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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.)

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