Tesla Motors Inc Will Be Bought But Not Now [REPORT]

Tesla stockBlomst / Pixabay

Very few would argue the fact that Tesla Motors produces the highest-quality electric vehicles anywhere in the world. The firm’s electric cars are not cheap, but they are highly reliable and offer better performance than any other commercially available EV. These facts about Tesla have produced a generation of so-called Tesluvers, and these enthusiasts argue that Tesla will eventually become the next Ford or General Motors. They might be right, but according to Re/code’s Kara Swisher, it’s more likely the EV maker gets bought out in the next few years as the technology matures.

In an interview on CNBC earlier this week, Swisher discusses the the present and future of Tesla, and suggests that Elon Musk’s firm could be bought out by the likes of General Motors or even Apple sometime in the near future.

Tesla up this week on good sales news

Tesla has had a very good week so far. Shares are up almost 10% this week, from around $190 to almost $208. Most of the positive momentum came from Elon Musk announcing on Good Friday that the firm had a record sales quarter, delivering more than 10,000 cars from January through March of this year. Of note, Musk has an extremely ambitious target of selling 55,000 cars in 2015 and ramping up to 500,000 cars a year by 2020.

Tesla faces major challenges

Swisher began the discussion of Tesla by pointing out “It’s still a small car company.” She continued to highlight that the challenges facing an up and coming car company are immense, ranging from developing to reliable suppliers to marketing. That said, Elon Musk and his team have done a great job so far, and there’s no reason to think they will not continue to do so.

Tesla buyout a distinct possibility as mobility moves forward

“I always think this company is going to probably get bought at some point,” Swisher said in the free-flowing three-person CNBC interview. “But Elon [Musk] is really trying to build this into a real thing and it’s very difficult to build a car company in any environment.

“The question is: Will they [the consumers] buy them across the country?” she asked rhetorically. “Can they make these cars less expensive; can it become a more common car versus the very high end, sort of elite, car that it still is no matter how you slice it?”

Swisher went on to pose another query: “The question is will they try to get ahead by using Tesla to do that, or will they “step over” it with their own version of electric cars.”

She also said, “You could see a Google or an Apple buy Tesla if they’re really getting into the car business as they seem to be doing.”

Related to the potential interest of tech companies in Tesla, she moved on to a discussion of mobility, noting: “It’s the next big area in mobility. Remember, the car is the first mobile device.”

Swisher would not be pinned down on a potential price for Tesla; she said that would depend on market share of Musk’s firm at the time.

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55 Comments on "Tesla Motors Inc Will Be Bought But Not Now [REPORT]"

  1. Nope. I recently re-invested in Tesla when the stock took the recent dip. Knowing Tesla as well as I do I knew they had good news soon. So I am doing quite well now that the recent quarterly numbers were released.
    I, just like Tesla, am not against competitors doing great things that are alternatives to gas/diesel engines. For that matter, I am not really against gas/diesel engines either. I just believe that we, as a technological race, can do better. It is time to begin to move beyond burning fossil fuels to power our industry. However I live in this industrial world, so it would be the height of hypocrisy if I did not appreciate what that industry gives me every day.
    I stand by my original statement about HFCV’s though. I am not seeing the advantage that will compel customer’s to want to buy one of them as their personal vehicle. Just being more clean will not cut it except for those few with lots of money willing to spend lots of extra to say they have an HFCV.
    I may have misinterpreted what you wrote. English may not be your primary language and maybe there was something lost in translation. It sure seemed like you were espousing a conspiracy-like theory that I took umbrage with. You were definitely saying that I was believing something that I did not.

  2. As I mentioned in my post, I have no problems with dealers. Tesla is not against dealers either. Tesla simply wants to be able to sell their cars the way they want to. They are forced to fight the dealership system because the Dealership Associations are trying to change the laws to prevent Tesla from selling their cars. Dealerships are not specifically against Tesla either except that they are afraid that if Tesla gets away with selling their cars the way they do then their manufacturers will try to copy Tesla.

    My personal experience with dealerships have always been good. I’ve never felt ripped off or mistreated.

    I am against Dealership Associations fighting Tesla just to protect their own interests. They can do the same thing by creating a non-destructive compromise as many states have been forced to do after they have screwed over their citizens. This would also protect the dealerships from all the negative publicity that arrives in the war they created with Tesla.
    Change is never easy.

