[EEGator]

“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?

[Sooth2222]

How is this a poor business plan?

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?)