Monday, August 6, 2012

(Opinion) Tesla Motors: Revenge of the electric car?

On the poster for revenge of the electric car it has the tagline 'its alive’, well, looking at Tesla motors progression since the release, the tagline should be ‘just barely’. In the film, we are given a glimpse behind the scenes of a revolution led by battle hardened money men, rich dewy eyed idealists and small entrepreneurs invested in the future as all parties involved are the quest to make the electric car viable. 

Through the course of the movie we witness the struggles of getting the cars to market with product malfunctions and the price to make the product compared to expected market price being too close for comfort, production and distribution issues and near bankruptcy in all in the name of the electric car. 

At the end of the movie however, it defaults to the standard Hollywood story arc where the protagonists end the story on a high with Tesla motors successfully (I use this word lightly) floating on the stock exchange in a bid to raise capital after production and distribution issues had pushed Tesla Motors' CEO Elon Musks' vast resources to the limit.

However the progression of Tesla Motors since the October release of the film has been worrying to say the least.  The company has not made any profit but suffers tremendous losses with the recent reports of tesla’s losses shooting up to 79% in the second quarter[1]. It has recently has its’ stock fall 3.6 percent with news of a stock analyst downgrading Tesla Motors rating from ‘hold’ to ‘sell’[2].Yet despite the bleak indicators, the company still remains optimistic.

Elon Musk publicly predicted that by 2032, “half of all new cars sold would be plug-in electric cars”,  dwarfing president Obama realistic goal of 1 million by 2015 considering less than 100,000 plug-in cars will be new cars globally in at the end of this year (3) . This prediction seems like the classic ruse entrepreneurs play on themselves to take their mind off the tough times of the present as Steve jobs did it, Ford did it, so Elon Musk taking a page out of their book is to be expected.

Tesla are not alone in its recent woes as it hasn’t been a great year for American carmakers GM, Ford and Chysler in general as their one of its competitors, Toyota managed more second quarter earnings than the big three ‘combined’[4].  However there has been a slight upturn for as tesla’s shares have grown with the news that Tesla will meet its projected production levels  [5].

In sum, Tesla Motors has been victim of the fact that they belong two industries with one in slight decline and one trying to establish it viability despite crushing indicators. Yet despite this, the company remains optimistic with an eye firmly placed far in to the future, which serves as positive sign that everybody at Tesla look set to make it’s CEO right, and more importantly, rich.

[1] D. R. Baker, 2012, Tesla Motors’ Losses Jump 79 percent,
[2] H. Dudar, 2012, Tesla Falls After Analyst Downgrades Rating To Sell,
(3) J. Voelcker, 2012, Elon Musk Bets Half Of All Cars Built In 20312 Will Be Electric,
[5] Bloomberg businessweek, 2012, Tesla shares rise on Model S production numbers,

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