  3. There is no conspiracy involved in oil and gas supporting Toyota. It makes perfect business sense. A multi-billion dollar worldwide industry is always looking for ways to expand and protect its business. For them to support an alternative to their business that maintains their business model. So I stand by my comment from the Bloomberg article. There is no conspiracy in my statement.
    A Tesla Model S gets 98 MPGe from an official government agency. So your 20 MPGe in your head is absurd. In any realistic well to wheel argument it is clear that an EV is 3 to 4 times more efficient than an equivalent ICE powered vehicle. It is as simple as the fact that gasoline when burned has a lot of energy in it. Only 25% or so of that energy translates to motion in a gas car. An 85 kWh battery pack is equivalent to the energy of 3-ish gallons of gasoline. The Model S will go 250+ miles on 85 kWh. I’m not sure what point you are trying to make other than that.
    And by the way, gasoline uses huge amounts of electricity. Oil refineries used 46 BILLION kWh of electricity last year. So the whole argument about electricity is just completely hypocritical. Hydrogen also needs electricity to be made and compressed. So if you’re going to attack EV’s for using electricity you need to look in the mirror and what you are fighting for first. Because they are using tons of electricity, which is why Elon calls Fuel Cells, Fool Cells. If you are going to use a lot of electricity to make and compress hydrogen then you might as well just put it directly into a battery. From his point of view I understand why he scoffs at them. For me, I am not against them because I have hopes they can be used for other things besides personal transportation. His focus is on cars, trucks, and SUV’s. There are many more things using an ICE besides cars in the world. I’m not seeing battery packs replacing every gas engine in the world. So having HFC’s being used in other ways means the technology has lots of merit. That is my opinion.

  4. I understand operating cash flow and your point. I simply disagree with your conclusions. I’ve given my reasons for disagreeing and you keep pointing out that I don’t understand the basics of accounting. By 2020 we’ll see whether Tesla’s bet will pay off. If the Model 3 is a huge success like the Model S has been then all the naysaying will have been a huge waste of time.
    So we’ll agree to disagree.

  5. You continue to demonstrate you have absolutely no grasp of the concept of OPERATING cash flow. When a company has hundreds of millions of OPERATING cash losses a year (or even per quarter now) that means that you could stop 100% of the spending on anything of a future investment nature and you would still be losing loads of money..

    Please invest just a little bit of time learning these accounting basics.

  6. I think Dealers are an important part of the equation, especially for safety. Most dealerships are privately owned, so when automobile safety concerns arise, dealerships provide a separate entity that can make its own judgments. Dealerships in many cases establish personal relationships with clients and as a result will care a lot about the well being of its customers. On the other hand, a corporation that bypasses the dealers is in a very good position to cover up certain dangerous issues, especially if these cannot be detected in the automobile insurance claims statistics. A perfect example of this is TESLA.
    Cadillac on the other hand has to go through its dealers to sell cars so when its customers raise concerns the dealerships listen, again, due to the personal relationships that are established. Now does anyone here believe that half of Cadillac dealerships refused to sell the ELR because they could not pony up the $25K for additional service equipment and training?
    I would also like to add that my experience with Cadillac service has been very good. In fact one of the perks of owning a Cadillac or a PORSCHE is the very positive experience at the dealership.

  7. Triple. Investing is a risk. Tesla is a risky investment I admit. It is a new growing company which I’ve pointed out. If someone isn’t willing to take on the risk then they should be investing in other companies.
    So what? There are thousands of companies out there with a negative cash flow. That is not new. The question is whether there is evidence they are spending their money on things that will lead to profit in the future. Tesla has that in spades which is why there are tons of people and financial institutions throwing money at them. That is also why the stock is sky high.
    Your first point was that NOBODY wants that yet the high stock price refutes that statement – period. That is as factual as it gets. It is specifically $210.97 right now. People obviously are betting that Tesla succeeds in spite of your shouting about it.
    Back in 2012, just before the end of the year people were saying the exact same thing you are saying right now. Tesla is still doing fine 2 1/2 years later. The car is still considered one of the very best in the world. You are part of a vast wasteland of naysayers.

  8. I still don’t see why Tesla should, would, or even looks like it will be up for sale. These so-called experts are looking at things from a microscope instead of seeing the bigger picture. Tesla Motors is part of a much bigger picture and certainly not part of a single industry acquisition. Maybe we need industry experts 2.0 instead of old school thinking. Sorry, but we get this rehashed stuff much too often to pay attention to it anymore. Tesla doesn’t look like it is for sale, nor will it be for the short term future. They are missing the migger picture.

  9. HELL o Grendal,

    I think you response and the tone of it speaks volumes. Did you get fired recently or something?

