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Published on May 30th, 2013 | by Zachary Shahan

17

Tesla Now Worth 25% Of GM, But Just Wait a Few Hours….

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May 30th, 2013 by Zachary Shahan
 
Tesla’s stock has been climbing strong, and I’m feeling mighty angry at myself, since I was planning to buy some a couple months ago… but never did. At the moment, Tesla’s stock price is over $104, and the good folks over at Venture Beat have noted that Tesla’s now worth about 25% of GM.

It’s interesting, actually, because Chrysalix President and CEO Wal van Lierop, while interviewed by Future360 TV a couple months ago, said that the US has three and a quarter automotive companies, if you count Tesla as one quarter.

From Venture Beat’s John Koetsier: “So now, with a market cap in excess of $12 billion, Tesla is worth almost a quarter of the venerable General Motors.” Here’s a graph of Tesla’s stock price since March 1:

tesla stock

There are a ton of reasons why Tesla’s stock has been surging. I ran down many of them in my Top 33 EV Stories Of 2013 (So Far) article, so I’ll just repost some of those below. But first, there’s one more big piece of news today. Tesla is holding a press conference later today in which CEO Elon Musk has said he will announce a tripling of Tesla Superchargers. That’s the rumor, at least. The Superchargers, which are solar powered, are free for use by Tesla owners. They charge your car relatively quickly, and their purpose is to make long-distance trips along the East and West Coast (and maybe soon in other regions) relatively easy for a Tesla owner. We’ll keep you posted.



Prior to today, from my Top 33 EV Stories article, these are some of the things that have resulted in Tesla’s stock surge:

6. Tesla Announces One Huge Improvement Or Milestone After Another.

Elon Musk, Tesla’s founder and CEO, seems to be genuinely intent on helping humans and helping humanity. He and the Tesla team have announced that they will cover everything that might happen to a Model S owner’s car… beyond a physical accident or someone blowtorching the battery or “taking it out for shooting practice;” will give owners a fully loaded Model S (probably better than their own) when their car is in the shop; are offering a competitive new leasing option; are guaranteeing the  Model S has the highest resale value of any premium sedan made in volume; have rolled out their European gameplan; have paid back their US government loan 9 years early(!)earned a profit in Q1 2013; and will be offering an affordable electric car about half the cost of the Model S by 2017. A lot of big news for clean car (and awesome car) lovers.

Furthermore, despite no releasing official figures, it seems the Tesla Model S has been leading electric car sales in the US.

tesla-chairman-elon-musk

7. Elon Musk Named 1 Of Time Magazine‘s 100 Most Influential People.

Well, from doing what most people said was impossible with Tesla Motors, to doing what most people said was possible with Space X, to chairing solar industry-leading SolarCity, there’s no doubt Elon deserves props as an extremely influential person in the world today.

Tesla Model S

Courtesy of Tesla Motors

8. Tesla Model S Gets Consumer Reports‘ Top Rating Ever.

Scoring an amazing 99/100, the Tesla Model S won Consumer Reports’ best rating ever, a rating only one other car has ever won. And if charging were simply a little fast, or range a bit longer, Consumer Reports said it would have given the car a 100/100.

It also won the 2013 Green Car of the Year awardthe 2013 Automobile Magazine Car of the Year award, the 2012 Motor Trend Car of the Year award, and a bunch of other awards, natch.

Keep up with all the Tesla news your heart desires here on CleanTechnica.

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About the Author

is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy since 2009. Aside from his work on CleanTechnica and Planetsave, he's the founder and director of Solar Love, EV Obsession, and Bikocity. To connect with Zach on some of your favorite social networks, go to ZacharyShahan.com and click on the relevant buttons.



  • daniel

    There was a time long, long ago when Berkshire Hathaway stock was said to be overvalued when just a smidgen over $10,000/share ……… today it is trading at $171,960/share

    • Bob_Wallace

      “One swallow does not a summer make….”

      Aristotle(384 BCE – 322 BCE)

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  • Matt

    yes going up to fast for there not to be some correction (or at least very likely). And yes wish I had invested all my cash/401k/second mortgage/max credit card on March 1 at $35 and sold 90% of it yesterday at $100. But that old hindsight, she is better than 20/20.

  • J_JamesM

    Isn’t that inflated stock price a bit premature? I mean, I’m a huge fan of Tesla myself, but I fear a bubble. Only people that haven’t been on the stock market long enough claim that something will only keep growing and never go down.

    What happens to Tesla if their stocks crash? What happens to EVs in general?

    • Bob_Wallace

      It’s way too high IMO, and I’m a fan.

      Tesla could turn out to be one of the US ‘big three’. It could become a major world car manufacturer, but it’s not like they have a lock on a unique product.

      It’s as easy to believe that other car companies could jump into the market with EVs which are just as good and force Tesla to the sidelines based on their ability to crank out a lot more product and operate at lower margins. And their brand name. Toyota, Mercedes, BMW – those are names which the world recognizes and respects.

      Being a stock speculator is not a good way to build your net worth. Put your stock investment money into non-managed index funds.

      • grooves12

        Tesla is building its name as the ELECTRIC car maker people recognize and respect.

        The market is still small, but it is growing bigger and bigger every year, and there will be a tipping point in a few years where it will become mainstream and sales will explode. The way the mainstream car manufacturers are only dipping their toes in hybrids and electrics shows they will behind the curve when the transition happens.

