tesla motors presents a terrific shorting opportunity - tesla motors (nasdaq_tsla) _ seeking...

7/25/2019 Tesla Motors Presents A Terrific Shorting Opportunity - Tesla Motors (NASDAQ_TSLA) _ Seeking Alpha.pdf

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Tesla Motors Presents A Terrific Shorting Opportunity

Aug. 6, 2013 6:28 AM ET355 comments

by: William Koldus, CFA, CAIA

Global stock markets have been on an amazing run since March of 2009. Developed markets, with the U.S. out-front, havespearheaded this surge, powered by the twin engines of central bank purchases and global monetary base growth. Within the

U.S. markets, a group of technology orientated, fundamentally challenged companies have posted the strongest gains. Star

performers hailing from this group, in terms of common stock percentage gainers, have included Amazon.com, Inc.

(NASDAQ:AMZN), Netflix, Inc. (NASDAQ:NFLX), LinkedIn Corp. (NYSE:LNK D), Salesforce.com, Inc. (NYSE:CRM) and

Tesl a Motors, Inc. (NASDAQ:TSLA). While a positive future case can be mad e for each of these companies, each one poses

present-day challenges in calculating their current respective valuations, and this is true even if rosy future assumptions

prove accurate. Going further, I believe that each of these companies represe nts an attractive short opportunity. Collectively,

shorting them makes up one half of my dream pair trade. The other half of thi s pair trade would involve going long the

unde rvalued, under-loved, under-owned commodity stocks. Standing out eve n among its over-valued, over-loved, over-

owned peers, Tesla presents a terrific shorting opportunity, especially if it gall ops higher after the company releases its

seco nd quarter earnings, which are scheduled for August 7th, 2013, after the stock market's close.

Spectacularly Overbought

Since the beginning of April of 2013 when Tesla announced it would post its first quarterly profit, Tesla's stock has been on a

non-stop, parabolic advance. This move higher gained momentum with the release of TSLA's first quarter earnings on May

8th. As of this writing on August 5th, TSLA's stock is now trading over 140% higher than its 200-day moving average. The

chart below shows how extreme this advance looks visually.

For perspective, I wanted to show TSLA's recent share performance compared to AMZN and NFLX, two "story" stocks that

have captured the attention of investors (and the scorn of shorts) over the lifespan of the current cyclical bull market. We willlook at Amazon first:
http://static.cdn-seekingalpha.com/uploads/2013/8/13631982_13757529447296_rId8.pnghttp://static.cdn-seekingalpha.com/uploads/2013/8/13631982_13757529447296_rId8.pnghttp://static.cdn-seekingalpha.com/uploads/2013/8/13631982_13757529447296_rId8.pnghttp://static.cdn-seekingalpha.com/uploads/2013/8/13631982_13757529447296_rId8.pnghttp://static.cdn-seekingalpha.com/uploads/2013/8/13631982_13757529447296_rId8.pnghttp://static.cdn-seekingalpha.com/uploads/2013/8/13631982_13757529447296_rId8.pnghttp://static.cdn-seekingalpha.com/uploads/2013/8/13631982_13757529447296_rId8.pnghttp://static.cdn-seekingalpha.com/uploads/2013/8/13631982_13757529447296_rId8.pnghttp://static.cdn-seekingalpha.com/uploads/2013/8/13631982_13757529447296_rId8.pnghttp://money.cnn.com/2013/04/01/news/companies/tesla-profit/?iid=ELhttp://seekingalpha.com/symbol/AMZNhttp://seekingalpha.com/symbol/CRMhttp://static.cdn-seekingalpha.com/uploads/2013/8/13631982_13757529447296_rId8.pnghttp://files.shareholder.com/downloads/ABEA-4CW8X0/2621472096x0x661989/ee71d11b-3563-489c-9471-9319fd963626/Q1%2013%20Shareholder%20Letter.pdfhttp://seekingalpha.com/symbol/LNKDhttp://seekingalpha.com/symbol/NFLXhttp://seekingalpha.com/symbol/TSLAhttp://seekingalpha.com/article/1530202-the-coming-rebound-in-commodities-coal-and-coal-stocks


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Amazon's advance has been remarkably orderly, trading at a price that approached 100% of its 200-day moving average only

once. This occurred in October of 2010. One takeaway from AMZN's chart is that subsequent advances above the 200-day

moving average, after the peak thrust achieved in the October 2010 move, have generally had less and less momentum,

meaning the percentage gain above the 200-day moving average achieved has generally been smaller and smaller as the

stock's advance has matured. Now let's take a look at NFLX:

At first glance, Netflix definitely has had a more volatile stock price. The separation above and below the 200-day moving

average is apparent, more so than in the case of Amazon. In the first quarter of 2013, Netflix traded at a similar premium to

its 200-day moving average as Tesla does presently. However, in the sustained advance of NFLX's stock price from October

of 2008 to July of 2011, NFLX's stock did not achieve the same thrust above its 200-day moving average that TSLA currently

exhibits. This means that TSLA may even be more loved from a sentiment standpoint than NFLX was during the heyday of its

advance, putting its stock price at risk if the behavioral pendulum swings the other direction. From a fundamental perspective,

TSLA and NFLX have more in common than TSLA and AMZN. These similarities include market capitalizations that are in

the same range, in addition to high degrees of short-interest at various points in their stock histories. Overall, the key

takeaway for me is the massive drop in NFLX's stock price from July of 2011 through October of 2011. I think that this drop isindicative of a fall that TSLA's stock could have if it fell out of favor with the momentum crowd for some reason that is not

readily apparent right now.

Tesla's Stock Could Surge Higher Before Faltering

The number of Tesla shares sold short remains very high, increasing the probability of a final blow-off phase of the continued

short squeeze. Additionally, traders in the options universe are bearishly positioned, with puts substantially outnumbering

calls in the front month option contracts, adding further potential fuel to a last gasp run for the exits for trapped shorts. Thus,

shorting Tesla ahead of its second quarter earnings exposes an investor or trader to the risk of one final surge as the four-

month-old short squeeze finally runs its course. While Tesla is an attractive fundamental short right now, from a risk/reward

perspective, it would be more prudent to short after the upcoming earnings, ideally on a pop in TSLA's share price.
http://www.schaeffersresearch.com/marketcenters/optionscenter/content/option+volume+surges+on+tesla+motors+inc+tsla+ahead+of+earnings/default.aspx?ID=117266http://finance.yahoo.com/q/ks?s=TSLA+Key+Statisticshttp://static.cdn-seekingalpha.com/uploads/2013/8/13631982_13757529447296_rId9.pnghttp://static.cdn-seekingalpha.com/uploads/2013/8/13631982_13757529447296_rId10.png


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Comments (355)

Bottom Line - Reversion To The Mean Will Halt Tesla's Advance

Tesla's stock price has been in a relentless advance since the beginning of April, creating an increasingly favorable

risk/reward opportunity to short Tesla's stock in anticipation of the eventual reversion to mean. The extreme magnitude that

Tesla's stock is extended compared to its 200-day moving average is striking, even in comparison to the stock price

increases of Amazon and Netflix in the current cyclical bull market. Netflix's stock price offers the closer corollary, as its

historical short interest and market capitalization more closely resemble Tesla's. The extreme volatility of Netflix's stock price

should serve as a note of caution to Tesla's current shareholders, as Netflix's stock price plunged dramatically when it fell out

of favor with its momentum oriented shareholders before staging a dramatic recovery. The current high level of short interest

in TSLA's stock and the bearishly positioned options traders suggest caution in shorting Tesla's stock ahead of its earningson August 7th. Any spike in TSLA's share price from levels that are already extremely overbought is likely the last gasp of the

current short squeeze, and thus, it would provide an optimal shorting opportunity.

Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in TSLA over the next 72 hours. I

wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking

Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Miro KefurtWhile TESLA definitely has a terrific car, the TSLA stock is more than overvalued, so eventually it MUST

and WILL drop down to sane value/level. (But when is anyone's guess)

That said I know more than few investors that have shorted the stock and lost $$$$.

(I was not one of them, and never owned TSLA)

For now sky seems to be the limit on how high the per share price will go, but once the rocket fuel is

consumed, I doubt there will a smooth descent or soft landing. But then Mr.Musk may have a spare retro

booster from Space-X, in TESLA spare parts bin !?

06 Aug 2013, 06:38 AM

Jolinar_cz

not the sky, but Mars is the limit :-D

06 Aug 2013, 07:21 AM

CoinsK

How would someone short this stock without buying a PUT in the futures market? Is there a fund

available that will allow someone to short or hedge against this stock?

06 Aug 2013, 08:08 AM

Redrut, Contributor

any broker will allow you to short this stock, IB for example

06 Aug 2013, 08:25 AM
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11341

Nice comment ......Nice connection

06 Aug 2013, 09:00 AM

CoinsK

I know abroker can do it,I want to know how. Please give a nuts and bolts scenario.