  10. You have no idea what you are talking about. Go to school and learn the difference between OPERATING cash flow and INVESTING cash flow. Then you won’t make such unsupportable statements.

    Here, let me help. The future investments are accounted under INVESTING cash flow. OPERATING cash flow is what it take just to get a car out the door without respect to gigafactory, sales offices, superchargers and anything else you might want to call “an investment in the future”

    They are HUGELY cash flow NEGATIVE, just on the operations alone. The only cash flow that has been positive is FINANCING cash flow — i.e. using OTHER PEOPLE’S MONEY.

  11. Never thought there was a conspiracy? Really? Lets look back at the Bloomberg Article from last December: Why Elon Musk’s Batteries Scare the Hell out of the Electric Company….your response to my blog about TOYOTA abandoning the battery powered EV was, and I quote: “Toyota is going that way because they get support from oil and gas which supplies the hydrogen.”

    By the way, Japan’s stake in the battery markets is huge (they supply the TESLA batteries ..more good news for everyone here that thinks TESLAs are 100% US made), so Toyota should be almost forced into the battery EV business by Japan..in fact Toyota would need to have one helluva reason to say no…and they have one….but you just call it crazy talk.

    So no comment on the 20 MPG TESLA? No comment on the fact that we still get most of our electricity from fossil fueled power plants that are, on average, about 36% efficient (a lot less efficient than modern diesel truck engines). No comment on the fact that the MPGe rating on EVs relates only to the efficiency of powering the wheels from the energy stored in the battery, and does not reflect on all the losses that take place in order to get the e-juice into the battery, including the typical 64% loss at the power plant? Even the charger is another 12% loss based on what WeaponZero told us. Should we have that conversation again?

  12. What are you commenting on? I don’t give a crap about big oil and have never thought there was a conspiracy.
    Toyota is making a bet that HFCV’s will be a long term bigger success than battery electrics. This is a very long term bet for them. Lucky for them that even if the technology isn’t successful in the personal transportation market that it can work with other forms of transportation. Toyota receives lots of support for HFCV’s including oil companies but that is because Toyota is a massively large company that makes governments and other businesses money. The Japanese government is building something like 50 hydrogen stations around Japan. The same government is also subsidizing the purchase/lease of Toyota’s HFCV vehicle so that the early cars will almost be free in Japan. That is simply because Japanese government and Japanese big business are even more linked than here in the USA.
    The rest of your wacky conspiracy laden rant is mostly useless drivel. The reasoning is not logical or makes much sense. It’s pretty much crazy talk. If I were to guess you should probably go see your doctor and get your medications adjusted.

  13. Have you looked at the Supercharger map and seen the expansion happening? Obviously not. A huge expenditure that Tesla is willing to take. They can stop that at any time. The massive expense would go away. The Model X will be out in a few months. Tesla has spent a huge amount of money to finalize the design, expand production, and be prepared to start production on a car that has 20,000+ people waiting to buy it. Tesla will not be slowing production of the Model S when production begins on the Model X. The battery gigafactory is in full construction to get ready for production by the end of next year. That is a $5 billion expenditure.
    All of that is clear evidence that Tesla is not slowing their expansion but increasing it as necessary exactly as I commented. I am sure that Elon and upper Tesla management can read their own books and they are not worried. I am 100% certain that they do not intend to sink the company and there are lots of things they could do to increase profits and yet they are not doing them. That means, logically, that they are aware of what is going on.
    I’m sure you were amongst the people that was saying that demand for the Model S was gone last quarter. So many were screaming that the sky was falling and Tesla was DOOMED. That was you, right? Tesla said they were fine and there was plenty of demand. This quarters numbers came out and who was right about their own company? That’s right -Tesla. Tesla is now saying their finances are fine and are you now agreeing with them? Nope. I’ll take the company informed opinion over your opinion. They haven’t been wrong.

  14. Really Grendal? Last time we had a conversation about this you insisted that the only reason TOYOTA has completely abandoned the battery powered EV in favor of the fool cell is because big evil oil has paid off TOYOTA to do so. Now you have a different opinion? Well, my belief as to why TOYOTA has disassociated itself from from the battery powered EV is the same as it has always been, and to date no one has been able to disprove it. Funny how a well educated and scientific fellow like you refuses to use logic in evaluating the few possible reasons why the top automobile company in the world with the smartest engineers is scared to touch the battery powered EV, and I placed the one and only possible reason and the proof right in front of you.

