Shares have outperformed the stock market handily over the past five years
Tesla is a very interesting company and one that I have been interested in since I first saw one of their cars on the road a couple years ago. I’ve had the pleasure of getting to test drive a P90d with the ludicrous update and I’ve never experienced such power in my entire life. The employee that was offering my awesome experience informed me of how awesome these cars really are and ever since then, I’ve been intrigued in the company for what they are, a cutting edge electrical production company. From EV’s to home electrical power production and storage, from the outside it would seem they would be a very profitable company but that is certainly not the case. With all of this said, and after reading the interpretations of analysts I do not believe Tesla is currently selling at $356 per share without the volume of sales to justify.
There is a lot of hype over the new Model 3 that will hit the streets in hopes to be popular in the market of the everyday customer, priced around $34k. There is no doubt that the car will impress, I have expressed my liking for this company and have debated buying one. As far as investing goes, buying a tesla would be the only form of investing I would do in the company. With the amount of competition present in the industry, they need to continue to stay ahead of the curve. I believe that Elon Musk and his team obviously believe in their company but setting their shares so high is a form of investment in and of itself. I do believe Tesla will thrive as a company once EV’s have become less of a niche and more of a common practice that society can accommodate to more easily (charging stations), and more people can afford to invest in such technology. According to DeBord (2017), “I’ve spent enough time pondering the company’s financials to conclude that the bankruptcy risk is low while the possibility of the carmaker being accurately valued in the future is high.” Much like Apple, I think that Tesla is ahead of their time and with continuous technological advancements that other companies will in turn mimic, people will begin to catch on and have faith in the company.
GM, who has a stock price of $44 continuously turns a profit, since 2009, is an older and more spread out company than Tesla. Tesla, being the new company that they are, is really banking on the explosive sale of their Model 3 car. According to Newman (2018), “even if Model 3 production recovers, Tesla–with US market share of just half a percentage point, or so–lacks the scale that lets competitors spread costs among millions of vehicles sold every year.” To answer the original question, and based on the content of the provided articles and those that I have posted below, I do think that Tesla is priced WAY too high, but in time I do believe they will eventually be worth what they value themselves to be. Currently my wife and I both drive a ford focus due to their inexpensive purchase price, good fuel economy, and reliability of a commuter vehicle. If Tesla cars were cheaper, we would purchase one, but for most Americans and including ourselves, purchasing cheaper gas powered vehicles is more beneficial to our needs. When the time comes where we are financially able to invest in Tesla’s vehicles, we will most certainly do so because of the eco-friendly characteristics and long-term investment they would serve.
DeBord, M. 2017. It’s become almost impossible to figure out what Tesla is actually worth.
Business Insider. Retrieved from http://www.businessinsider.com/tesla-is-impossible-to-value-2017-8
Newman, R. 2018. The buzz in Detroit: Who will buy Tesla? Yahoo Finance. Retrieved from
Professor and Classmates,
With Tesla Being a major manufacturer of all electric vehicles as well as its recent purchase of SolarCity. Tesla has made a good impression to the public to be a good company to invest in especially with the announcement of there more affordable model S that has around 400,000 in preorders. Besides the Model S tesla has also introduced the all-electric Semi-Truck which it’s predicted to increase in production. With all these orders Tesla’s finances are looking great, which shows the company demonstrating more profits than losses. But Tesla has also been a company that is yet to turn a profit, (Bromels, 2017).
Tesla stocks seems compared to major companies such as Ford, GM and BMW seems odd when you looked at which they also pay no dividend. All the other major manufactures produce electric vehicles which are at or below the price of the model S and their stocks seem more realistic, (Bromels, 2017).
With so many manufactures now competing for the Electric vehicle (EV) market I will not invest in Tesla due to the fact that there are going to be a lot more EV’s made from different companies that are probably going to be even more affordable than a Tesla.
Bromels, J.(2017). Is Tesla, Inc. a Buy? Shares have outperformed the stock market handily over the past five years. Is it still a buy at this level? Retrieved from https://www.fool.com/investing/2017/10/06/is-tesla-inc-a-buy.aspx
Buying shares involve being part of the company; it is essential to understand the historical performance of the firm and market share it serves in its industry before investing. Tesla has a small market share with the uncertainty of expansion and the impacts it may experience as a result of developments in new technologies…………………………..