06 Aug 2013, 09:53 AM

joenjensen

You may have the idea, it's not so much the car but the man behind these successes he has with

the companies he started.

I believe he has not only a vested interest in Tesla, but believes the changes that Tesla will make

will contribute in a big way to solving the global warming issues, and I believe in that as well.

06 Aug 2013, 10:45 AM

convoluted

Your trading platform will have those options. So, if you want to short 100 shares at market-just

'click' SHORT.

OR, sell a bear call spread OR buy a bear put spread OR combine the two.

I'm looking at a 1x2 put spread, where I buy an ATM put and fund it with two OTM short puts. The

objective is to profit on the ATM put, and let the OTM puts expire worthless. Or, if the stock goes

up, the two OTM puts will subsidize the cost of the long put. It's sort of like a lottery ticket, except

that if TSLA gets absolutely annihilated, you have to deal with one of the short puts. One can also

hedge that exposure as well, but if we try to hedge low probability events, we give up too much

profit, and just spin around.

06 Aug 2013, 10:52 AM

CoinsK

Thanks !

06 Aug 2013, 11:00 AM

joenjensen

I don't believe that Mr. Musk has any limits with anything, especially Tesla Motors..

06 Aug 2013, 11:05 AM

Alexander-the-Great

Remember Tesla is in Kalifornia. Home of the Govinator. Ya Ya. And the coast, and the
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mountains, and the other things, Ya Ya. If Tesla drops in price, there will be Total Recall!!

06 Aug 2013, 12:41 PM

fellows

Joenjensen, enlighten us on how Elon's Space X will solve global warming?

It doesn't matter, all the experts say it will take 1000 years to reverse global warming if all 6 billion

of us stopped producing carbon today. So if driving an electric car makes you think you've shaved

off a couple degrees off the Earth's mean temperature in the year 2150, more power to you,

however you'd be better off encouraging more of us to walk, ride bikes, or take public

transportation.

Not that it matters. This article is about a great shorting opportunity for an overvalued company. It

has nothing to do with the philosophies of the man behind the company regardless of how selfish

or noble they may be.

06 Aug 2013, 12:41 PM

Michael Brando

Alexander, have you been reading the newspapers? Jerry Brown is gov of California

06 Aug 2013, 01:17 PM

fellows

Alexander....so you like Tesla because its named after a Serbian named Tesla and you love all

things Serbian?....Wow, I find a new kind of Tesla fanatic everyday.

P.S. Arnold hasn't been in office since 2011.

06 Aug 2013, 01:47 PM

Alexander-the-Great

But Arnold is still on the big screen and Terminates the competition like Tesla Terminates gas

cars!!!

06 Aug 2013, 02:08 PM

fellows

Well said Alex, you must be a Tesla spokesman. So if Nikola Tesla wasn't Serbian, would you still

think "Tesla Terminates gas cars"?

06 Aug 2013, 02:27 PM
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Dave_M

I have no doubt that TSLA will eventually trade at $250. However, we will see wild swings up and

down before then as speculation, doubt, and exuberance drive stock moves. You see, we have

nothing to measure Tesla against in recent history. There have been no successful entrants to the

auto industry in more than 70 years. Now that it's become apparent that Tesla will be a successful

entrant, how should they be valued? Based on this years financials? Next years expected

financials? Or perhaps the expected financials 3 or 4 years from now? Everybody's got a different

answer.

Short sellers tend to value TSLA based on the last 2 quarters results and price multiples. Long

investors tent to value TSLA based on the anticipated ROI over the next 3 to 4 years. For others,

TSLA could be a day trader's dream or nightmare.

For me, I'm just happy being a Model S owner. Previously long TSLA, now just watching from the

sidelines waiting for another long opportunity.

06 Aug 2013, 03:07 PM

Aristides Capital, Contributor

if you aren't sure how to short a stock, this might not be the first one you want to try.

yes, stock is very overvalued. however, company does have a huge moat (it is incredibly hard to

start a car company, and the company's technology is good), so until they disappoint, or until the

speculative fervor in the market goes away, the dream of a very disruptive company that could

become the next major automaker (and eventually more profitable than the existing ones) will

persist.

I'd rather be short SCTY. Insane valuation plus no moat plus chart toying with 50-DMA for the

second time after a blowoff top in which more than half the free float traded in a week. The best

thing SCTY has going for it is its business model, which will be copied and copied until it is

essentially a commodity business in which they have no real advantage.