    I mean, can you imagine a TESLA competitor with the styling and interior designed and build by LEXUS? Or better yet, a TESLA fighter with the utmost in luxury and safety built by DAIMLER? By the way, DAIMLER just joined the TOYOTA and PORSCHE club according to Mr. Zetsche, and I quote: “We will certainly not build a TESLA fighter”. I also want to thank PORSCHE for believing in me (the PORSCHE center in Atlanta is fantastic). You see, unlike DAIMLER that has real user health data for vehicles like the TESLA, PORSCHE does not.

    Now, should I explain to all these nice folks how the TESLA is really a 20 MPG beast that is fueled by an elixir of mostly Coal and other fossil fuels, on average? Today’s battery powered EV should not be labeled as good for environment. But then you’re going to say….what about the future…we need these TESLAs today for design evolution to take place…….but you already know my answer to that….SUPERCONDUCTORS will make all this technology obsolete so all this experimentation on people and environmental damage from batteries is a waste….but don’t worry..the good news is that 99.9% of our Universe (please confirm, I could be off slightly but I think you get the point) is made up of Hydrogen so perhaps those fool cell folks at TOYOTA who are paid off by Big Oil to produce FCVs are on to something.

    And one last thing….there is only one reason why Mr. Musk keeps saying how TESLA will be even bigger than APPLE….and this is to be able to threaten folks with lawsuits should any corporations or even local governments try to play a more active role in questioning the need for all this very unethical experimentation.

  15. Everett Trostorff | Apr 10, 2015, 10:35 am at 10:35 am |

    Trying to hold hydrogen for any length of time is a fools errand. The fuel cell itself is great but…. Any hydrogen tank is basically a sieve from the point of view of the hydrogen. There is a reason most rockets are moving away from hydrogen as fuel even though it has one of highest energy densities.

  16. The strategy of the company stated since 2006 is for each car line to fund the expansion of the next. That is absolutely not happening. Learn how to read a financial statement. Learn what OPERATING cash flow means. Then you will be in a position to speak more intelligently on this subject.

  17. Everett Trostorff | Apr 10, 2015, 10:28 am at 10:28 am |

    This article requires an edit. Tesla did not SELL 10000 cars they DELIVERED 10000 cars. The actual preorder SALE of vehicles was far higher.

  18. It may prove more difficult to buy Tesla than some analysts believe. Elon Musk, CEO & largest stockholder, with over 1,000,000 shares has repeatedly said, “first in, last out”. Many other investors are convinced of a decade of strong growth ahead & would demand a very high premium for their holdings. Elon is the single most valuable asset of the company. If he were forced out due to a hostile takeover, the value of the company would take a major hit. So, if Google or Apple wants to use some of their cash to put Tesla to work for them & Tesla is going to have enormous expansion expenses over the next several years, wouldn’t it make more sense for a Google or Apple to either fund some of the expansion or partner with Tesla on specific projects like the Gigafactory?

  19. Matt Wallington | Apr 10, 2015, 3:38 am at 3:38 am |

    Naive is thinking Elon gives a damn about cars 5 years from now. What he’s doing with the gigafactory is way more important than cars. He will not buy GM. First, in 5 years even Elon won’t be in a position to do that but second, he won’t want to. He will be revolutionizing the entire energy industry and making supercapacitors a manufacturing reality which will span across way bigger things than cars. Second, why would he want to run Apple? Elon wants build and invent new things. Not sell more iPhones.

  20. I don’t know what makes me click on these coo-coo articles but the only one buying Tesla is going to be most of the automobile purchasing consumer once the $30,000 version hits.
    Gas stations are the next Blockbuster Video

  21. i agree, plus the wireless chargers for the Tesla and Leaf are so awesome, you don’t plug in drive drive into your drive way and its auto charging. and its only gonna get better, maybe charge as you drive on the freeway.

  22. LOL sure, you seen the leapfrog tech in the new batteries? and Musk will be right on it trust me on that. he is no fool, he started spaceX and solar city he has allot of plans with Tesla

  23. no way Tesla would want GM, that’s like Apple buying, Blackberry lol GM has little future if it cant figure out the electric car. I cant wait until this car is in my price range, i will go from oil and never look back. These new charges now that are wireless are so cool. Cant wait.

