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Print 31 comment(s) - last by Cypherdude1.. on Jul 9 at 5:50 PM


Tesla Roadster, version 2.5  (Source: Tesla Motors)

Tesla Model S Prototype  (Source: Tesla Motors)
Losses are significant, even considering the downward-trending market

It's been a wild ride for Tesla Motor company enthusiasts.  After months of eager anticipation, the company became the first automotive public offering since Ford in 1956, and dumped 15.3 million shares onto the market aggressively priced at $17 (2 million of these shares were sold late, via an over-allotment option).  

That high price turned out to be an early victory for investors, who saw share prices spike up to a peak of 30.42 last Wednesday -- a gain of 78.8 percent.  However, those gains have since been erased as TSLA has taken a sharp plunge on the stock market.  The stock now sits at 15.50 (at press time), well below its IPO price.

The stock market as a whole has been struggling over the last week, with the DOW Jones Industrial Average dropping last week into the 9000s after poor job reports.  For an unproven company like Tesla that particularly spelled trouble.  

Josef Schuster, the Chicago-based founder of IPOX Capital Management LLC and manager of the Direxion Long/Short Global IPO Fund comments, "The company is a great concept with relatively weak fundamentals.  Markets are weak and in a weak market right now this is hurting the company even more."

Despite having one of the first true electric vehicles on the U.S. market -- the Tesla Roadster, recently update to "Version 2.5" -- and several upcoming vehicles, investors are finally falling out of love with the company and taking a hard look at its financials.  Tesla lost $29.5M USD in Q1 2010 -- almost double what it lost in that quarter last year, and over half of what it lost 
overall last year ($55.7M USD).

Electric vehicles have received a firm monetary and public commitment from U.S. President Barack Obama.  Tesla faces tough competition in the near future, from entry-level competitors like GM's 2011 Chevy Volt and Nissan's 2011 Leaf EV.

However, it'd be premature to write off Tesla entirely.  Its Model S entry-level luxury EV looks promising, if it can keep costs contained.  It also has a key new contract with Toyota to help the Japanese automaker develop electric vehicles.



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Heh
By acase on 7/7/2010 10:39:41 AM , Rating: 5
I guess that would be called a Tesla Recoil.




RE: Heh
By JasonMick (blog) on 7/7/2010 10:59:57 AM , Rating: 2
Check the new title! ;)


RE: Heh
By Hieyeck on 7/7/2010 12:48:21 PM , Rating: 4
6 the man if you're gonna use it :)


RE: Heh
By hyvonen on 7/7/2010 1:19:40 PM , Rating: 3
Yeah!

6 6 6


RE: Heh
By Cypherdude1 on 7/9/2010 5:50:44 PM , Rating: 2
quote:
Despite having one of the first true electric vehicles on the U.S. market -- the Tesla Roadster, recently update to "Version 2.5" -- and several upcoming vehicles,
At first I thought electric/hybrid cars were the answer to lowering our dependence on foreign oil. However, after looking at the range and cost of these cars, I think a better answer would be to produce higher mileage gas or diesel cars . I have read that diesel cars have the biggest potential for high mileage ratings. Perhaps what the USA should do is make diesel pumps more available across the country so that it is more convenient for diesel owners. I have read that the highest mileage diesel cars are capable of achieving up to 70 MPG and potentially even higher. If everyone in the USA drove a car which had this much fuel economy, we could end our dependence on foreign oil for years.

Certainly, we would also need to simultaneously increase our vigilance and safety inspections and restart drilling off our coasts and in Alaska. Unfortunately, because of the corruption which occurred in the USA federal government agency which is tasked conduct safety inspections on all oil rigs, the Minerals Management Service , now there is no longer any new drilling:
" Gifts, gratuities and the revolving door

In September 2008, reports by the Inspector General of the Interior Department, Earl E. Devaney, were released that implicated over a dozen officials of the MMS of unethical and criminal conduct in the performance of their duties. The investigation found MMS employees had taken drugs and had sex with energy company representatives. MMS staff had also accepted gifts and free holidays amid "a culture of ethical failure", according to the investigation. The New York Times's summary states the investigation revealed "a dysfunctional organization that has been riddled with conflicts of interest, unprofessional behavior and a free-for-all atmosphere for much of the Bush administration’s watch.""
http://en.wikipedia.org/wiki/Minerals_Management_S...

Moreover, many coastal states are rushing to stop all new drilling. New Jersey and California have already done so and Florida is writing a constitutional amendment to be voted on this fall. Because of the greed of BP and corruption in the MMS, our ability to reduce our dependence on foreign has been greatly diminished.