06 Aug 2013, 03:10 PM

David Pinsen, Contributor

Shorting and hedging are a bit different, but if you (or other readers here) are long TSLA and

looking to hedge, but I showed a way you could get paid to do so in this instablog post today:

http://seekingalpha.co...

06 Aug 2013, 05:36 PM

TAS

Short, long......neither.
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Mom and pop investors have no business betting their precious wealth on this speculative issue.

For those of us who have (or think they have) fun money to burn, have at it.

06 Aug 2013, 10:05 PM

videoman

Yes, driving the Tesla to the airport to catch your CO2 bellowing private jet is really going to help

the environment. Tesla is nothing more than politically correct over-consumption. A car that can

only serve as a 2nd vehicle, only affordable to millionaires, and powered by batteries leave the

3rd world in a polluted mess. Worse yet, has a larger carbon footprint than an efficient hybrid.

That it only exists due to taxpayers is yet one more example of uber-rich robber barons living

large off the common man. Give me a break.

06 Aug 2013, 10:27 PM

Rik1381You've done a remarkable job presenting figments of your imagination. Give all of us a break.

06 Aug 2013, 11:00 PM

PeterJA

"driving the Tesla to the airport to catch your CO2 bellowing private jet is really going to help the

environment."

Well yes, one less ICE car driving to the airport does indeed help. If you are suggesting that

people shouldn't take jets, Elon is working on that too.

http://bit.ly/14xp72M

"Tesla is nothing more than politically correct over-consumption."

Tesla's plan from day one has been to build luxury cars to pay for development of the mass-

market Gen3. This plan is known to anyone who does some research about Tesla before venting

about it.

"A car that can only serve as a 2nd vehicle"

No. Try talking to a Model S owner.

"only affordable to millionaires,"

No. Look at the life-cycle cost.

"powered by batteries leave the 3rd world in a polluted mess."

Would that be a mess worse than the oil and gas and coal industries have left in the 1st world?

Oil spills in the Gulf? Fracking in Pennsylvania? Mountaintop removal in West Virginia? Please

provide a source for your claim besides FOX News.
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"Worse yet, has a larger carbon footprint than an efficient hybrid."

Junk science that can be debunked by anyone except those with a huge bias like yours.

"uber-rich robber barons living large off the common man"

The robber baron Elon paid back Tesla's government loan with interest, which GM, Ford and

Chrysler have not yet or never will do. If you're talking about tax credits for EV buyers, compare

the tax deductions for the oil and gas industries.

"Give me a break."

You need some facts.

06 Aug 2013, 11:06 PM

Tadpoles_UK

Again??

06 Aug 2013, 11:14 PM

Tadpoles_UK

"There have been no successful entrants to the auto industry in more than 70 years."

Hyundai started about fifty years ago, but didn't sell cars in the US until 1986. They now sell over

3 million cars a year, not including Kia. I would say that they're a successful entrant.

06 Aug 2013, 11:19 PM

Alexander-the-Great

If I wasn't a Serb, I would still put money in Tesla like I did and still eventually buy a Tesla Pickup,

when it come out. Price of electricity is less than gasoline. It is a no-brainer. I am not a green

energy person, but I do not like giving out what little green I got in my wallet. I like getting green

back down the road.

06 Aug 2013, 11:30 PM

katgod

Is every new Mercedes and BMW driver a millionaire? Most of these same people can afford a

Tesla if they want one. Give me a break as you so nicely put it.

07 Aug 2013, 02:06 AM

alext1379

Success based on German designs (their designer is German, not Korean) and stealing other

company's designs (i.e. Santa Fe clearly ripped off of BMW X3 and Ford front end).


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Success based on government currency devaluation and up until recently, a protected domestic

market where Hyundais cost more than BMWs because BMWs finally got the import taxes

removed.

If the government covers all of your losses in an effort to promote governmnet policy of keeping

exports high to keep the citizenry working, then anyone can be successful.

07 Aug 2013, 10:48 AM

wongvpw

All shorts gotta cover now! What a blow out quarter!

07 Aug 2013, 05:02 PM

Dave_M

Tad - You're right. I guess I was thinking USA entrants.

