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.
U.S. automakers boomed after WWII, but the coming boom in the Chinese auto market will put that surge to shame! As Chinese consumers grow richer, savvy investors can take advantage of this once-in-a-lifetime opportunity with the help from this brand-new Motley Fool report that identifies two automakers to buy for a surging Chinese market. It's completely free -- just click here to gain access.
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?
Tesla sales are going to be so hot they will be on fire. Literally; On fire.
“The consumer never wins, and government never loses.”
Very succinct. Thanks for the reply.
From the hole thingie in the wall, of course!
Obama 'n them have made some great strides in scientology, don't you know?
I would consider that a plus.
Tesla’s CEO, Elon Musk is my favorite African American.
Day-yum. What was this thread about?
I think Candice Swanepoel.
It’s going to be hard to charge up electric cars without coal fired electric generating plants.
Why would you be excited about a nongas car going 20 to 30 miles per gallon when the gassed car has been doing that for decades?
If you’re about to burn to death while trapped in a battery fire, is there any way to electrocute yourself first or do you have to carry a revolver?
Tesla is a flash in the pan. Its buyers are just a bunch of Bat Man wannabees with a little too much money and time on their hands.
Just remember: they call themselves fool.com for a reason.
I don’t think she’s American, but she could qualify as my favorite African.
Without the state and fed funding, they would have gone under long ago........
You’re right. I was just thinking of South Africa, and my mind went to her. To be fair, hot women make my IQ drop sharply.
-— How are these idiots going to recharge their batteries? -—
Isn’t this fun?
Ed Wallace has been on their case for a couple of years now. Tesla would need to build ~100,000 cars per year just to break even.
Don't get me wrong, EVs are fine for running errands around town, which Ed does in his Mitsubishi MiEV for $1.25 in electric costs per week.
This article seems designed to sucker a few more fools onto the bandwagon so that the earlier investors (aka fools) can find a more willing sucker.
There will be at least two solutions proposed for this tax deficiency. My guess is both will be adopted, with some states, counties, cities enacting variations of both.
1. Taxes on electricity will be substantially increased, whether metered for EVs or simply an overall rate increase.
2. A black box will record every mile you drive, and you'll be taxed on the total mileage at rates that exceed the current gasoline tax by 50 to 100 percent (simply my guess).
YOU GONNA PAY MORE TAXES! Surprised?
Prepare to pay your "fair share".
I'm here from the gummit and I'm here to hep you. :-)))
I really ain't from the gummit.
“And it rates 5.4 Stars in all 57 States!!!”
We’re subsidizing a luxury car; this has always been my issue.
Tesla should build a <$40k model to complement or terminate all subsidies/rebates.
And they can build their own damned supercharger stations (that only work on Teslas) without regard to subsidies.
The Nissan Leaf is electric, but unlike the Tesla, it is an economy car that carries the stigma of a relatively low price. At least compared to a Tesla. One can never impress neighbors that you spent $100,000 on an electric car with a Leaf.
Nissan's Leaf SL has a MSRP of $35,690. The $7,500 tax credit brings this down into the high end of the econocar range. After 2 years, based on resale prices, a Leaf is worth less than half of the original MSRP. This steep depreciation might more accurately reflect the value that the free market puts on an electric car. Requiring constant infusions of gov't cash is not a viable long term business plan. Governments change, and governments eventually run out of money for frivolous feel-good subsidies.
(BTW, didn't Cartman get his electric from the gov't for free?)
“Requiring constant infusions of gov’t cash is not a viable long term business plan. Governments change, and governments eventually run out of money for frivolous feel-good subsidies.”
This is yet to be seen. Though I’m against it, it’s a very small percentage of government funds.
I know I don’t want a Leaf or a Tesla. I just purchased a new Honda Accord for $23K.
P.S. Cartman is awesome.
And with the Millions of $$$$ it received in both California and Federal subsidies that kept it alive, who do you suppose profitted the most when the stock sales went up?
the federal program under which they borrowed money was created by george bush. Tesla paid back the loan with interest two years ago.
The Tesla story in this regard is actually a success for the federal government.
The Nissan Leaf is electric, but unlike the Tesla, it is an economy car that carries the stigma of a relatively low price.
The stigma is not the low price but rather the small fuel range. The Leaf can go 100 miles. The tesla can go 250 miles. That make the Tesla suitable for local driving. You can leave the driveway without immediately having to worry about refueling the car.
Also, the Tesla has a lot of curb appeal. Its one cool looking car.
At least compared to a Tesla. One can never impress neighbors that you spent $100,000 on an electric car with a Leaf.
Nissan’s Leaf SL has a MSRP of $35,690.
Tesla plans to have a 30k car with the same fuel range as the S Class — available in 2016.
Requiring constant infusions of gov’t cash is not a viable long term business plan.
Tesla did borrow government money under a program created by George Bush. But the money was paid back with interest two years ago.
If Tesla succeeds—ten years from now in creating an electric car industry then this one success of federal money will have justified the 100 failures of government money like Solyndra. This success failure ratio is about like that of private industry. What would be the meaning of an electric car success? The demand for oil would collapse and so would the price of oil. This would bankrupt the arab gulf states and defund al quaeda. Also the wealth of the industrialized world would go up big time—because lower energy prices are pure oxygen to the worldwide economy. This would be a strategic victory for the USA’s war on terror.
Domination of what? To my estimation, being the leader in a pack of environmental battery, or batter/gas generator cars isnt a total market leader. Its a leader of a niche market, for those with the dollars to get into it.
Yeah that’s about right.
The big question is whether Tesla can bring down the costs so as to make the car available to a larger audience. If they do that then the world changes.
-— What would be the meaning of an electric car success? The demand for oil would collapse and so would the price of oil. -—
Where does electricity come from?
To dominate, there will need to be a massive breakthrough in battery technology.
For most people, an EV is simply not feasible.
Or Tesla needs to bring down the cost of the car. That’s their next promise. Tesla’s next big promise is not that they’ll improve the performance of their batter but rather that they’ll bring down the cost of the Tesla S class from 80k to 30K in 2016—without harming performance.
This is a big deal because the big breakthrough for Tesla has been their improved battery performance—which has pushed up the range of their electric car from the industry standard 100 miles to 250 miles. This is a big deal because it makes the Tesla totally suitable for local driving. People don’t have to worry about recharging their Tesla the moment they leave the driveway. Same would go for the 30k car in 2016.
Will that happen? An interesting question with incredibly profound implications. Why? because tesla is doing all their manufacturing under one roof in californa.
This totally goes against industry dogma which resources car parts from all over the world. If Tesla succeeds in collapsing the price of their car using parts from their one car plant in San Jose—then you can expect a revolution in american manufacturing to soon follow as american manufacturers bring their manufacturing home.
Major car companies know how to reverse engineer. Selling a $100,000 car for $90,000 doesnt get far.
agree that Tesla is forcing the major car companies to throw a lot more money at electric cars.
Real Tesla sales numbers seem not available through independent reporting agencies, unlike other car brands.
last number I saw for Tesla 2013 sales was about 21,000 cars. They’re projecting 40,000 cars for 2014.
Apparently the government doesnt want you driving cars.
imho the collapse of the cost of oil represents strategic victory in the global war on terror as it would defund the the gulf state and therefor dry up funds for Al Qaeda. As well, cheaper oil prices are pure oxygen to the world wide economy. The world wide economy including the USA would enjoy much higher growth rates.
Yep. Credibility gap.
Tesla claims 20,000 units for 2013. That would make them more common than new Jaguars. Who believes that?