Print 10 comment(s) - last by Helbore.. on Dec 29 at 1:27 PM

Tesla faces a long road over the next year to bring its more-affordable Model S (pictured) luxury EV to market.  (Source: Tesla Motors)

Tesla's only current revenue comes from its modest Roadster 2.5 EV sales.  (Source: Tesla Motors)
Stock is still sailing high above the IPO price, though

Following a pessimistic report by CapStone Investments analyst Carter Driscoll, in which he rated Tesla Motors Inc. as a "sell", investors went on a mini-selling spurt, depressing the electric vehicle maker's shares to around $25.20 -- a drop of 21 percent. 

Mr. Driscoll comments, "Right now the risks outweigh positives."

The big drop was followed by a slightly recovery, as shares today have climbed to around $26.20.  Concerns about the EV maker's fate are far from over, though.

Tesla is racing to try to introduce its Model S mass-market electric vehicle, an entry-level luxury vehicle that will be priced at approximately $57,000 USD before any applicable tax credits.  With tax credits, the vehicle's price could dip to $50k or less.

The company is hoping to deliver the vehicle in just over a year -- with the first orders being delivered sometime in early 2012.  The vehicles, assembled at what used to be Toyota's NUMMI plant in California, will be able to travel 300 miles on a charge.  Tesla is also targeting sportier performance than its established foes, which include General Motors, Ford, and Nissan.

The investment required to developed the advanced vehicle is immense and has caused the company to once again become unprofitable, despite shipping modest numbers of its current-generation Roadster EV.  With founder and CEO Elon Musk already cash-strapped from his investments in his other company -- Space X -- it remains to be seen whether the company has enough charge in its packs to reach its destination.

Nonetheless, the share price still indicates cautious optimism, as the IPO price was $17, meaning that the current share price is at a premium of approximately 55 percent.  Monday's drop-off was similar to that in recent months of networking giant Cisco, who similarly suffered from unfavorable analyst reports.

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By AssBall on 12/28/2010 2:19:25 PM , Rating: 2
I don't understand people spent so much on this crappy boutique car company in the first place. Lot's of other boutique car companies just keep their costs within reasonable margins and do okay. Saleen comes to mind.

RE: Stupid
By Suntan on 12/28/2010 2:35:49 PM , Rating: 1
Yeah, but Saleen just builds small quantities of overpriced cars expressly targeted at rich tools that are only interested in ostentatious objects that help them portray themselves as something they are not… Oh, wait…


RE: Stupid
By AssBall on 12/28/2010 4:32:47 PM , Rating: 5
Their business model relies on customer retardation. I expect Apple to sue them soon over the patent.


RE: Stupid
By CharonPDX on 12/28/2010 8:24:46 PM , Rating: 2
Lots of other boutique car companies aren't attempting to expand to mass-market. If they had stayed with the roadster, they would still be profitable. If they had gone with a higher-end "boutique" EV (something to compete with the Lexus 600h $100k sedan, rather than a BMW 5-series,) they might have been able to stay profitable.

But they decided to compete with the "low end luxury", as the only vehicle in its class (low-end luxury EV, rather than "mainstream" EV,) which means they had to do a lot of investment in volume production.

If they make it through to production, I think they will likely become profitable again quickly, and be able to expand to 'true' mainstream EVs. As it is, the Model S is $20,000 more than a Nissan Leaf; which is about the same price difference between a standard "nice" compact car and a low-end luxury sedan. (Compare Toyota Corolla at $15,000 and a BMW 328i at $35,000.)

No worries...
By hondaman on 12/28/2010 2:51:39 PM , Rating: 2
Their rich uncle Obama will be along shortly with his entourage of green energy czars with blank checks. Again.

RE: No worries...
By marvdmartian on 12/28/2010 3:35:53 PM , Rating: 2
I wonder how much good that's going to do, when it was announced today that China is going to curtail shipments of rare earth metals (necessary for the production of electric motors used in EV's and Hybrids) to the USA by 10%? (and if I remember correctly, they've cut back on shipments to Japan as well)

I'm willing to bet that a shortage of rare earth metals, caused by a 10% reduction of shipments, will result in more than a 10% increase in the price of these vehicles. Will it make a difference big enough to curtail sales?

RE: No worries...
By Shanghai Dan on 12/29/2010 9:57:42 AM , Rating: 1
That's a non-issue; China's clamping down on RAW rare earth metals export, not finished goods using rare earth metals. There are zero magnet makers in the US; only finished NeFeB magnets come in (usually from China, some from Brazil, some from South Korea).

Companies like Tesla who buy finished magnets for use in their motors (more accurately, companies like Tesla who buy finished motors from suppliers who buy finished magnets from Chinese companies) will see zero impact because they're not buying raw neodymium; they're buying finished goods.

RE: No worries...
By theapparition on 12/29/2010 11:00:48 AM , Rating: 2
So let me get this strait.

I reduce supply of "widget metal" to Widget Mfg Co, which in turn raises prices of raw widget metal. Widget Mfg Co has to pay more for that raw metal. You only buy finished widgets. So therefore, my reduction of supply doesn't have an effect on the price you pay for finished widgets.

Some seriously flawed logic you have going on there.

RE: No worries...
By Helbore on 12/29/2010 1:27:55 PM , Rating: 2
Only if Widget Mfg Co was a non-Chinese company. These restrictions won't affect any companies who are manufacturing inside of China (in face, it might reduce their costs, as local resources will be more readily available).

Get out now!
By TheDoc9 on 12/28/2010 4:35:54 PM , Rating: 5
Drop on 'uncertainties' lol. Probably a big share holder dumping his stock and the other day traders following suit haha.

The funniest paragraph in this story is the last basically saying 'hold on to your stock, don't worry, everything's ok' - while the stock continues to lose value.

"If you can find a PS3 anywhere in North America that's been on shelves for more than five minutes, I'll give you 1,200 bucks for it." -- SCEA President Jack Tretton

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