08 Aug 2013, 07:19 AM

fellows

Alexander...do you think your battery powered Telsa pickup pull a 7000lb load through the

mountains in winter? Or were you also going to take up some of that 7000lb load using a bigger

battery? I understand electricity is cheaper then gas, but why hasn't the heavy truck industry

embraced this yet? Is it perhaps because the battery itself is a large forever degrading asset

that's easily offset by the cost of gasoline? Does your 6 year old iPod have the same battery

capacity that it did 6 years ago? Are you aware gas powered vehicles don't have to worry about

this? You mentioned you don't like giving out the green in you wallet, so is this why you believe a

$100,000 electric car with a 250 mile range is cheaper then a $30K gas car with a 450 mile

range? Might want to rethink that no-brainer.

08 Aug 2013, 02:03 PM

RedScourge

If you think it's still a car that can only serve as a 2nd vehicle, you're about 4 years behind on

Tesla news. They've got a charger station every 200 miles in the US now or something like that,

they're rolling out faster chargers, and in a few years will have a super fast battery swap thing

that's faster than recharging. While the subsidies are a problem, the Tesla seems like a one of the

only parts of the green technology segment that's actually got potential to lower overall CO2

production.

That being said, the stock is grossly overpriced. If Audi you divided Audi's market cap by the

number of cars they make then multiply it by the number of cars Tesla makes, you'd arrive at

about $6 per share. While Audi does not equal Tesla, it at least gives you an idea of how grossly
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overvalued Tesla must be.

08 Aug 2013, 05:00 PM

RedScourge

Actually Ford didn't borrow a dime from the government.

08 Aug 2013, 05:00 PM

RedScourge

One factor you may want to be aware of in any quick and dirty run at number crunching the ROI

of these things is that the price of a Tesla usually includes one battery replacement.

08 Aug 2013, 05:00 PM

Samuel H

I don't think so. You shorts have been losing money every time Tesla announces something newor posts better than expected earnings. Go long. Who would have thought several months ago

that you could have bought TSLA at $100 a share and make a 50% profit if you sold it now? The

two people that I know with TSLA holdings both bought at around $30. Their investment has

Quintupled! And you say short the stock? Muttered obscure insult... Some TSLA holders sold

their stock and bought a Model S after massive gains.

Here's my advice: Don't short the stock unless there is good reason to believe that Elon Musk will

fail at a particular endeavor. So far, he has shown an impressive record of defying the nay sayers

and delivering on his promises. Betting that Tesla will fail is not a good strategy.

The Model S is awesome and is selling well. The stock will jump when the super-high

performance AWD Tesla Model S hits the market in 2014. The stock will jump again when the

Model X comes out and outsells than the Model S (see Porsche Cayenne), and the Gen III will

turn Tesla Motors into a big company, accompanied by a well-deserved jump in stock price.

Don't short the stock. You're gonna lose.

08 Aug 2013, 05:03 PM

Samuel H

I don't think so. You shorts have been losing money every time Tesla announces something new

or posts better than expected earnings. Go long. Who would have thought several months ago

that you could have bought TSLA at $100 a share and make a 50% profit if you sold it now? The

two people that I know with TSLA holdings both bought at around $30. Their investment has

Quintupled (5X)! And you say short the stock? Muttered obscure insult... Some TSLA holders sold

their stock and bought a Model S after massive gains.


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Here's my advice: Don't short the stock unless there is good reason to believe that Elon Musk will

fail at a particular endeavor. So far, he has shown an impressive record of defying the nay sayers

and delivering on his promises. Betting that Tesla will fail is not a good strategy.

The Model S is awesome and is selling well. The stock will jump when the super-high

performance AWD Tesla Model S hits the market in 2014. The stock will jump again when the

Model X comes out and outsells the Model S (see Porsche Cayenne), and the Gen III will turn

Tesla Motors into a big company, accompanied by a well-deserved jump in stock price. They'll

probably settle down to a "reasonable" level then: North of $200 a share sounds about right.

Don't short the stock anytime soon. You're gonna lose.

08 Aug 2013, 05:05 PM

Samuel H

Just look up Rimac Concept One and be amazed. It's the Bugatti of electric cars and has a price

to match. It's built in Serbia, as is the Pipistrel Panthera which will be the world's first productionhybrid and electric four seat aircraft.

08 Aug 2013, 05:10 PM

Rik1381

Ford received a $5.9 billion U.S. Department of Energy ATVMP loan, the same program that

granted Tesla a $456 million loan. Tesla has paid back their loan in full.

08 Aug 2013, 05:15 PM

RedScourge

A short is not necessarily a bet that Tesla will somehow fail, Samuel. It simply is a bet that the

price will come back down to Earth a bit.

08 Aug 2013, 09:09 PM

AlexiaEP

You're right, Ford didn't borrow a dime, they borrowed 5.9 Bbbbillion pennies from thegovernment under the DOE program.

