Ok...lets think about what's required of Tesla in order to mass market their car, shall we?
The first hurdle they're going to have to overcome is consumer confidence...in other words, they're going to have to find customers who trust them to have true staying power in the competitive world of automobiles. Ok...out of generosity...let's just go ahead and give that to Tesla...let's say they have customers lined up out the whazoo ready to put 70 grand down for their model S.
Ok...now we have to fill those orders, right? Right! So let's think about the logistics of that prospect.
There is only so much lithium ion battery production going on world wide. Does Tesla have enough clout to successfully hijack that industry so that they would be the only client of those producers? I think not. They're a small company...a new upstart that actually has no long term history of keeping up with the supply and demand of the automobile market.
Consider the following:
by next year the Model S alone will soak up almost 40 percent of global cylindrical battery production.
By the beginning of 2015 Tesla will have started production of the Model X, which could add another 20,000 cars to the total--or more.
Credible estimates already exist that point to a need for double or triple the global battery production over the next few years, solely to satisfy Tesla's growing appetite for lithium-ion cells.
Tesla would need to engineer almost a doubling of global cell-fabrication capacity over the next few years.
That's not something that can be done in six months. It took Nissan three years to build its latest lithium-ion cell production plant in Smyrna, Tennessee; funds were committed in June 2009, and the plant went into production late in 2012.
Will Tesla Alone Double Global Demand For Its Battery Cells? (Page 2)
Ok...so lets say that by some miracle, Tesla is able to secure the worlds supply of lithium ion batteries and continue it's growth patterns. The next step they will have to overcome is their refueling supply chain which they are currently struggling with to keep projections on target.
See, originally, Tesla said 18 new Superchargers would be opened by the end of this summer, but just nine are now operational, Green Car Reports says. GCR asked a Tesla spokesperson, who said that another five Superchargers will be open by the end of the week of September 19 (just in time for summer to end). Tesla's own map shows Superchargers coming soon to Waco, TX, and Rockford, IL. GCR also notes that the working stations are concentrated on the West Coast, and that Superchargers earmarked for Rhode Island, Virginia and New Jersey haven't yet seen the light of day. Tesla's official map says 21 Superchargers are open today.
Tesla Supercharger deployment lagging
And...what about when these cars need to be worked on? Do they have infrastructure in place to take care of that little tidbit, or are they going to have to inconvenience their customers requiring them to ship the car back to the original manufacturer for mechanical repairs? Musk currently wants to change the way the entire U.S. sells cars. He wants a model of sale based on the direct sale from the manufacturer, rather than a dealership. While that may sound fine in theory, it's impractical for the consumer when they have mechanical or technical issues arise!
In short...I submit that Tesla's stock is a bubble that is ripe to burst! They can't keep their growth at what it is today unless they get their infrastructure and suppliers in place...just a little bitty tidbit that they seemed to have overlooked!
Now...don't get me wrong...I applaud what they've done up to this point! But the bottom line is that what they've done has it's limitations in the real market. Investors have made a lot of money off of Tesla, but I really don't think that continued profit is in the sector of sustainable consumerism...the profit is located in the arena of speculation for investors.
Musk's previous success in the business world involved extremely limited markets without a lot of competition. He started PayPal...now how much competition was there on that little endeavor? Probably not much since the internet was relatively new at the time. His other upstart is SpaceX...a private company that will supply the space station in the future. Impressive, but again...little competition existed within these arenas. The automobile sector is quite different...the competition abounds!
My prediction? Tesla is headed the way of Fisker Motors...down the tubes!
"The Department of Energy plans to sell by competitive auction, to be held on October 11, 2013, the future advance promissory notes issued by Fisker Automotive, Inc. in connection with a secured loan under the Advanced Technology Vehicles Manufacturing Program in respect of which approximately $168,000,000 is outstanding.
"The loan is presently not performing. Persons interested in purchasing the notes should promptly contact the Advanced Technology Vehicles Manufacturing Program at
portfolio.fisker@hq.doe.gov to learn how qualified prospective purchasers may obtain additional information about the auction, including requirements for submitting an initial bid... The deadline for submitting initial bids is October 7, 2013 at 5:00 PM EDT.
Read more at
http://www.philly.com/philly/blogs/...ic-car-loan-for-sale.html#sMdC1YEG4Py5oDtI.99