  24. You are correct. It’s on order. :-)

  25. I don’t know where you’ve living but, I know you’ve never owned a Tesla.

  26. I sure don’t want anyone touching Tesla now unless they are just a partner and elon stays ceo.

  27. Nobody in their right mind would buy Tesla because it’s not a car company, it’s a TECHNOLOGY company, and Musk has put all their tech patents into the public domain. Musk’s goal with Tesla was not to become wealthy by revolutionizing transportation. It wasn’t to build the world’s best car. It was to show society that there is a better way to move people around than the antiquated internal combustion engine that powers the majority of cars today. He wants to change the entrenched thinking of Detroit’s big three before we destroy our environment through the burning of fossil fuels.

  28. Interesting that you would say that. You should know that is not the plan that Musk set out with. His plan was EXACTLY the opposite, and he spelled it out in plain English here: http://www.teslamotors.com/blog/secret-tesla-motors-master-plan-just-between-you-and-me

    let me quote “In keeping with a fast growing technology company, all free cash flow is plowed back into R&D to drive down the costs and bring the follow on products to market as fast as possible. When someone buys the Tesla Roadster sports car, they are actually helping pay for development of the low cost family car”

    It is clear that you aren’t familiar with these concepts so let me explain. While it isn’t absolutely necessary to be “profitable” in order to accomplish that strategy, the minimum requirement is that CASH FLOW FROM OPERATIONS be positive. In fact, for each of the last 4 quarters, cash flow from operations has become increasingly degraded and is not negative to the tune of a half billion a year annualized. The disastrous trend undoubtedly continued in 1Q15 and will continue in 2Q15. What that means is that each car they make, not only doesn’t help fund “investments” — it does even cover the OPERATIONS cost of building that vehicle.

    They are only in business now because of the $2 BN they raised last your on the false premise of building the so-called “gigafactory”. But they actually have spent only about $50 million on the factory construction and have consumed nearly half of that $2Bn with their ongoing OPERATIONAL losses. So now they need another $2Bn just to keep the doors open, and that won’t include much to fund the factory construction. And they still have huge bond obligations that will never hit their conversion targets, so they will have to raise money (or issue more stock) to cover that.

    This is why nobody is going to buy them out at anything like the current share price.

  29. Tesla is focused on expanding and growing their business. That means they spend a lot of money since they are growing at an enormous rate. They could do it slowly and focus on their bottom line by maximizing profits. Tesla is not interested in doing that. They are out to create a mass market compelling electric vehicle that millions of people will want to own. That car will be equal to or superior to a similarly priced gas car. More likely it will be superior to, in most ways, the equivalent gas car just like the Model S is to a similar priced gas car. Tesla will spend as much as necessary to get that done. That is the goal of the company which they have stated publically since 2008.

    So you can point at the bottom line as much as you want. Tesla isn’t trying to impress you with large profits. As long as they aren’t losing too much achieving their goals then they are on track. Profit will come when they get hundreds of thousands of Model 3’s on the road. Even then I expect them to start on their next battery gigafactory to power their next car after the Model 3.

  30. I wish everyone would be as critical about general motors car sales quarterly numbers. They have a great shell game going with how they report. what a sale is or is not. You might as well drive your Tesla off a cliff if they get bought out. The car will be worth half or less than half of what you paid for it.

  31. Matt, you are naive and so is Swisher.

    In 5 years Tesla might buy GM,
    not vice versa. Apple might be headed up by Musk and not CooK. More likely than Musk selling. Use common sense here and foresight.

  32. “The only way they reach $25”

    Or if they continue to lose money at an increasingly prodigious rate every quarter, as they have the past 4 quarters, demonstrating they have no viable business model. Yes, other than that, they are doing great.

    Other than that, Mrs. Lincoln, how did you enjoy the play?

  33. You know, we have to have at least 5 Tesla articles every single day. This just shows how effective Elon Musk is.

  34. @grendal – I appreciate your thoughts. The Bolt might be closer to production then the Model 3 but as you said, until they’re on the street they’re both imaginary cars … we can’t drive ideas. I look forward to the time when all of us will drive behind clean, efficient and quiet electric motors. Whatever happens with Tesla, I must tip my cap to them for changing people’s thinking about EV’s. While I’m not a big supporter of drag racing I think the P85D showed people that EV’s can be powerful and capable, although I would like to see 500 miles of range. That would be yet another step to ending peoples worries about range anxiety. Unfortunately, many people like the convenience of ICE’s but 500 miles and being affordable may perhaps begin a slow transition.

