #10: Forget about Great America; just take your kids for a Tesla drive.

     

    Truth or Myth #11: Gallons of light

     

    Conclusion
    10 Jun 2013, 10:31 AM Reply Like
  • Anyone who doubts Tesla's veracity should watch the National Geographic mega factory segment on Tesla -
    http://bit.ly/13AWkWM
    This is not the future, this is already history -
    12 Jun 2013, 10:39 AM Reply Like
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