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Tesla Motors Inc – The Positive News Keeps On Coming

It seems as if Tesla Motors can do no wrong, at least not as far as the media is concerned. Of course history tells us that all it takes is a single story (like those fiery wrecks of the Model S a couple years ago) to turn the media against a company, but for now, the skies are clear.

Tesla Motors Inc - The Positive News Keeps On Coming

Elon Musk On Colbert’s Late Show

Tesla CEO Elon Musk appeared on the Late Show with Stephen Colbert on Wednesday night, which was Colbert’s second night as host of the iconic late night talk show. Musk has been a celebrity for years, and of course this helps both Tesla and SolarCity, of which he is chairman, and SpaceX, of which he is also CEO. It seems we just can’t get enough of his public face, which includes plenty of charm and charisma. Analyst Andrea James of Dougherty & Co., a long-time Tesla bull, calls Musk “a major part of the company’s marketing machine.

Musk’s appearance on the Late Show was quite entertaining for those who got to watch. Colbert asked Musk about how to make Mars habitable for the human race, and his answer was… unexpected, to say the least. He said we should nuke the planet, which would warm it up quickly. Colbert called him a “supervillain” for that answer.

Tesla raises capital

In Tesla’s last earnings report, one topic was raising capital, and the automaker has now successfully done so, raising about $738 million by selling shares for $242 apiece. James sees this as a big positive because Wall Street has been concerned about the company’s use of cash. Tesla has been burning through the cash recently, expanding its supercharger network, building its gigafactory, developing the Model 3 and setting up production for the Model X.

James made an interesting point about this latest capital raise, as it frees up working capital to enable Tesla to “streamline” deliveries by region. She noted that Tesla has been seeing high inventory backlog at the end of each quarter because of its delivery process, and by smoothing out the process, it should be able to operate more efficiently.

Model X deliveries starting

Also Musk tweeted recently that they will deliver the first of their Model X crossover vehicles on Sept. 29 at the Fremont factory. James expects Tesla to ramp production on the Model X more quickly than it did on the Model S. Currently those who preordered a Model X are going through the online process to customize their vehicles for production.

Musk also showed off a photo of their second production line being brought online. It features 542 robots with 15 of them operating at the same time at the central assembly point. James visited Tesla’s factory in July and was able to watch the automaker install some of the robots on the ceiling, which is different than how the first production line is constructed.

She said Tesla management explained that the ceiling installations will help maximize the square footage so that the line can build as many cars as possible in the available space. She thinks this is important because it shows that Tesla is forward-thinking in the way it designs its factory production lines.

Oprah buys a Model S

Another big win for Tesla is that talk show diva Oprah Winfrey bought a Model S and has tweeted photos of it. She has been known to drive buying trends in other categories, so it’s possible she will also drive sales of the Model S.

And on the topic of Model S buyers, it seems Tesla is even drawing non-luxury car buyers, according to a post on the Tesla Motors Club.  James compiled some of the responses to the thread in an analysis of anecdotal evidence but learned some interesting statistics.

Toyota Prius owners turning to Tesla

For example, on average, some Tesla buyers paid $37,618 for the car they bought before they purchased their Model S. The price difference between their new Tesla and their previous car was, on average, more than $61,000. She also learned that the car most often replaced by buyers who did not have a luxury car previously was the Toyota Prius—something that makes sense because Tesla’s cars appeal to the broader environmentally-conscious consumer in addition to the luxury car buyer. James put together this graph to show which brands are being replaced by Tesla sedans most often:

tesla

Some Tesla buyers said they paid more for their Model S than they ever thought they would for a car and would only do it for a Tesla. Some actually previously owned Tesla shares and used the money they earned from the appreciation of the automaker’s stock price to pay for their car.

Even though she is so bullish on Tesla, James was surprised at the big price difference between the previous non-luxury car buyer’s last car and their Tesla. Of course this is a big positive, especially as Tesla prepares to start shipping the Model X, which isn’t priced very much over the Model S and thus should have a smaller gap between the price of the Model X and a more average-priced gas guzzling SUV.