    Sadly, ICE’s will dominate for many decades. Many millions bought ICE cars in 2014 and millions more are buying them this year. Each one of those cars will be expected to provide “12.3” years of reliable service. I think in the distant future ICE cars might just be legislated off the road … perhaps beginning in major metropolitan areas. There will be plenty of time for the green boys to make their moves. Infrastructure for FCV’s, or better long range batteries for BEV’s. I heard comments from the chairman of Toyota who said they are not in any sort of a race. Their MO has always been long, slow, measured approaches. They guessed correctly with the Prius that just set a milestone for some millions of world wide sales. Who knows if they made a good decision this time.

    It is possible something will surface that surprises all of us. I sure don’t know. The next 3 or 4 years might provide a few answers but beyond that all I can do is guess. It is sort of exciting.

  35. Matt Wallington | Apr 9, 2015, 8:25 pm at 8:25 pm |

    He will probably sell the vehicle division of Tesla to a major manufacturer once he has confirmed that electric cars are going to take off. In the meantime, Tesla is transforming into an energy R&D company which will have a much bigger and more lasting impact on the world. That part he probably will hold on to.

  36. I never said FCV will not exist. It’s just not for me. As far as the long wait at that one supercharger location, that can EASILY be fixed by expanding charging locations. Not a big deal. Of course there are advantages to FCV. But not enough in my opinion.

  37. It gives them something to do and they are all about creating controversy, even when there isn’t any.

  38. Have analysts and reporters ever read Tesla’s goal or listened to anything Elon has stated on the topic? He has very clearly stated that Tesla is not for sale until after the Model 3 has been produced and is mass market, which is 5-10 years away. It’s not about money for him, he has plenty of it, its about accelerating the advent of sustainable transport through electric cars.
    When will analysts and reporters start reporting on the facts rather than creating false rumours… ?

  39. Thanks for the reply. Again you make some good points. Also, we do agree that people will vote with their dollars.
    Dealers will certainly not pass up the opportunity to make a sale. I have no issues with dealers either. However a salesperson will focus on selling what they know. When given a choice between an EV and a traditional car a salesperson will more likely sell the traditional gas car rather than point out the strengths of an EV over a gas car. The forums are ripe with stories about that happening regularly. Hopefully that changes in the future but it is a problem right now. It is new technology and it will be a slow transition into the future. For now it is the expensive early adopter phase. Tesla, GM, BMW, and Nissan are at the forefront of BEV sales.
    CAFE is about getting more mileage. ZEV credits are about having a quota for making ZEVs. The two are very different but there is some crossover since a ZEV creates more mileage for your fleet. ZEV credits are all about a manufacturer making their quota. HFCV’s will skew the numbers dramatically since they get an enormous amount of credits.
    I like the Bolt a lot and hope that it is a great EV. I doubt it will be competitive with the Model 3 for a number of reasons. I picture it as a Leaf with twice the range. When they both hit the roads then we can make real comparisons. Until then, it is hard to compare imaginary cars with promised specifications. I’ll leave it with: we’ll see and I wish them both luck. There should also be a Leaf with twice the range of the current model.
    I can say with assurance that Tesla will make the Model 3 the best car they possibly can. We’ll see if they pull off their promises. I know they will try very hard to do so.

  40. @sowhat – Toyota is a vast and powerful company with a lot of smart people working there. Something made them go “all in” with fuel cells. Here are some facts: 11 lbs of hydrogen in a 95lb. “fuel tank” can carry the Toyota FCV over 300 miles. In comparison, the Tesla 85D must lug around a 1,200 lb. battery to even approach that kind of range. Energy density of hydrogen is 5.6 MJ/L, Li-ion is .9 -2.1 MJ/L. Fuel cell systems are immune to cold down to -31C. At 0 degrees a Li-Ion battery can loose half its range. BEV’s also do not hold up at high Interstate speeds or with heavy use of accessories.

    A fuel cell car is still an EV. It uses the same efficient, clean electric motors. The California CCSE study predicts fuel cell cars will become the mainstream car of choice in 25 years. One of the reasons is they already approach the capability of the cars we drive now except they only emit water from the exhaust. They also project that much hydrogen can be produced at clean facilities and piped through existing natural gas lines to substations where it can be trucked to smaller gas stations. Europe is already underway with hydrogen. Even London’s Saines supermarket chain has public “hydrogen dispensers.”

    The fast refill of a FCV can be important. One person arrived at the Folsom CA supercharger station with 9 miles of range. There were five stalls. One was INOP, the others were occupied. Unfortunately, those persons went shopping. A 30 minute charge turned into a 1 hour and 40 minutes wait.

    I sure don’t know what the future holds. But I wouldn’t dismiss fuel cell cars too easily. They do have some advantages.

