Tesla Motors Inc (NASDAQ:TSLA) and SolarCity Corp (NASDAQ:SCTY) are the two stocks that did surprisingly well last year, and are continuing the trend this year, as well. Not many investors and market watchers would have considered investing in these two stocks six months ago, stocks that were largely dependent upon the subsidies and tax breaks of the government.

Tesla Motors

Both stocks proved anti investors wrong

Both Tesla Motors Inc (NASDAQ:TSLA) and SolarCity Corp (NASDAQ:SCTY) were the most shorted stock, which reflected that there were a chunk of investors who believed that the shares would tend to come down, and thus around 30% to 40% of the total stock float was in a short position, says a report from Dallasnews by Will Deener.

However, the stocks gave a jitter to investors who shorted the stock when SolarCity gained 314% last fiscal and Tesla surged with 336%. Shorting investors were deep in the red after the stocks’ stellar performance last year. Many investors did not take much interest in SolarCity as the company belonged to the Solar industry segment, which is highly uncertain and volatile.

SolarCity taking new route

Generally, Solar stocks soar when the electricity prices are high, and governments in the United States, Europe and China provide heavy subsidies to the industry. Few years ago, SolarCity Corp (NASDAQ:SCTY) and other solar panel manufacturers took a dip due to intense competition that brought down the prices of the panels and lowered profit margins. Chinese solar panel manufacturers were the major reason behind the decline of these stocks as they started offering solar panels made at low cost or even at a loss, and pushed them into the US market. Since 2010, the prices of solar panels have declined from $1.81 per watt to about 70 cents per watt.

However, SolarCity differentiated itself from other manufacturers by adopting the operating lease model. Thus, the low cost panels were used by the company in its favor as the offer was an alternative for those, who cannot afford the down payment costs of the panel.

Tesla a superb car

The electronic vehicle manufacturer Tesla Motors Inc (NASDAQ:TSLA) is looking at increased demand, which is outstripping its supply. According to a report from Forbes, by 2016 the entry price of Tesla’s Model S will be near to $35,000 with a 200-mile driving range. Also, the company is building around 200 charger stations along the major routes.

In October, Tesla got into a spot of trouble after a string of Model S fire incidents. Additionally, the company is facing the protest of state auto dealer associations, who are trying to pass anti-Tesla laws making it difficult to buy cars. However, according to analysts Tesla Motors Inc (NASDAQ:TSLA) is a superb car with driving comfort and a lot of innovative features.