Why Tesla Motors Will Have the Last Laugh

Pundits ridiculed Tesla Motors (NASDAQ: TSLA  ) last week after its "$500 a month" new-car loan program turned out to be based on some dubious assumptions. But Tesla might end up having the last laugh after all. In this video, Fool analyst John Rosevear explains what the real goal of Tesla's new financing offer might be -- and why it's a great long-range move for the upstart carmaker.

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Read/Post Comments (8) | Recommend This Article (9)

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  • Report this Comment On April 14, 2013, at 10:37 AM, mickrussom wrote:

    Elon stole the company and used ill gotten / stolen taxpayer money to make cars for the 1%. Somehow all these details are lost. The original real tesla founders wanted built-at-cost electric cars for everyday people. No one-percenter roadsters built with tax money stolen from the people.

    Musk should be in prison.

  • Report this Comment On April 14, 2013, at 1:36 PM, Marshgre wrote:


    Do you have any evidence of this theft?

    You do know the roadster is no longer manufactured. And the current Tesla is much less costly and more practical than the roadster. $70,000 is still expensive but I know many "average" people who drive $70,000 to $80,000 cars. They are NOT one percenters either.

  • Report this Comment On April 14, 2013, at 1:47 PM, Marshgre wrote:

    I like the buy back plan as this will hopefully create a good pool of used Teslas that are sold through Teslas stores or service centres. I think getting cars into the used car market will drive even more new car sales as the lower price of the used Model S will get the car out to a wider audience. Once more people see/experience this product more people will want them.

  • Report this Comment On April 14, 2013, at 3:13 PM, ckshag wrote:

    watch tesla in the is going to show the world how to innovate and produce efficient automobiles.the indian tesla moters have shown already that top rate engineering is a plus ,and tesla just might put a lot car companies to shame as far as short term innovation

  • Report this Comment On April 14, 2013, at 3:43 PM, jswap1 wrote:

    $10k gubment tax credit = welfare for the rich.

    gotta love it

  • Report this Comment On April 14, 2013, at 4:43 PM, luckyagain wrote:

    iswap1 - of course it is welfare for the rich, ask Romney about carry interest on his paycheck from Bain. The tax laws are always twisted to benefit the rich. Such is life.

  • Report this Comment On April 14, 2013, at 5:31 PM, greyhound44 wrote:

    My 2002 Subaru 5 spd WRX Spt Wagon was purchased new in early June 2001 for US$500. off MSRP and has 37,400 mi on the odo.

    Electricity is far more expensive than premium fuel here.

    ret expat MD

  • Report this Comment On April 14, 2013, at 6:48 PM, raj2014 wrote:

    @mickrussom: Building a low cost car for the everyday consumer is Musk's goal with Tesla. However, it's difficult to just put a car out there with new technology that is cheap. Developing new technology is NOT cheap. Example: The first CD audio player cost $900, but now they can be bough t for ~$10. Only the rich could afford them, but the money put in allowed for Sony to be able to decrease costs by improving on the technology to make them.

    I believe Tesla's top of the line sold for 100,000, but now their price is down to 87,000 for their top of the line model, and 62,000 for its little brother (less sports performance). The model X is slated for delivery in 2014. I'd say from pictures its a crossover family vehicle with a third row. No word on price yet, but I'd bet it's lower than the S because it doesn't put as much effort into performance. Musk also confirmed that 3-4 years after the X arrives Tesla is looking to release an electric sedan in $30,000 price range. Again, Tesla WANTS to offer a car at an affordable price at every type of car sold: luxury, sedan, and family vehicle.

    As to your point on "stealing" taxpayer money, Tesla announced its first profitable quarter recently, as well as plans to pay back the government loan early. Sounds like a good investment financially, and it will help get drivers off oil.

    My point it that starting up a business is tough and slow, and developing a new technology is even tougher. Get off their backs, because in 5 years, we could be seeing $30,000 cars being sold that don't even require gas costs.

    Also, its good for the economy as well. There are new jobs at Tesla factories and increased competition among energy produces due to this new source. Lack of oil isn't the reason American oil prices rise. Our oil sells for cheaper than Saudi oil. China would prefer to buy from us rather than the Saudis, so our prices are raised enough to keep the business of the Chinese and maximize profits for Exxon, Shell, and the rest. Decreasing the need for oil in the US leads to decreased oil prices in the US, resulting in decreased oil prices worldwide in order for others to compete with our exports.

    Tesla is expected to increase production at its factory in California for the coming soon Model X, meaning more jobs. Comparing Tesla to Nissan (electric Leaf = 76 mile range), Chevy (hybrid Volt electric range = 39 miles), and other automakers out there, Tesla has the best product and will lead the field. That means jobs in the US. Innovation takes time.

    The company's well on its way to paying back the loan, creating jobs that will last in the US due to its superior product and declining prices, and developing a new technology that can compete, is better for the environment, and lowers our need for oil.

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