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Sorry, you are no longer independent once you control less than 51% of the company. Is anyone else mystified by this run-up in stock price? Tesla seems to hav

Sorry, you are no longer independent once you control less than 51% of the company. Is anyone else mystified by this run-up in stock price? Tesla seems to have very little innovative technology (anyone can attach laptop batteries to a DC engine) and competitive products like the Nissan Leaf and Chevy Volt will be out this year that will beat them in price. Their flagship product will not be released until 2012 or later. They don't manufacture their own cars and are attempting to build a new factory and learn about auto manufacturing while they are doing it. Don't get me wrong, I'm glad they're doing what they are doing. The auto industry needs someone to show them the way, but I'm just trying to see what the upside of this stock is for an investor. I predict their cars will be nice "proof of concept" vehicles, that will be copied by the Fords, Toyotas, Hondas, and Nissans of the world and made into commodity vehicles.

raganwald 16y ago
They seem to want to be the Apple of electric cars. The difference being that Apple was already shipping a successful product when it went public, and indeed they faced many dark days once the rest of the world started copying everything they did. I will watch Tesla's progress with a great deal of interest.
todayiamme 16y ago
Elon Musk still holds 65% of the company. In fact, it is a pre-requisite of the US Govt. loan that he does so. On the other hand I wish that making an electric car was as simple as combining a motor and a battery. It isn't. To achieve maximum performance out of a vehicle the motors need to be specially designed and integrated into a powertrain that is suitable for mass reproduction. It is quite easy to make a one off design but tooling a factory that produces your design within tolerances everyday is quite another beast. In fact, they faced challenges in tooling existing factories to make the Tesla Roadster to their tolerances (http://en.wikipedia.org/wiki/Tesla_Roadster#History_of_production http://en.wikipedia.org/wiki/Tesla_Roadster#History_of_produ...). I would invest in Tesla Motors in a heartbeat if I had the money, because they have conclusively proven that well designed battery electric vehicles can be mass produced and can work in the real world. Most of the other manufacturers are still in the proto-typing phase and if they ever release their products out then it won't be without significant growing pains. So, yes they are unique.
- jakarta 16y ago
  Is it really wise to invest in companies that depend on loans from the US Govt to operate? I'm not too sure. I've been pretty impressed with BYD: http://en.wikipedia.org/wiki/BYD_Company http://en.wikipedia.org/wiki/BYD_Company At the very least, with BYD you have the chance to get one of the world's leading manufacturers of batteries as downside protection in case the automobile business does not pan out.
  - gte910h 16y ago
    Is it really wise to invest in companies that require venture capital to operate? A loan is merely one way of getting funding.
    - jakarta 16y ago
      There's a big difference between getting VC funding and getting a loan from the US Govt. The US Govt is going to be more likely to loan to businesses where the underlying economics just aren't there -- which is why the private sector is unwilling to fund the business. Also, I think it is incorrect to equivocate equity investing with debt funding. When you are making a loan, you are mostly betting on the survival of the business. If they survive long enough to pay back your loan, with interest, it is a win for you (the lender). When you are investing in the equity you are actually owning a piece of that business and the future cash flows that come to it. In that sense, you are betting not only on its survival but also its ability to thrive.
      - dasil003 16y ago
        The US Govt is going to be more likely to loan to a business..." This seems like a poor way of making investment decisions. The fact that a VC invests in a company might be a good reason to look at the company, but it shouldn't be the most significant data point. Government loans are even less relevant. You yourself say: When you are making a loan, you are mostly betting on the survival of the business. Yeah, so what does that say about the growth potential of the company? Less than nothing. In fact, you could make the argument that the board is so bullish on the future of the company that they preferred loans to VC because they give up less upside.
damoncali 16y ago
Yes, the price seems really high for a company facing such enormous risk in what is essentially a commodity industry. More power to them, but I wouldn't give them any money. It is way more complex than "hooking up a laptop battery to a DC motor, though. I give them a lot of credit for getting as far as they have.
fuzzmeister 16y ago
The idea that Tesla has little innovative technology is simply wrong. The majority of their R&D has gone into their battery technology, and it has given them a huge leg up on their competitors. The Tesla Model S will go up to 300 miles on a charge, while the Leaf will max out at 100 miles and the Volt will need to start burning gas after 40 miles.
dirtyaura 16y ago
They certainly have innovated, both in a battery technology and processes. For example, in Charlie Rose's interview, Elon explained that difficulty is not in a single battery cell tech, but how to assembly them together so that maximum efficiency is gained. http://www.charlierose.com/view/interview/10550 http://www.charlierose.com/view/interview/10550

