Tesla Motors Inc (NASDAQ:TSLA) stock has been on a roll over the past year. The stock surged from just $25 to over $100. The analysts at this price point are recommending that the stock should be bought knowing the fact that the company has never made a net profit.
Tesla Outperforming Rivals
The electric car maker is moving ahead of companies like General Motors Company (NYSE:GM), Nissan Motor Co., Ltd. (OTCMKTS:NSANY) (TYO:7201) and Ford Motor Company (NYSE:F), which undoubtedly holds a greater amount of money, engineer’s industry experience as well as resources. Tesla Motors Inc (NASDAQ:TSLA) is still outperforming all these big names when it comes to confidence of buyers.
Tesla’s Model S held the number one spot in electric car sales despite the fact that Model S is priced at $70,000, which is double more than the price of the rivals. So, how is Tesla managing to outperform bigger and more experienced rivals? The answer is discussed in a report from Forbes by Adam Hartung.
The department of Energy sanctioned loans to Ford ($5.9 billion), Nissan ($1.4 billion), Fiskar ($529 million) and Tesla Motors Inc (NASDAQ:TSLA) ($465 million.) during Bush administration. Tesla was the only company to repay its loans, even though Republican Presidential candidate Mitt Romney quoted Tesla as a “loser”. It even paid the $26 million early payment penalty.
What makes Tesla special?
Tesla Motors Inc (NASDAQ:TSLA) is a startup company and the rivals are huge compared to Tesla, in every aspect. Tesla has considerable backlog over the past year when other auto companies were offering great discounts to sell their vehicles. Bob Lutz, an Industry executive said, at that time, that to consider Tesla as the industry changer will be a foolish thing. According to his version, Tesla would make a momentary impact and will collapse in the long run.
Big automobile manufacturers do not give much importance to the electric cars. They are focused towards their main business, which is enhancing petroleum powered car business, even when Tesla sold more units than Nissan Leaf and Chevy Volt.
Tesla Motors Inc (NASDAQ:TSLA) kept away from making any efforts to transform gasoline car in to an electric car like Ford Focus Electric. Tesla used the electricity to power its cars. Not paying attention to the negative vibes that big car companies are generating, Tesla is focused in making a better car and removing the limitations if any.
The major automobile companies are not paying attention to electric car instead they keep on trying to revive their core business even if it is seeing declining profits. The startup companies like Tesla Motors Inc (NASDAQ:TSLA) keep on removing limitations gradually and improve the small segment.
There can be a shift in the market anytime and the big companies which are called “old Guard” may come in too late to adapt changes, and in turn may suffer from lack of product and market knowledge.