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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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).

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