Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Can The New York Times Change Tesla's Investing Thesis?

Near-faultless execution has led Tesla Motors to the brink of success, but the road ahead remains a hard one. Despite progress, a looming question remains: Will Tesla be able to fend off its big-name competitors? The Motley Fool answers this question and more in our most in-depth Tesla research available for smart investors like you. Thousands have already claimed their own premium ticker coverage, and you can gain instant access to your own by clicking here now.

Andrew Tonner: Hey, Fools, Andrew Tonner here. I'm joined today by analyst Brendan Byrnes.

Brendan, one of the big storylines we've seen in the industrial sector is Tesla (NASDAQ: TSLA  ) -- a truly game-changing company, potentially -- but at the same time they've caught their fair share of flak in the past. Most recently, the New York Times article giving the Model S a scathing review, Tesla firing another shot right back at them.

When you look at this storyline that's unfolding into a media drama, almost, what do you see?

Brendan Byrnes: Yeah, a very interesting storyline, especially Elon Musk coming out and directly firing back at the Times. Of course the story is, the Times was driving the car from Washington, D.C., up to Boston and said it ran out of power sooner than it should have because of the cold weather. Elon Musk says, "No, no, no. We have onboard computers in this car and we can track this."

Andrew: "We actually know," yeah.

Brendan: Yeah. He put up a post, he put up these graphs. Overall, they're going to fight this out. We've already seen a rebuttal by the New York Times columnist, so it'll go back and forth a little bit but I don't think this is a thesis changer overall for Tesla, when you look at this stock from an investment perspective.

It remains a speculative play, I think, but that doesn't mean it can't be a successful one. I love what Elon Musk is doing. I'm certainly not going to bet against Elon Musk. The guy is PayPal, SpaceX, SolarCity -- what else do you want the guy to do?

I think it remains. They're cash-flow positive, which is certainly a good thing. The Model S has gotten great reviews, other than this New York Times piece, overall. They're coming out with a Model X in 2014, which will be more of an SUV, but I'm more interested to see what's beyond that.

There's talk of maybe a $20,000-$30,000 car. I think they really need to hit that niche to make this more mainstream.

Overall, when you're talking about Tesla it's kind of a chicken-and-the-egg type thing. The car is there. It's got 160-mile range on the base model, up to 300 miles on the extended version model, so the car is there. The infrastructure, can it really catch up? That's where they have to get to right now.

Tesla, again, a speculative stock, but I think they can come in and disrupt the big boys -- Ford, GM, Toyota and Honda -- if they can gain traction in this electric space, if the infrastructure is there. We already see them partnering with Toyota on the electric RAV4 so they have the technology there. It's all about whether this can gain adoption with the mainstream.

If you think it can, I think Tesla's a great play, but it remains speculative.

Andrew: Yeah, exactly. I think the other key here, too, is it's going to take a long time for this investment thesis to unfold as well.

Brendan: Right.

Andrew: Definitely a stock for a patient investor. It could be a big winner, but it's also definitely risky. Brendan, thanks for your insight. Thanks for watching, folks, and Fool on!

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2264325, ~/Articles/ArticleHandler.aspx, 9/28/2016 6:34:45 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 9 hours ago Sponsored by:
DOW 18,228.30 133.47 0.74%
S&P 500 2,159.93 13.83 0.64%
NASD 5,305.71 48.22 0.92%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/27/2016 4:00 PM
TSLA $205.81 Down -3.18 -1.52%
Tesla Motors CAPS Rating: **