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Tesla Model 3: Hit or Hype?

Advance reservations pass 250,000 -- but will they actually translate into sales?

by on Apr.04, 2016

Tesla says the base Model 3 will get 215 miles per charge - and start at $35,000.

Even before the new Model 3 sedan was unveiled late last Thursday, Tesla Motors said it had logged more than 100,000 advanced orders. And as of the following Monday morning, the Silicon Valley carmaker claimed the figure had topped 250,000 – a number that would translate into more than $10 billion in retail sales.

The surge of interest is unprecedented in the auto industry, resembling more the sort of frenzy that has greeted the launch of a new Apple iPhone. But at this early stage, at least 18 months before the first car is scheduled to roll off the assembly line, can the new Tesla Model S be considered a hit, or a case of battery-powered hype?


That’s a question which few industry observers seem to agree upon. Investors have clearly been impressed, driving Tesla’s stock price up by over $15 a share since the hours before the electric sedan’s unveiling. That run-up comes despite the warnings issued by some key analysts.


Bear Market Bites Tesla

Analysts and investors grow skeptical as EV maker prepares 2015 earnings report.

by on Feb.10, 2016

A scene from the new Tesla ad, Serious Wonder, featuring the voice of Nikola Tesla.

Tesla got a much-needed, albeit small bump on Wall Street Tuesday, but shares of the maverick battery-carmaker have been trading near a two-year low ahead of the company’s fourth-quarter earnings announcement.

The stock is down by more than a third since the beginning of the year, a downturn significantly more severe than the bearish turn the overall stock market has been experiencing, and a sign of increased concern by key analysts like Barclay’s Brian Johnson. On Tuesday, he cut his forecast from $180 to just $160 a share.

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There are still a handful of analysts who rate Tesla a “Buy,” and even a “Strong Buy,” but the mood has turned sharply in recent months, Stifel’s James Albertine summing up by cautioning, “We see few catalysts to turn short-term bears bullish.”


Tesla Beats Forecast – Still Loses $75 Mil in Q3

Investors rally despite loss.

by on Nov.03, 2015

The third quarter saw the long-awaited, and long-delayed, launch of the Model X battery SUV.

Tesla Motors managed to beat analysts’ forecasts for the third quarter, but still delivered an adjusted, $75 million loss for the third quarter, or 58 cents a share. Nonetheless, that was two cents better than what was expected, according to S&P Capital, sending Tesla stock up in after-hours trading.

The net loss, using more conventional GAAP procedures, came to $229.9 million for the July to September quarter, or $1.78 a share, compared with a $74.7 million deficit, or 60 cents a share, a year earlier.

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The announcement comes at a critical time for Tesla. The maker just launched its second product line, the Model X battery-electric SUV. And it has begun rolling out its new AutoPilot system which permits semi-autonomous freeway driving. But the maker also took some recent hits from a key consumer group over ongoing reliability problems.


Tesla Stock Sale Exceeds Expectations

Battery-carmaker exceeds expectations by nearly 50%.

by on Aug.21, 2015

Tesla is finally ready to launch the delayed Model X.

Tesla Motors has gotten an even bigger cash cushion than it anticipated. Worried that its cash horde was dwindling due to the unexpectedly high cost of developing the new Model X battery SUV, the California maker had hoped to raise about $500 million through a new stock offering.

But as underwriters wrap up their efforts they have announced that Tesla actually brought in $738.3 million, or nearly 50% more than originally anticipated. That said, the company might have generated even more cash had its stock not taken a bit of a tumble in recent months.

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The secondary stock offering came in the wake of a second-quarter earnings report that revealed the carmaker had only $1.5 billion in cash, a 57% year-over-year decline. It has been burning through cash due to what CEO Elon Musk acknowledged was an unexpectedly “challenging” development program for the long-delayed Model X.


Tesla Deliveries Fall Short as EV Maker Cuts Outlook

But overall loss slightly less than expected.

by on Aug.05, 2015

Despite two price hikes, Tesla saw a jump in Model S orders - but cut its full-year forecast.

Tesla had some mixed news for investors as it revealed its second-quarter results Wednesday afternoon. The maker’s loss was less than anticipated by industry analysts, but the maker fell short of expected vehicle deliveries and cut its forecast for the full year.

The news sent the California battery-carmaker’s shares tumbling in after-hours trading. A critical test in the coming months will be the long-overdue roll-out of the Model X sport-utility vehicle, which Tesla CEO and founder Elon Musk acknowledged was “challenging.”

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“Some things are particularly challenging,” he said during a conference call with media and analysts, “But I think it’s going to be the best vehicle in the world and I think it’s going to blow people away.”


Tesla Plunges Deeper into the Red

China problems take their toll.

by on Feb.12, 2015

Low gas prices have also been taking a bite out Tesla's stock price in recent weeks.

However you count the numbers, it wasn’t a good quarter for Tesla Motors.

