Skip to comments.3 Reasons Tesla Motors Will Dominate in 2014
Posted on 01/04/2014 10:31:44 AM PST by ckilmer
January 3, 2014 | Comments (2)
Tesla Motors (NASDAQ: TSLA ) celebrated a record year in 2013, with the stock surging nearly 350% during the year. That's a serious improvement over Tesla's gain of just 7% in 2011. The electric-car maker passed many milestones along the way, including reporting its first quarterly profit and winning the academy award of autos as its zero-emissions Model S took home Motor Trend's 2013 "Car of the Year" award. With the stock growing in value from $32 at the start of 2013 to where it trades today, around $147, it's hard to imagine there's much upside left in the name.
However, these three catalysts should move shares of Tesla higher in the new year, despite investors' soaring expectations for the stock.
This year, Tesla is on track to deliver more cars than ever before. The EV maker's CEO, Elon Musk, is confident that Tesla can hit an annualized rate of deliveries that exceeds 40,000 cars per year by late 2014. To put this in perspective, that amounts to roughly double Tesla's anticipated output rate of 20,000 cars in fiscal 2013.
In fact, Tesla looks to be ahead of the mark as the company now expects to deliver 21,500 vehicles worldwide for fiscal 2013. Moreover, Musk has a track record of under-promising and over-delivering. Therefore, I wouldn't be surprised if Tesla were to ramp up production even faster in the year ahead.
Tesla should unlock even more growth in the quarters to come as it expands operations overseas. The company is still in its infancy, and expanding into new markets, such as China, should help Tesla boost sales. The California-based company began taking reservations for its Model S in China last quarter and plans to make its first deliveries in the Asian country during the first quarter of 2014. In fact, Musk expects to have a handful of Model S cars on a boat to China as early as this month.
As the world's biggest market for premium sedans, China is an important market for Tesla. Of note is the fact that Tesla has already passed all of the homologation requirements in China, and launched a soft opening of its Beijing showroom in the region that was greeted with great fanfare. Meanwhile, the company has already received "hundreds of orders" for its Model S in Hong Kong, according to Bloomberg.
Additionally, the automaker continues to expand its Supercharger network, in both the United States and abroad, at an impressive clip. Tesla plans to have supercharger stations covering 80% of the U.S. and parts of Canada this year. On top of this, Tesla says it can cover 100% of the population of Germany, the Netherlands, Switzerland, Belgium, Austria, Denmark, and Luxembourg with Superchargers by the end of 2014.
While these stations create tremendous value for Tesla drivers, they don't cost the company as much as many investors might think. Thanks to a strategic partnership with SolarCity (NASDAQ: SCTY ) , to supply the solar panels that help power Tesla's supercharger stations, Tesla is able to deploy these stations at a fraction of the cost. Investors can also expect Musk to make a cross-country trip in a Model S later this year using these Superchargers. Ultimately, more Superchargers in more locations should help fuel greater EV adoption.
Model X market debut
The third catalyst for the carmaker this year is the much-anticipated debut of Tesla's Model X crossover vehicle. Tesla will begin deliveries of its Model X in late 2014. Thanks to the success of its Model S, there's already a strong brand presence for the company. This should help boost sales of its crossover vehicle as more Model X cars hit the road later this year.
Blending the benefits of a minivan with the performance of a sports car, the Model X promises to a big hit with drivers in 2014. Built on the same drivetrain as Tesla's Model S, the Model X can go from zero to 60 miles per hour in 4.4 seconds. Tesla first unveiled the all-electric SUV in February 2012, and last year pushed production of the Model X into late 2014 to accommodate sales of its Model S vehicles. Moreover, shares of Tesla should pull ahead later in the year if Tesla can deliver on its revised promise of getting the Model X on the road in 2014.
With these catalysts, together with Elon Musks' visionary leadership, I expect Tesla to achieve another record year in 2014.
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Domination of what? To my estimation, being the leader in a pack of environmental battery, or batter/gas generator cars isn’t a total market leader. It’s a leader of a niche market, for those with the dollars to get into it.
There’ll be a lot of disappointed e-car owners at the end of this long cold winter.
To “dominate”, there will need to be a massive breakthrough in battery technology.
For most people, an EV is simply not feasible.
Major car companies know how to reverse engineer. Selling a $100,000 car for $90,000 doesn’t get far.
Real Tesla sales numbers seem not available through independent reporting agencies, unlike other car brands.
GM may buy Tesla as a way out.
I think everyone who successfully signs up (and pays) for Obamacare should get a free Tesla. If they do that, they might hit six-figure sales!!!
Apparently the government doesn’t want you driving cars.
Yes, Graphene Super-Capacitor? perhaps.
However, I posted the other day Ford's Focus with Solar Panels on the roof, and then I spoke to my auto gnome about it and the "Concentrator" they are using. They hadn't seen it, but was enthused and thought it was brilliant in this sense. My gnome noted P-voltaic Cells are between 21% to 36% efficient, and unheard of number even 20 years ago which is about what an efficient car these days is actually getting to your rear wheels i.e. fuel burnt turned into motion. If you add the stationary concentrator, it would act as a super / turbocharger in a car, and @ Altitudes ( Denver and or sunnier climates, this might make a great deal of sense. Add to that let's say another 5% better PV-cell(s) in a few years, and the gains get better. Full blown Solar powered car? Maybe not, but a CNG powered car that has a heat pump heating cooling system driven by said roof mounted panels? Not out of the question...
Push pedal cars will dominate.
What good is an electric car going to be with the Kenyan and his EPA shutting down all of the power plants. How are these idiots going to recharge their batteries?
They’ll also need to be more successful at suing people who give them bad reviews.
They left out the auto-ignition feature.
I wouldn’t have an electric piece of crap they call a car if i had unlimited millions!
Interesting possibilities. Agree on CNG which we have in abundance as an alternative fuel, and the compressed air car also has potential for short hops. Something that I’d like to see change is the idea of “one size fits all” when it comes to vehicles. I could get excited about a non-gasoline vehicle with 20-30 mile range along with a conventional vehicle for longer trips.
Despite the number of FReepers who seem to live just to denigrate technology, we’re capable of accomplishing great things in transportation and energy. Just get the government out of the way and let private enterprise do what it does best.
It will be interesting to see what happens in the future. Hopefully government will “mostly” keep from interfering. I say “mostly” because we all know they will to some degree.
“Uh, Tesla Motors will dominate the 1 percent EV market with $165,000 cars? Yup. Got it...a sound business model if there ever was one.”
“With the stock growing in value from $32 at the start of 2013 to where it trades today, around $147, it’s hard to imagine there’s much upside left in the name.” (from the article)
Tesla knows it’s a niche market. They also know that government will be involved in the market. They started with a luxury/sports model and plan to move towards a more base model in time. How is this a poor business plan?