08 Aug 2013, 11:51 PM

Alexander-the-Great

"Alexander...do you think your battery powered Telsa pickup pull a 7000lb load through the

mountains in winter?"

Yes. I used to work at Home Depot and was a forklift operator. The propane fueled forklifts were


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not as good as the electric forklifts. Also I never pull 7,000lbs load. A ford F-150, which can pull a

7,000 load, has an engine that is not as much horsepower as a Tesla Model S with 85Kwh and a

performance engine.

Tesla performance model has 416 horsepower and a 2013 F-150 has 6.2l V8 with 411

horsepower. Here are the links tesla at Wikipedia http://bit.ly/M5Sadm and Ford at their website

http://ford.to/19VNdW8.

Tesla still has not designed their pickup yet and if the company wants me as a consultant,they

can give me a call. I currently drive a Ford Ranger, not a full size truck.

I am talking about light duty, pickups not 18 wheelers. You are switching from pickups to 18

wheelers, apples vs. oranges.

Battery capacity does degrade over time, but properly maintained can be cost effective in the long

run. Since the price of oil is at $100 barrel, electricity is becoming attractive.

Right now a 100k car with a 250 mile range can be cheaper than a 30k car with a 450 mile range,

if you live in Europe where gas is $9/gallon like London. And actually a Model S can be bought for

70k so start using realistic numbers.

The no-brainer is the following. Unless gas drops to $1.25 gallon and cars get 40mpg than an

electric vehicle is an option. Will gasoline ever go back to $1.25 gallon? Or is $3.50 ( what I pay in

Houston) and higher here to stay?

11 Aug 2013, 01:37 AM

Alexander-the-Great

I bought at 38.50!!! Elon may not be GOD, but by god he is doing a great job. When he is ready to

design that pickup truck, give me a call and I will give my advice from owning 2 different trucks(

gmc and a ford) over the years.

11 Aug 2013, 01:43 AM

fellows

Samuel H-the Pipistrel Panthera 4 seat variant is gas only, the hybrid and pure electric variant are

2 seaters to leave room for electric hardware. Until the FAA can explain exactly what is going on

with lithium batteries catching fires on airplanes, I wouldn't expect to see an electric plane certified

in the US anytime soon, unless is uses less efficient niCad.

11 Aug 2013, 05:31 AM

fellows

Alexander-the point isn't in the engine power, its the range. A common mistake EV fans make is
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comparing a sleek sports sedan with low drag, take the given range, then try to apply that range

to any vehicle platform out there. The shape of a truck alone will trash any kind of range you'd

expect out of a Model S. The ground clearance, plus trying to spin heavy truck tires at highway

speeds would send the Model S's 220 mile range to something below 150 miles easily and that's

with the most expensive battery pack. Add aging to the equation and a 10 year old electric truck

that may have set you back $90K new could be delivering a range below 100 miles. Pulling

7000lbs often enough will shorten the already short lifespan of the battery. Trucks aren't alwaysdriven where there are supercharger stations, so taking a boat up to the mountains would be a

risky venture even when it is new. With a gas or diesel truck, mileage goes down, but you can

always refuel it in 5 minutes.

The "no-brainer" that you've illustrated doesn't take in account the fact you're paying for

anticipated fuel savings up front with the higher cost of the battery, plus the fact that battery will

have to be replaced often if you expect to maintain the same range year to year. Sure its a better

deal if you live in a place with $9/gallon gas, but Europe and the US are apples to oranges (how

many people in the US do you think commute to work in a moped compared to Europe?)

11 Aug 2013, 06:03 AM

fellows

RedScourge-" They've got a charger station every 200 miles in the US now or something like that,

they're rolling out faster chargers, and in a few years will have a super fast battery swap thing

that's faster than recharging." ---just to clarify, Tesla would like one day to have a supercharger

station every 200 miles, however as of right now its limited to major metro areas. The fast battery

swap thing is pretty much just a gimmick revealed for the sole purpose of bumping the stock price

up. No details have been released on how much its going to cost, or how many batteries Tesla

will have to produce that sit on a rack aging its life away that possibly never find a customer to

pay them. Its fair to assume you won't see these every 200 miles, and the practicality of expecting

an automated process like this to go smoothly on a car that's seen a few thousand miles is

questionable.

11 Aug 2013, 06:14 AM

PeterJA

"a supercharger station every 200 miles"

Tesla plans to have a Supercharger station every 100 miles on major roads by 2015. A coast-to-

coast route should be complete by the end of 2013.

