

Tesla shares jumped up to $153 in after-hours trading














Source: The Wall Street Journal

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RE: OK, so what's next?
By purerice on 8/7/2013 10:26:43 PM , Rating: 5
While I am not a naysayer of Tesla, we have to be honest with the numbers.
They still received tens of millions of ZEV credits without which they would have had an operating loss. They still had a total loss for the quarter due to non-recurring items. Last quarter, they had an operating loss and save for non-recurring items would have had a loss overall. It would be irresponsible to leave this out.

The problem Tesla will face is that they are still in the beginning of the introductory phase for new ZEVs. We will ignore the EV-1 and VW's European EVs. ZEVs and P/EVs are still inaccessible to much of the population.

Tesla is now where Apple was with the iPod in 2003. Apple was able to design a product for others to build and carry in inventory and beat out companies that were much stronger at the time such as Microsoft with the Zune. Tesla, currently enjoying 0.1% auto market share in the US, will have to do as Apple did except that Tesla will have to do its own manufacturing and inventory storage while competing against firms that already have capacity and that currently outspend Tesla on R&D by over 20 to 1.

In other terms, I feel deja vu with the AIM alliance and Intel back in the 90s. PowerPC had a headstart over Pentiums, and had a shorter design cycle, but Intel won with sheer force.

Also, Plugin-hybrids may win out in states that get lots of snow. I would hate to be caught in a snowstorm in -5 degree weather with just an electric motor to keep me warm while getting me home. As Tesla does not make ICE vehicles, they may do better for themselves to license some of their technology to companies who will actually buy it, than try to go their own way like Apple did. Elon Musk himself said that they have not had and do not expect significant revenue from licensing.

Tesla expects to sell about 10% more cars/quarter for the next 6 months than the past 6 (10950 vs 9950) and ZEV credits will continue to shrink. Profits will only continue if Tesla can improve operating margins higher than 25%.

Tesla can do it, but as the total market for PEVs is still less than 1% of the overall market, we're still in the top of the first inning.

For those of us who lived through the tech boom, we know that so often the founders of companies, including Elon Musk, rarely survive once a market matures because a different sort of leader becomes necessary. Don't be surprised if within 3 years shareholders will start demanding a new CEO. Then we will see where loyalties lie.

RE: OK, so what's next?
By Samus on 8/8/2013 12:43:24 AM , Rating: 2
I'm fairly certain in a few years Elon will hand the reigns over to Martin Eberhard or JB (who's already the CTO) much like Bill Gates handed his position to Steve Balmer.

Elon Musk doesn't want to run a car company. It's a gateway for him, much like Paypal was his gateway to initial fortune to start Tesla, Solar City, and SpaceX. He has stated numerous times that Tesla is a engineering showcase for battery technology. The developed technology will play a role in space travel, and solar technology from his Solar City venture will maintain those safe and compact cells in space for long duration. SpaceX is the final phase. They have advanced rockets (arguably the most advanced in the world) but before he dies, Elon Musk will likely invent an engine for high speed space travel that uses no solid or liquid fuel, but electricity. ION proof-of-concept has been demonstrated, but like everything, he needs more money. Tesla and SpaceX contracts will generate the engineering revenue necessary to build his next evolutionary product.

RE: OK, so what's next?
By flyingpants1 on 8/8/2013 1:51:00 AM , Rating: 2
That's correct. He's going to sell Tesla Motors so he can concentrate on SpaceX and eventually die on Mars.