The Silicon Valley battery-carmaker has been embroiled in controversy for its use of non-standard accounting practices that, critics say, make its balance sheet look a good bit better than it might with more traditional bookkeeping. But there was no way to perfume Tesla’s weak fourth-quarter performance, when it sank $107.6 million, or 86 cents a share, into the red.

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That was $74.7 million more than it run up in losses during the same period in 2013, in part due to problems selling all the vehicles it produced at the end of the year. The maker did hit its production target of 35,000 vehicles for all of 2014, but ran into trouble finding a home for all those Model S sedans. China was a major part of that problem.


Tesla in the Black for Q3 – Sort Of

Maker’s stock continues to slide.

by on Nov.06, 2013

Production of the Tesla Model S has risen sharply -- as have profit margins on the battery sedan.

By Tesla’s account, the battery-car start-up generated a $16 million profit for the third quarter – but by generally accepted accounting practices, or GAAP, the maker would have plunged $38 million into the red for the July to September period.

And that sent already nervous investors skittering for the exit, Tesla stock quickly plunging by nearly $20, or around 11%, in after-hours trading – continuing the decline that was triggered last month both by two battery fires involving the Model S sedan and by negative analyst reports suggesting Tesla shares have been highly over-rated.

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Nonetheless, Tesla shares have remained more than 400% above where they began 2013, even after sliding from a $194.50 peak in September.

In a letter to shareholders, Tesla indicated it expects fourth-quarter earnings to be “about consistent” with the third quarter, a surprise to analysts who had been anticipating an increase as production and sales of the Model S battery-car continue to grow. Musk indicated Tesla is boosting research and development spending by 25% to ensure it can have the maker’s second electric vehicle, the Model X sport-utility vehicle, ready for its late-2014 launch.


Tesla Fire Gives Chills to Investors

Debris blamed for battery fire that seriously damages Model S.

by on Oct.03, 2013

A video on YouTube showed the fire that consumed the front end of a Model S, apparently after roadway debris damaged the battery pack.

Roadway debris is tentatively catching the blame for a fire that seriously damaged a Tesla Model S being driven in a Seattle suburb – with that news, combined with new concerns about the battery-carmaker’s high-flying stock sending the price of shares plunging by more than 6%.

The fire itself raised serious concerns about the safety of not just the Tesla Model S, but about the use of lithium-ion batteries in general. There have been problems with other vehicles using the technology, while Boeing was forced to ground its new 787 Dreamliner earlier this year because of fires involving the jet’s first-of-its-king lithium battery system.

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According to a report by Washington State Police, a motorist was driving a Tesla Model S equipped with the company longest-range, 85 kilowatt-hour battery. After apparently striking some metallic debris on the road, the owner began to smell smoke, police were later told, parked the vehicle and exited.  The vehicle reportedly then caught fire.


Tesla Market Capitalization Hits $15 Bil, Passes Fiat and Peugeot – Combined

Battery carmaker soars to new record as Wall St. rethinks auto stocks.

by on Jul.15, 2013

Tesla demonstates its new battery-swap capability.

There are plenty of folks who still don’t see much of a future for electric vehicles. Clearly, they aren’t the ones investing in Tesla Motors.

The Silicon Valley battery-car maker reached a critical milestone Monday morning when its shares surged just enough to push its total market capitalization up to an even $15 billion dollars.  And though Wall Street pushed back as the morning dragged on, Tesla stock still was running more than five times its 52-week low.

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That means the maker, which only just posted its first-ever quarterly profit during the January to March period, now has a market cap equal to Italian automaker Fiat and France’s PSA Peugeot Citroen – combined.

That’s all the more significant considering that Tesla sold a grand total of about 4,750 vehicles during the first quarter. And while that was a good 5% above the battery-carmaker’s original forecast, that’s little more than the number of Ford F-Series pickups sold in two days and significantly fewer Toyota Camrys sold in a week.


Traders Trample Tesla Stock

Shares plunge in post-Christmas trading.

by on Dec.28, 2010

Tesla CEO Elon Musk shown with the Toyota RAV4-EV at last month's L.A. Auto Show.

The Grinch is back, and this year he’s taking aim at Tesla, the California-based electric vehicle start-up that has seen its shares dip by nearly 25% from where they were trading just a week ago.  But that leaves company officials – and industry analysts – wondering exactly what is behind Tesla’s sudden plunge.

While some observers suggest investors may be questioning the firm’s long-term prospects now that mainstream makers like General Motors and Nissan are pushing into “electrification,” others feel the plunge may be more the result of market speculation than anything to do with Tesla’s technology, partnerships, sales or future products.

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The 180-day lock up period on sales of Tesla stock will expire on January 29 and traders appear to have zeroed in on the prospects that Tesla’s share will lose value next month because of rising sales pressure. The lock-up period restricts sales of stock acquired on the day Tesla went public last June.

Thus, traders were buying puts – the right to sell shares at a specified price on a specified day — speculating that Tesla’s share will be selling for less than $25 or $26 per share when the six-month lock-up expires. Tesla closed Monday at $25.55.