11 Aug 2013, 08:32 AM

chfp

I'm sure he appreciates your enthusiasm but WTH would he call you just because you've owned a
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few trucks? He has teams of experts that know how to design vehicles.

11 Aug 2013, 09:21 AM

Dan Naumov, Contributor

"so eventually it MUST and WILL drop down to sane value/level"

Tell that to Amazon.06 Aug 2013, 06:48 AM

Sellinpanic

...or Netflix.

06 Aug 2013, 06:58 AM

rambler1

Amazon & the following comments on NFLX both through the years have pulled back

substantially. The author merely believes the stock is overbought & I tend to agree. If you can

take ride then fine. I'm not short TSLA nor do I dislike it, but prudence dictates either taking some

profits on substantial gains or be prepared for dips. Look at PCLN in the last year the stock got

down to the $560 area from the $700 level and now is $900 +.

06 Aug 2013, 07:34 AM

joenjensenOr Warren Buffet's Berkshire Hathaway "A" stock. Last time I checked it was $176,452.00 per

share and he won't split the share price. About two to three months ago it was about $152,000.00

per share if I remember correctly, so you can see how a stock can climb if it's a growth stock like

brk-a or b, and you stick with it, tsla is also considered a growth stock.

Warren recently said that you have to stick with a growth company for a minimum of five years, so

be patient and your rewards will come through.

06 Aug 2013, 11:14 AM

fellows

how did that work for Fisker?

06 Aug 2013, 12:44 PM

madhaus

@fellows, that's like asking why buy Ford, because Yugos were built crappy. Every sector has

darlings and dogs. Do you think the presence of dogs implies darlings are dogs too?
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Foolish comment showing no understanding of the industry.

btw I cashed out my September 115s yesterday for a gain of over 200% in four weeks, but I'm still

long on the stock itself. We'll see if I hit sell too early but I was happy enough with this return. I'll

buy in again on the next dip.

06 Aug 2013, 02:05 PM

maybetoday1

Could we be even more simple minded? Fisker was a mismanaged company that went with a

battery supplier that was not proven and the technology of their package was not good.

Tesla is managed by one of the smartest people in the country with the best team around him to

produce the best product possible, whether you are talking ICE or Electric vehicles. Sure, the

stock price is overvalued right now, but you do not look at what is happening now, but 4-6 years

in the future...this is why the stock price is where it is now and will continue to go up as Elon Musk

and Tesla continue to over deliver the best product in the market. Just start thinking outside thebox and look into the future. This is why most major funds have bought this stock...for the future

potential...not what is happening right now.

As for the shorting opportunity, unless you have just woke up from a long 6 month sleep, these

stock shorting editorials have been mentioned within SA about 50x...and, ALL of the shorts have

been burned and have lost tons of money. Now, if you do not like the stock, pick one that could

go up in value that you feel more comfortable about...shorting Tesla will continue to cause a world

of hurt on your checkbook!

06 Aug 2013, 02:39 PM

fellows

maybetoday...I'm trying to look into the future you seem to be looking into. Is it the one where

Tesla's EV market is crowded out with competitors with similar products? I can't help but think if

you made this statement when Blackberry first got popular only to find it at 5% market share now.

Here's some news for you, Tesla isn't the only EV product nor will it be the last and its

competitors have far more resources to compete. There's absolutely nothing that secures Tesla's

market share right now, and its Gen III plan for 5 years from now already has competition today.

Its never too late to short this overvalued stock.

08 Aug 2013, 02:10 PM

RedScourge

Nothing's wrong with Amazon. They keep growing their revenue by 30% a year. The reason their

profit margin is roughly zero is they're constantly reinvesting as much of their income as they can.

it's actually incredibly stupid to make a huge profit as a business, because then you get taxed


16/105

huge unless you exploit some sort of tax loophole.

08 Aug 2013, 05:00 PM

RedScourge

In the case of Tesla, given it's current valuation, I'd say you may have to wait 22 years at 20%

sales growth per year before you turn a profit on stock bought today, because in one or two years

the stock's probably going to drop to the 30s again where it belongs. Don't get me wrong, they're

a hell of a company, but Audi produces a million cars a year and it's only twice the market cap of

Tesla, which produces under 22,000.

08 Aug 2013, 05:00 PM

RedScourge

4-6 years down the road? Try 20. The thing has about 20 years of growth priced into it right now,

assuming an incredible 20% YOY growth rate.

