Tesla Motors: Is It Time to Buy Into the EV Revolution?
With shares of Tesla Motors (NASDAQ:TSLA) trading around $33.00, is it a Buy, a Wait and See, or a Stay Away? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
Tesla Motors is in the business of designing, manufacturing, and selling electric cars and electric vehicle powertrain components. Broadly, its strategy has been to first produce high-end cars for early adopters, and then transition into the mass market. There’s a lot more to be said about Tesla’s product line than is contained here, and there is a massive amount of conversation surrounding its vehicles. But at a glance, the company has produced quality, innovative cars, and promises more to come.
Tesla’s first vehicle was the Roadster, a battery-electric sports car produced between 2008 and 2012. The Roadster was the first production BEV to use lithium-ion battery cells and travel more than 200 miles on a charge. At a base price around $109,000, over 2,350 have been sold so far. The amazing quality of the car took many by surprise, and in many ways, legitimized electric vehicles.
The Model S is a full-sized electric sports sedan that was officially launched to customers on June 22, 2012. The first 1,000 were Signature series models with 85 kWh battery packs that have a range upward of 300 miles. The base Model S will start at $49,900 after a $7,500 federal tax credit for a 40 kWh battery unit that has a range of around 160 miles. The Model S recently won Motor Trend’s Car of the Year award for 2013.
The Model X is a full-sized battery electric crossover sports utility vehicle that was unveiled on February 9, 2012. Deliveries are planned for 2014.
A = A-Level Management Runs the Company
Over at Glassdoor.com, Tesla Motors CEO Elon Musk has an 83 percent approval rating.
Musk has a long list of accolades related to his achievements in engineering and business. After selling a company called Zip2 to Compaq for $307 million in 1999, he made his name as a co-founder of PayPal (NASDAQ:EBAY).
In 2002, he founded Space Exploration Technologies, commonly known as SpaceX. In 2008, the company landed a $1.6 billion contract from NASA to transport cargo to the International Space Station, replacing the Space Shuttle program after it retired in 2011. He is currently CEO and CTO at SpaceX.
In 2003, he co-founded Tesla Motors, where he remains chairman, product architect, and CEO.
In 2008, he was named by Esquire magazine as one of the 75 most influential people of the 21st century.
In 2009, he was awarded The Golden Space Medal by the Fédération Aéronautique Internationale for the ambition and achievements of SpaceX.
Also in 2010, he was listed as one of Time Magazine’s 100 people who most affected the world in the Thinkers category. And, although not necessarily an accolade that demonstrates his ability to lead a business, Elon Musk is reportedly one of the inspirations for the characterization of genius-billionaire-playboy-philanthropist Tony Stark in Iron Man. He even had a cameo.
In 2011, Forbes listed him as one of America’s 20 most powerful CEOs under 40.