  41. Really? Please explain why a customer will bother to buy an HFCV?
    Here is what I see:
    You can’t even buy a car even if you wanted to.
    The technology is still experimental and expensive which is why manufacturers are only interested in leasing them to customers.
    Where do you refill the thing once you buy it? There are very very few stations around the world.
    Where is the savings? The car is three times more expensive than a gas car or hybrid. The fuel is just as expensive as gasoline. More expensive right now.
    What do you gain over buying a gas car? The only advantage is that it can be cleaner. It isn’t cleaner yet but it can be in the future.
    But you are casually saying they will absolutely be the vehicle that everyone will be driving. It’s your statement, so back it up…

  42. Did Musk really make that statement? I’m hoping so but I have not seen it anywhere.

  43. Well…I don’t see the benefit of a fuel cell over an EV. They are more complicated, you still need fueling stations, more parts to fail, usually bad performance, less room, no infrastructure, etc. Nope…I just don’t see a FCV doing better than an EV. I know I will never buy a FCV.

  44. fishin_in_the_muck | Apr 9, 2015, 6:04 pm at 6:04 pm |

    If someone buys Tesla they’ll be buying something soon to be leap-frogged. Fuel cell will happen before any profits are realized from their colossal mistake. It will cripple the buyer.

  45. @grendal – I do see your point about some ICE salespersons. Still, if someone is intent on buying a Volt, they likely did much of their homework online. Then the dealership is merely a place where they can view the car close up as well as take a test drive. I doubt any dealer would pass up the opportunity to sell a car.

    I think we might agree people vote with their dollars. Thus far, millions are voting for ICE’s …. 1,000’s for BEV’s. At least for the present time, BEV’s are not going to lure too many away from ICE’s. They’re not worried about Tesla. Only 1/2 of 1% of the US population can afford one anyway. I know I cannot.

    What the big ICE builders are worried about is that big government legislation is standing in the shadows. CAFE laws require that ALL car builders selling cars in the US must demonstrate a fleet average of 38 miles per gallon by 2016. That’s a daunting task. Now, they can pay enormous fines or pay Tesla for ZEV credits in California, but the most expedient way to deal with CAFE legislation is to build electric cars themselves. Their hand was forced. GM has experience with EV’s. Their EV1 was a marvel with a range of 100 miles from old Nickel Metal Hydride batteries. They know how to build a BEV and already introduced a working mock-up of their Bolt.

    As with many, you make large presumptions about the Model 3. Neither you or I have even seen a picture of one. No one has ever seen performance figures, prices or any factual information. You presume Model 3 owners, if it reaches production, will use the supercharger network for free? As you know, 60kW S owners were not entitled to use the network unless they paid a $2,000 premium … $2500 after delivery. A number of articles I read suggested the Model 3 would not have free use either. How could they if Tesla is fighting to survive and choose to keep the price competitive with their competition? Additionally, one of my friends has an 85D in Chicago. He reports on bitter winter days, he can lose as much as 50% of his range with continuous operation of his HVAC system … which he does use 100%. Others on Tesla’s own forum report the same. His S still has enough range to get him where he wants to go. How far do you think a BEV with an estimated 200 miles of range will get on a bitter winter day if they’re traveling across the country in winter? Cruising at 70 – 75 MPH on a very cold day while using the HVAC will not even get them from one 170 mile supercharger location to the next. The next generation BEV’s might serve persons wishing to travel from Temecula, California to Redondo Beach and back. It will be a very good step for persons in large metropolitan areas where 80 miles doesn’t inspire much confidence.

  46. *buy* not bay
    You understood everything, it’s obvious.

  47. The main oversight I continue to see by Analysts everywhere, is that Tesla’s goals don’t mirror traditional old money car companies. Any attempt to overlay projected growth and analysis of a technology or traditional car company is wrong for this stock. Tesla is open minded, yet cautious, making well thought out strategic moves. They invest a high amount into R&D, that is productive and focused, not wasteful and disconnected like Google. Both Apple and Google have perfected the burn and churn technology models. Those tech companies have found the perfect balance between upgrade cycles, and technology steps to squeeze the most cash realistically possible from customers without resistance. Tesla is completely against burn and churn strategy, AND against the old money strategy too. They are also not developing just cars. They have energy microgrid technologies, which they’ve stated could be 35% or more of their revenue in 5 years(that’s 35% if the Model 3 sells, otherwise, that % could be much larger if they only sell the 2 models they have today). Microgrids have been predicted to become the leading source of energy revenue over the next 20 years. Energy is worth magnitude more than the automotive potential. EV’s just stoke the demand for microgrids.

