Tesla: We Want Profits Like Porsche's

How much money can Tesla Motors (NASDAQ: TSLA  ) make? For investors looking at the stock, that's the question. Given Tesla's sky-high stock price, anyone buying now needs to be convinced that the company can and will generate big profits in coming years.

Tesla CEO Elon Musk said last week that, in time, Tesla's profit margins could be comparable to iconic German sports-car maker Porsche's, long among the best in the business. In this video, Fool.com contributor John Rosevear explains what Musk was getting at -- and looks at what Musk will have to do to get Tesla to Porsche-like levels of profitability.

Tesla's plan to disrupt the global auto business has yielded spectacular results. But giant competitors are already moving to disrupt Tesla. Will the company be able to fend them off? The Motley Fool answers this question and more in our most in-depth Tesla research available. Get instant access by clicking here now.


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  • Report this Comment On June 12, 2013, at 8:27 PM, DiegoJer wrote:

    Great commentary. I'm long on Tesla, but in the short term, may be in for some choppy waters.

  • Report this Comment On June 13, 2013, at 12:03 AM, Connelky wrote:

    I agree, long tesla, but could be very bumpy until then. I would back off until they get closer to the release of gen 3, and see what kind of competition is around at that point.

    It is looking like tesla is going to beat the big guys to the punch though. 2016 is not all that far off and a fresh design for the big car companies usually takes 5 or 6 years. And as we have seen, the larger companies are having a surprisingly hard time designing electric cars well, particularly the battery pack, and tesla already has that in the bag.

  • Report this Comment On June 13, 2013, at 5:59 AM, TMFMarlowe wrote:

    @Connelky: A fresh design for a major automaker is typically 28-36 months from approved idea to first car shipped if everything goes right. It might or might not take longer with a BEV, depending on the automaker's confidence/skill with the battery-management tech, which is the "special sauce" that Tesla has done so well with. And don't discount the possibility that one or more big automakers have a design and engineering work more or less done and waiting on the virtual shelf for the green light, which could cut a year or more off that timetable.

    But the question is, when will they start actually doing it, if they haven't already? I think there's a lot of watching/waiting/hoping for better battery tech going on with the big guys while they kind of inch forward with plug-in hybrids and "range extenders" and whatnot. That work is valuable -- Ford for instance is doing their R&D work on battery management more or less in plain sight, with their plug-in hybrids -- but it's not what Tesla is doing.

    Nissan/Infiniti had a promising-sounding BEV luxury car under development that was originally due next year, but that just got postponed for business-priority reasons. If there's another Model S-like car under development at a big automaker, the industry rumor mill has been extremely quiet about it.

    I dunno. For now, I stick with my original assessment, which is that if Tesla's experience proves that there's sustainable demand for premium electric cars, at least some of the big automakers will enter the market, and probably fairly quickly. With Nissan/Infiniti focused elsewhere for the moment, my money would be on VW/Audi and GM, if I had to bet. But we'll see.

    Thanks for watching.

    John Rosevear

  • Report this Comment On June 13, 2013, at 8:19 PM, crikescrikes wrote:

    @ TMFMarlowe: Wouldn’t you agree that some of the big automakers (Daimler and Toyota) ALREADY entered the market by partnering with Tesla?

    With many of the top automakers somehow united, I believe that exponential growth for Tesla’s products is just a decade or so away.

    What will happen if China seals a deal with Tesla to ramp up production of EV's -- due to political pressure to reduce pollution?

    http://www.forbes.com/sites/kenrapoza/2013/06/02/china-wants...

    According to http://www.1reservoir.com/awow-8

    Daimler AG holds 20% shares of Eicher Motor, 10% of of Kamzan and Tesla Motors, 6.75% of of Tata Motors and

    3.1% in Renault Nissan Alliance

    Renault hold 44.3% Shares of Nissan and Nissan holds 15% of Renault while there

    alliance hold 3.1% shares of Daimler

    Toyota Holds 51% Shares off Daihatsu

    crikescrikes

    Long TSLA

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