RE: Heh
By acase on 7/7/2010 1:25:54 PM , Rating: 3
Nice. I will be awaiting my check in the mail.


RE: Heh
By Lazarus Dark on 7/7/2010 7:03:17 PM , Rating: 5
No, seriously, give the man a 6 if your using his title.


RE: Heh
By Phoque on 7/7/2010 6:02:28 PM , Rating: 2
Could it be the right time to buy shares then?


Pump n' Dump
By guacamojo on 7/7/2010 11:20:17 AM , Rating: 5
No surprise here. The initial surge was largely driven by speculators pumping up the stock. Then when the getting was good, they dumped it.

The company got what it wanted (a bunch of cash.) The speculators who got out got what they wanted. (Right, "therealnickdanger"?) The IPO agent got his fees, the brokers got theirs.

The only losers here were the sheeple who really thought TSLA was a good investment at $30.

Part of me says it's only fair for people to get taken like that. The other part of me wonders if there shouldn't be minimum holding times on stocks to prevent the good ol' pump n' dump.

Of course, it's pretty much the same thing as concert or sports tickets getting bought up by speculators and resold for big bucks. What's the difference?




RE: Pump n' Dump
By IcePickFreak on 7/7/2010 1:25:47 PM , Rating: 2
No doubt. In the DT article last week about the IPO I pretty much called this out, but I gave it a year. I thought they'd play along longer that a week lol.


RE: Pump n' Dump
By JediJeb on 7/7/2010 2:03:42 PM , Rating: 4
I think the term "investor" should be replaced with the term "gambler". When you invest in something you are trying to make an improvement in what you are investing in which will pay you back in the end, usually over a long period of time. Taking money, throwing it on the table and hoping the right number comes up to make it into more money, that is gambling.


RE: Pump n' Dump
By smilingcrow on 7/7/2010 6:56:02 PM , Rating: 2
"Of course, it's pretty much the same thing as concert or sports tickets getting bought up by speculators and resold for big bucks. What's the difference?"

The first part of your analysis seemed spot on but the comparison with touting seems very ill founded.
People buy from touts because an event was sold out and they want to go to that event. They aren’t buying the tickets as a potential investment; it’s a very different dynamic.


electric cars == stupid
By muhahaaha on 7/7/2010 3:54:26 PM , Rating: 2
I constantly get down rated for saying that EV technology is going to be epic fail. This time probably won't be any different.

And the majority of our electricity is generated with... drum roll please... fossil fuels. Green, my 455.

Today's battery tech is not up to the job anyway. Maybe someday, but not today.




RE: electric cars == stupid
By guacamojo on 7/7/2010 5:12:10 PM , Rating: 2
quote:
And the majority of our electricity is generated with... drum roll please... fossil fuels.

Electrification of any significant portion of the vehicle fleet would result in huge new demand for electricity.

As a result, a very large amount of generation would have to be added to support EV's. (the same is true for hydrogen cars) The new capacity can be greener (solar), less-green (fossil), or anything in between (nuclear). The current mix isn't really significant to the long-term requirements.

Also note, fixed installation fossil-fueled generators can scrub emissions, sequester CO2, etc. which makes them somewhat greener than a fleet of gas-burning cars.


RE: electric cars == stupid
By ThomasDM on 7/8/2010 9:05:22 AM , Rating: 2
quote:
And the majority of our electricity is generated with... drum roll please... fossil fuels. Green, my 455.

That's true in most countries, but even if fossil fuels are used to generate the electricity it's beneficial because the well-to-wheel efficiency of electric cars is much higher.


facts
By Ammohunt on 7/7/2010 2:25:17 PM , Rating: 3
Edsel, DeLorean then Tesla wait and see. Warm fuzzies that you are driving an eletric car is not enough to keep a company afloat. Building their manufacturing plant in California was their first mistake.




RE: facts
By muhahaaha on 7/8/2010 4:54:24 AM , Rating: 2
Just sign Steve Jobs up as Tesla Motor's spokesperson. Then their magical cars will be a fly away sucksess.


so basically?
By smackababy on 7/7/2010 11:04:46 AM , Rating: 2
The hype made artificial demand for these cars, and now nobody is buying them? Who could have saw that one coming?

I just hope Tesla are too big to fail, and they get some bail out money.




RE: so basically?
By wiz220 on 7/7/2010 4:31:51 PM , Rating: 2
I thought the original roadster had a waiting list (along with the new car coming out soon). Maybe they just can't produce them efficiently enough?


Just what they need
By Dorkyman on 7/7/2010 12:16:13 PM , Rating: 2
So, the Tesla has received an endorsement from Messiah in the White House? Oh, great. The kiss of death for them.