raganwald 16y ago

They seem to want to be the Apple of electric cars. The difference being that Apple was already shipping a successful product when it went public, and indeed they faced many dark days once the rest of the world started copying everything they did. I will watch Tesla's progress with a great deal of interest.

todayiamme 16y ago

Elon Musk still holds 65% of the company. In fact, it is a pre-requisite of the US Govt. loan that he does so. On the other hand I wish that making an electric car was as simple as combining a motor and a battery. It isn't. To achieve maximum performance out of a vehicle the motors need to be specially designed and integrated into a powertrain that is suitable for mass reproduction. It is quite easy to make a one off design but tooling a factory that produces your design within tolerances everyday is quite another beast. In fact, they faced challenges in tooling existing factories to make the Tesla Roadster to their tolerances (http://en.wikipedia.org/wiki/Tesla_Roadster#History_of_production http://en.wikipedia.org/wiki/Tesla_Roadster#History_of_produ...). I would invest in Tesla Motors in a heartbeat if I had the money, because they have conclusively proven that well designed battery electric vehicles can be mass produced and can work in the real world. Most of the other manufacturers are still in the proto-typing phase and if they ever release their products out then it won't be without significant growing pains. So, yes they are unique.

jakarta 16y ago
Is it really wise to invest in companies that depend on loans from the US Govt to operate? I'm not too sure. I've been pretty impressed with BYD: http://en.wikipedia.org/wiki/BYD_Company http://en.wikipedia.org/wiki/BYD_Company At the very least, with BYD you have the chance to get one of the world's leading manufacturers of batteries as downside protection in case the automobile business does not pan out.
- gte910h 16y ago
  Is it really wise to invest in companies that require venture capital to operate? A loan is merely one way of getting funding.
  - jakarta 16y ago
    There's a big difference between getting VC funding and getting a loan from the US Govt. The US Govt is going to be more likely to loan to businesses where the underlying economics just aren't there -- which is why the private sector is unwilling to fund the business. Also, I think it is incorrect to equivocate equity investing with debt funding. When you are making a loan, you are mostly betting on the survival of the business. If they survive long enough to pay back your loan, with interest, it is a win for you (the lender). When you are investing in the equity you are actually owning a piece of that business and the future cash flows that come to it. In that sense, you are betting not only on its survival but also its ability to thrive.
    - dasil003 16y ago
      The US Govt is going to be more likely to loan to a business..." This seems like a poor way of making investment decisions. The fact that a VC invests in a company might be a good reason to look at the company, but it shouldn't be the most significant data point. Government loans are even less relevant. You yourself say: When you are making a loan, you are mostly betting on the survival of the business. Yeah, so what does that say about the growth potential of the company? Less than nothing. In fact, you could make the argument that the board is so bullish on the future of the company that they preferred loans to VC because they give up less upside.

damoncali 16y ago

Yes, the price seems really high for a company facing such enormous risk in what is essentially a commodity industry. More power to them, but I wouldn't give them any money. It is way more complex than "hooking up a laptop battery to a DC motor, though. I give them a lot of credit for getting as far as they have.

fuzzmeister 16y ago

The idea that Tesla has little innovative technology is simply wrong. The majority of their R&D has gone into their battery technology, and it has given them a huge leg up on their competitors. The Tesla Model S will go up to 300 miles on a charge, while the Leaf will max out at 100 miles and the Volt will need to start burning gas after 40 miles.

dirtyaura 16y ago

They certainly have innovated, both in a battery technology and processes. For example, in Charlie Rose's interview, Elon explained that difficulty is not in a single battery cell tech, but how to assembly them together so that maximum efficiency is gained. http://www.charlierose.com/view/interview/10550 http://www.charlierose.com/view/interview/10550