Love the Car, not the Stock

Here are two questions to ask when presented with a hot new tech stock with designs to solve the world's problems. First, is this technology really going to be the answer? Second, is this company going to be the one to provide the technology? When it comes to electric cars, investors better hope we're grading on a curve.

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.

Read/Post Comments (7) | Recommend This Article (6)

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  • Report this Comment On February 22, 2013, at 4:12 PM, jamesdan567 wrote:

    All surface vehicles will be electric. fossil fuel powered cars (FFV)will go the way of horses....

    its inevitable because EV's will be driven by free fuel (solar power) and FFV's will face higher and higher fuel costs since FF is a finite, and declining resource. FFC fuel costs are going up. EV costs are declining. Once the parity point has been passed, EV's will sweep in like spreadsheets did in the 80's. This is a fact.

    of course, Tesla is speculative and risky. Of course the timing of this transition is unknown.

    yes, of course, Tesla will not be the only benefactor. So far though, they are the leader....

    the secular trend is clear. 30 years ago there was virtually no solar power, no EV's and no hybrids. thats changed dramatically and this change will continue. FFV's are the horse and buggy of our time. The only question i have is why wont people admit reality. :-)

  • Report this Comment On February 22, 2013, at 4:59 PM, LoveMyTesla wrote:

    Good segment. Now you say Tesla is a niche, but aren't Porsche, Mercedes, Ferrari, etc? Tesla is more moderately priced than the mid-to-high end models of all these companies and they have something the others don't have right now..... an all-electric car! As long as sales trend as they have been for the past few months and no bad news comes out that they can't overcome (like NYT), these guys should be a stable investment by later this year.

    Good point JamesDan...charging stations are popping up everywhere and solar technologies is quickly evolving/improving, so I'm going to hold onto my TSLA shares....and my Model S.

  • Report this Comment On February 22, 2013, at 5:44 PM, muchohobbies wrote:

    I think Mr. Hartzell is missing some key points here. Tesla does not have to "solve the world's problems" to sell a lot of cars. It just has to offer an attractive option to current ICE technology. The Nissan Leaf is a poor comparison to the Model S. The Leaf has very oddball styling, gets 75 mi on a charge and is no fun to drive (0-60 in 7.9 sec). The Model S can go about 300 miles on a charge and does it in beauty and style (0-60 in under 5 seconds). Finally, Tesla has strategic alliances with both Daimler and Toyota. Those are powerful market penetrating alliances for Tesla's technology, with companies that have deep pockets. Would not surprise me if Tesla were very successful as a stand alone company, also would not surprise me to see them bought out by a big boy car company in the not too distant future. Tesla stock now.

  • Report this Comment On February 22, 2013, at 7:25 PM, GregoryHipps wrote:

    In the ranking of my personal interests - cars comes much higher on the list than finance. I love my gas burning car, truck, and motorcycle. I'm not the most environmentally conscious guy, either. That being said, I would give my left arm for a Model S Performance or a Roadster. Comparing the Model S to a Nissan Leaf or a Volt is much like comparing a single engined Cessna to a Gulfstream because they are both planes.

    Tesla is making vehicles that appeal to people other than tech savvy green geeks. Currently, I drive a Corvette that gets about 15mpg and seats two people. It costs about the same as the entry level Tesla. The "performance" edition costs a little premium, but it has IDENTICAL performance to my Vette (Dragtimes reported 0-60 in 3.9 seconds, 12.1 second 1/4 mile, with the same center of gravity for cornering), but seats 5 people, looks astonishing, is much more luxurious, and doesn't cost me $60 to fill at the pump.

    This isn't necessarily a "Niche" vehicle. It's a car everyone can appreciate.

  • Report this Comment On February 23, 2013, at 4:24 AM, Seedye wrote:

    Have you seen the news for natural gas? I don't think people will stand for fracking practices much longer, and even with fracking, natural gas has probably already hit its peak.

    There's also a reason why you rarely hear about fuel cells these days. For one, the economics of it put its practical use years into the future, if not decades. Secondly, the auto fueling infrastructure is pretty much non-existant, and won't be for years after the viable cars are made. Finally, the best energy source for making hydrogen for fuel cells is natural gas.

    Meanwhile, electric cars are here today, everyone has electricity in their homes, and recharge stations are popping up all over the place, including Tesla's superchargers.

  • Report this Comment On February 25, 2013, at 6:26 AM, stainlesssteel77 wrote:

    Buck Hartzell's Tesla analysis has essentially zero validity:

    "…we have fuel cells, natural gas and gasoline""

    Fuel cells are about 4x the energy cost vs. electric i.e. not practical; natural gas/fracking have widely known disadvantages, and along with gasoline have the same major disadvantages vs. electric. See "Who Killed the Electric Car" on hydrogen:

    0:37 "ICEs getting much much more efficient" True, conversion efficiency is improving to levels amazing for ICEs, but from the 25-30% range to an 35% at best, vs 85 to 89% for EVs. ICEs can never approach EV conversion efficiency due to inherent massive waste heat:

    $800M liabilities, going to run cash to zero any day etc.: Classic looking in rearview mirror, rather than any indication of recognizing the reality Tesla has reached sustainable 400 cars/week production and on track to 1.5 billion 2013 revenue, along with accelerating tapping of the 3x plus size worldwide market vs. US market.

    "They need a lower price car" Disregarding the bizarre facial contortions, Buck is apparently unaware lower priced cars has been Tesla's plan since 2006:

    "Price of [lithium-ion] battery technology..." High, but sufficiently low to make Tesla competitive in the $70k plus luxury segment. Further apparently unaware that Li ion batt tech is improving approx 5 to 8 percent/year--re CTO Straubel at Cleantech Feb2013:

    "Nissan Leaf and Chevy Volt at sweeter price points, and they haven't seen wide adoption..."

    This is due to these vehicles being far less competitive at their price points than Tesla, rather than any innate shortcoming of EVs: The Volt is a hybrid, not true electric, and suffers from the massive design compromises of lugging around two separate drivetrains, as well as poor GM marketing. The Leaf has many disadvantages: goofy styling, very short range, unsophisticated air cooled battery pack shortening its lfe, vs Tesla's active temperature managed pack etc.

  • Report this Comment On March 05, 2013, at 7:44 PM, gene132 wrote: 1949, Kaiser Frasier Motors looked like a good buy.

    By 1955, it was out of business.

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