RE: Just what they need
By SpaceRanger on 7/7/2010 12:48:43 PM , Rating: 2
I could have sworn I saw a Tesla on the cover the latest Madden game. Would explain the plumet.. ;)


By guacamojo on 7/7/2010 12:38:21 PM , Rating: 2
Greg,

So the general thrust of your blog is that hydrogen cars are the way forward, and that battery-based cars are unlikely due to lower energy density?

Some would argue that building the hydrogen infrastructure poses more hurdles than scaling up the electrical one.

Indeed, if electrolysis becomes the main production method for hydrogen, then scaling up electrical power generation becomes necessary anyways, right?

It seems to me at least, that both routes have significant technical hurdles to clear before either is a viable alternative to conventional gas-powered cars. Do you disagree? (I assume you do, since you're the CEO of a company promoting aluminum-lined plastic pipelines for H2 transport.)


By UNHchabo on 7/7/2010 2:22:39 PM , Rating: 2
While electric cars are far easier to support, hydrogen cars do have the benefit of taking no longer to fill up than gas-powered cars. Fully-electric cars, even with a special fast recharge, still generally need at least 1/2 hour to an hour to even be usable again if you run the battery low.

I only live a few miles from work, so an electric car would be a perfect commuter car for me. Hydrogen is much more feasible for road trips, though.


By Keeir on 7/7/2010 4:10:29 PM , Rating: 2
Hello UNHchabo.

Hydrogen is an energy carrier. Until Hydrogen can show better efficiency at carrying energy, its not really a viable alternative unless we choose to significantly increase our product of energy.

Range Extended Electric Cars could provide the limited use long range while avoiding during the majority use short range the loss of efficieny that comes with Hydrogen intermediate energy carrier.

BTW, the efficiency difference is signficant. If starting from electricity, a electric car is 2x-3x more efficient than a hydrogen car.


By UNHchabo on 7/7/2010 7:28:36 PM , Rating: 2
I'm not debating the efficiency of hydrogen, I'm merely stating that currently, hydrogen has the edge on usability on long-distance road trips. I'm thinking of days when I might be driving for 10 hours at a time, like when I did this for 6 days straight while moving across the country.


By lelias2k on 7/7/2010 10:55:37 PM , Rating: 2
Good lord man, were you going at 30 mph??? lol

I came from Savannah to San Diego (~2500 miles) in 3.5 days, and only in the last day and a half I drove more than 8 hours...


By UNHchabo on 7/8/2010 2:51:14 PM , Rating: 2
I may have been exaggerating a little bit with my drive-time per day, but it did take me 6 days of driving, at least 8 hours per day, to cover ~3000 miles. I had a trailer attached to my car, and I discovered that if I went more than 55 my gas mileage plummeted in a big way.

It was especially hellish because Google Maps put us at around 48 hours of driving, which divides up nicely into 6 days of 8 hours each. Not only that, but those 8 hours fall nicely around decently well-known cities. The problem is that the speed limit is 70 for a large portion of I-80, so if you're going 55, 8 hours of driving becomes 10.

Afterwards, I vowed that I would never again drive more than an hour with a trailer attached to my car. When I move back across the country, I'm shipping my stuff, not transporting it myself. That way I can travel at the speed limit without dropping to single-digit gas mileage.


By guacamojo on 7/7/2010 5:17:28 PM , Rating: 2
quote:
Fully-electric cars, even with a special fast recharge, still generally need at least 1/2 hour to an hour to even be usable again if you run the battery low.

There's potential for some of the nanotech batteries to have significantly-improved charge times versus the current crop. They have a hugely increased electrode surface area, dropping the internal resistance of the battery; fast discharge/charge cycles become much more practical.

I, for one, am very interested to see what happens with these over the long term.


By Spuke on 7/7/2010 5:58:43 PM , Rating: 2
quote:
I only live a few miles from work, so an electric car would be a perfect commuter car for me. Hydrogen is much more feasible for road trips, though.
Are you ok with having an "extra" car for just commuting? My "value for the dollar" meter is registering zero right now.


By UNHchabo on 7/7/2010 7:41:00 PM , Rating: 2
I don't do it myself, but I know several people who already do this. One drives a late-90s Civic to work because it's light and fuel-efficient, then drives an F350 when he's going camping with a trailer, or something else that requires more torque. I know another person who drives his Mustang Cobra on the weekends, but rides a rather modest motorcycle on his commute so he can get more than 50 MPG, and so he can avoid putting his car through the wear-and-tear that comes with stop-and-go traffic.

If I weren't terrified of California drivers swerving into me, I'd commute on a cheap motorcycle. Instead, I own one car, and drive it everywhere.


"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA














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