        All you have to do is look at what Toyota did with the Prius. They subsidized it for a few years, building it in low volumes. Eventually, the technology and the market met up and sales exploded. To this day nobody else has been able to steal the mindshare and marketshare that goes with it when it comes to hybrids. (And IMO the Prius is a TERRIBLE car that wouldn’t sell if it had a gas engine.)

        Tesla is positioning themselves to do the same thing when it comes to electric vehicles. If they are still THE electric car make when the market shifts, their stock price will be more than justified.

        • Bob_Wallace

          Maybe. But remember, Nissan marketed an EV before Tesla (the Roadster wasn’t exactly something they manufactured). And Nissan is building their own battery plants.

          This is ‘year one’ in the history of modern electric vehicles. Most companies are in the game.

    • http://zacharyshahan.com/ Zachary Shahan

      I was wondering the same, but am a novice.

    • arne-nl

      Expectations.

      Their current profit margin in no way justifies the price. The expected/hoped future of Tesla is priced into stock. With a 3 or 4 car line-up and 100′s of thousands of sales, Tesla could very well be making a billion dollar profit 5 years from now and start paying dividends. But if you wait 5 years, the price will have climbed much more and your profit will be much lower. So people are taking a risk now, hoping to get a better return on their money in the future.

      Stocks don’t crash without reason.

      It would take another, much worse financial meltdown, or a serious screw-up or some ‘act of God’ for that to happen. Their product is solid, the factory runs smoothly, the customers are happy. They have proven beyond a doubt they can deliver. Batteries are only getting cheaper, and so the margins on the car rise. Carbon taxes may finally be on the horizon in the US. Many people are concerned with climate change. The stars all line up.

      It is a miracle the stock price stayed so low for so long. During the fall of 2012 I decided to invest because it was abundantly clear that
      a) they were succeeding in ramping up mass production and b) the car was a hole-in-one and c) the reservation rate was going up. This information was freely available from the internet forums where owners and reservation holders posted their experiences. It is stunning that the rest of the world ignored that information and only woke up after Elon’s ‘we’re profitable’ tweet.

      • J_JamesM

        I get the logical angle of it, the only problem is that people are not logical. Their behavior cannot be modeled on reason. They may overvalue a stock, then panic and send it crashing back down again.

    • Ronald Brak

      What happens to Tesla if their stocks crash? Technically, nothing. (There’s a reason why going public is a popular way of raising capital.) What happens to EVs in general? Technically, nothing. EVs will be just as a good an idea as they were before. Non-technically speaking, some people would freak out and a lot of not very sensible things would be said and written. But the laws of physics won’t change.

      • J_JamesM

        Certainly, though, a precipitous stock crash/panic could damage them in that it discourages sales and investment.

        • Bob_Wallace

          A price crash would likely need a reason.

          Tesla could screw something up. It looks like the company is being run by some pretty smart folks, but everyone is capable of making a mistake. I’d be really surprised if they made a fatal error.

          “Forces” could do a number on them like what happened the Volt battery fire. Largely a non-issue was taken up as a way to beat on the hippies, IMHO.

          Something similar has happened to Tesla more than once. There was the apparently scripted running out of charge and having to push home. The really crappy NYT piece where the reporter seems to have gone out of his way to have problems. And the one battery “bricking” incident.

          Unless Tesla really screwed things up I can’t see them having more than a short term stock price problem.

          I can see this current price increase becoming a real bubble, popping, and prices dropping below what is a reasonable problem. That’s called a “buying opportunity”.

    • agelbert

      Well, remember how Amazon was under $5 in the 90s? And they don’t have any particular nuts and bolts product like Tesla does. Then look at Google’s history as it doubled over and over again. Is Google ACTUALLY worth more than Tesla in both ideas and product? Tesla is a revolution of innovation that goes FAR beyond the electric vehicle. How so? What do you think is going to happen any and all home internal combustion machine tools like lawn mowers, chain saws, snow blowers, etc. with the advances in battery life Tesla is producing. Consider the effect on ICE emergency power generator sales when an electric version can run longer on a charge AND can be recharged in the field from an EV. This is THE disruptive technology of disruptive technologies heralding the ALL ELECTRIC ECONOMY. Best of all, the 1% are being swayed by the luxury EV so they will begin to champion all things electric through their media connections and simultaneously divest from fossil fuel stocks. This is BIG. Tesla stock, once they start paying dividends, will become a blue chip on the Dow 30 and will boost the Dow.

      Expect other EV makers like the Kandi technologies (KNDI), which is still quite cheap and has just opened a plant in China capable of manufacturing over 100,000 EVs a year initially (and much more later) to do quite well also.

      China gets it. And since they are cash rich and have such a giant consumer market, Big Oil will NOT be able to stop this EV revolution with their USA based oil oligarchy propaganda machine.

      I don’t own Tesla or any other stock. I wish I did. I opened a mock porfolio with Tesla and Solar city

      April 29, 2013. As of today I have over 85% ROI on BOTH of them.
      Sure, there will be some profit taking along the way but I believe the UP trend is your friend here.
      This isn’t about luck; it’s about superior technology replacing inferior, poisonous and polluting technology. Musk is a great surfer riding the biggest wave in history since the industrial revolution called The Solar Revolution. Many others will surf this wave to prosperity COUPLED with biosphere enhancement instead of degradation. Join the Solar Revolution or be left behind. :>)

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