  48. The funny thing is they will want their technology and their batteries, especially when they own half the world’s batteries to drive the EV revolution. The stock will never go back down to even the $30s. The BofA is the low-baller analyst here and they don’t even think it will go that low.

  49. The price is $75B per Musk. Outrageous and will NEVER be paid for a company that by Elons admission won’t make any profit for another 5 years.
    Maybe $10B is more like the right number; as $150 is generous as a stock valuation; if not the P&D that it is.

  50. Tesla is not interested in selling to anyone.
    The only way they reach $25 is if they really drop the ball with the Model X, the battery gigafactory, and most importantly the Model 3. It is very unlikely they will drop the ball. If they are wildly successful with them, just like they were for the Model S, then their valuation will be worth even more than it is now. As the saying goes, it’s Tesla’s game to lose. Tesla has a history of success.

  51. There are a few flaws in your argument:
    Your point is that a big company could come in and take Tesla’s business away from them. The problem with that is that a major company does not want to create a car that competes with 98% of their gas car business. That is not going to happen. Tesla is out to create the greatest car on the planet that happens to be powered by batteries and electricity. Their competition is every other car out there and they intend to make their car a compelling choice for consumers. The fact they are taking sales from other car makers with their first car is telling. If you go into a GM dealership today you’d find the salesperson trying to talk you into buying a Chevy Cruze over a Chevy Volt. The same is true for Nissan in some cases. There is a conflict of interest there. There is no conflict of interest with Tesla.
    The Volt has one of the highest customer satisfaction ratings. Owners love the car and say it is as good as a BMW 3 series in how it dr5ives. All that sounds great. The problem is that the Volt has lackluster sales numbers. Why? Because GM salespeople are uninterested in selling the car. Why take the effort to explain a car that is hard to explain. The fact that it works great and is appropriate choice for twice as many customers is still just extra work for a salesperson.
    The Bolt sounds great and I hope it is a huge success. It will sell to a different market than the Model 3. The Bolt will be competitive with the Leaf but have twice the range. GM hasn’t created a quick recharging network so there will be little long distance travelling in the car. You will be able to drive the Model 3 across the country – for free. It will less convenient than a gas car, but refueling it for free will compensate for that.
    So you make interesting points but they are just not well thought out.

  52. “With the Model S, you have a compelling car that’s too expensive for most people. And you have the Leaf, which is cheap, but it’s not great. What the world really needs is a great, affordable electric car I’m not going to let anything go, no matter what people offer, until I complete that mission.”

    Elon Musk

  53. Currently Tesla is in a risky position. Essentially they have one product to sell (with variations) that must support a HUGE expense load. Whereas many car builders have a full line up to support the company should one branch stumble, if Tesla’s car as fine as it is, suffers a setback for any reason, it must have a disproportionate effect on the bottom line. Those setbacks are coming; competition from German cars with cache’, trouble in China, leveling of potential customer interest, low gas prices and so forth. They’ve done a splendid job so far but they are one billion dollars in the hole …. a daunting task to climb from for any company … and Mr. Musk said he is going to spend “a staggering amount” of cash in 2015. Their current product is not mainstream. Most of us cannot afford one and Li-Ion technology has limitations to begin. Many people who buy an S are in a completely different class than I am. Many report they don’t really even care about the price of gas and have one or two ICE cars for longer trips. The love the S, they regard it as “very cool,” and use it within its limitations.

    For at least two years I’ve been reading analysts’ thinking that Tesla will need a partner to survive. That might prove to be difficult because it is well known, Mr. Musk rules with an iron fist and that won’t go over too well in other boardrooms.

    Finally, companies like GM, Toyota, Ford or Nissan are vast and powerful marketing companies. GM has dealers and visibility in almost every town of substance. Even after cutting a number of dealerships in 2010, GM still has 4,355. At any time they can press their dealers to buy more cars than Tesla sells in a quarter. GM has already introduced the Bolt and produced a working mock-up. Regarding Tesla’s Model 3? I’ve already read glowing “reports” of its performance, range, price and good looks … YET no one has even seen a picture of one! Tesla will have to play their cards very well.

  54. Incorrect.

  55. Nobody will bay more than about $20/share for the goodwill. Nobody needs their technology, and the operational business (plant, charging stations, stores gigafactory,) is a huge money loser and cash sink. Nobody wants that. The only thing anybody would want is the brand name and they aren’t paying $200 for that.

    Tesla will be bought in a couple of years — when it goes under $25.

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