The company will undoubtedly drop by at least a half at one point in the next few years. If it's

before Jan 2015, you can buy 1 x $75 strike Jan 16 2015 PUT option on TSLA which will cost you

about $1000, and potentially yield a profit of about $6500 if it comes into the money.

08 Aug 2013, 05:00 PM

AlexiaEP

Mr. Musk has already hinted at production of Model S 'doubling' in 2014. There's not going to be

any silly little 20% growth next year. Pay attention.

08 Aug 2013, 11:54 PM

RedScourge

How many years do you think they can keep up that 100% growth trend for though Alexia? They

still need to multiply their current production by at least 10x to justify their current valuation, but

more likely 15-20.

15 Aug 2013, 09:24 PM

AlexiaEP

I will go out on a limb and say I believe they will double growth for the next two years. 800/wk in

2014. 1600/wk in 2015 as they'll be producing S and X. I then expect a minimum of 1600/wk to

continue until GEN III is released. Once GEN III has a couple of quarters of production, I then

believe production will double rather quickly to a run rate of 3200/wk (160k between the three

models). And I also believe that GEN III will be a smashing success and the following year the run


17/105

rate may double yet again to 6400/wk bringing us to the year 2019/2020. By then, though, you

won't get a share for anywhere near current value.

16 Aug 2013, 01:22 AM

buyandhold???

There is literally no chance they keep this pace up, I said it before and i will say it again, the only

reason they smashed those other luxury brands in sales recently is bc the S class and 7 series

are on their way out and the new models are coming in.

Im getting my new S550 in october bc of Germany delivery, they won't be for sale in the US till

early 2014, come back and let me know if tesla beats them in sales next april-jun

quarter......here's a hint....there is no chance of that. Mercedes will probably sell 10,000+ S

classes each of the first 2 or 3 quarters of the new S class release

18 Aug 2013, 09:46 PM

PeterJA

"There is literally no chance they keep this pace up"

I agree. Tesla's sales pace will increase.

"Mercedes will probably sell 10,000+ S classes each of the first 2 or 3 quarters of the new S class

release"

Tesla is currently selling 5,000 Model Ss each quarter in North America. If Europe and Asia each

buy half that number, Tesla's total sales will be 10,000 per quarter. But most likely it will be more.

High gas prices, high taxes on gas luxury cars, and Tesla's high tech all favor the Tesla S over

Mercedes.

"there is no chance of that"

There is a very good chance of it, given current trends. Mercedes has acquired fans like you over

decades. Tesla is just getting started.

19 Aug 2013, 12:10 AM

AlexiaEP"There is literally no chance ..."

"...there is no chance of that."

Is that the same 'no chance' that Model S would ever be built?

Is that the same 'no chance' Tesla will sell more than 5,000 Model S's, ever?

Is that the same 'no chance' that Tesla would become profitable?

Is that the same 'no chance' that Gen III will be built?

You might very well be right, Sir, but I've heard this 'no chance' argument for a very long


18/105

time...years...and it seems that the more thou doth protest Tesla has 'no chance', the more likely

there is a chance...a very good chance.

19 Aug 2013, 01:45 AM

buyandhold???

Peter you keep mentioning gas prices like it matters to this type of buyer. Geez man, I just paid

$129,000 for a nearly loaded 2014 S550 and got every option but the entertainment package bc I

don't need TV's in the backseat. Let me tell you, when people pay over $100K for a car, the

monthly gas bill isn't as big a deal as it is for someone who buys a $20K car. Relax, people with

money don't buy cars with the gas bill in mind, that's a silly argument. Gas tax?? I don't know

what that is but I paid $3,500 in luxury tax, again, a sub 3% tax isn't going to kill me, I already pay

an arm and a leg in taxes.

Tesla is not feasible to all my friend, I actually considered one, but my condo, I live in Miami,

wouldn't allow me to get one bc of the lack of charging capability in our parking garage. My

building is valet only, so I can't park anywhere. I would have had to have the electric company

come and set up my own meter, and the hassle involved with getting the condo association to

sign off on that would have been not worth it.

The Tesla is a nice car, I've said that, but you guys pumping it don't get what I'm saying that the

price of the future is already priced in, and I promise Mercedes,BMW, and Audi will have electric

cars one day too, and when they do, the prestige of those names will win out.

I know MB has an electric version of the new S class coming soon, and Im sure that will bite into

Tesla sales with the "electric" crowd, but personally, I am 100% sure gas bills are not why peopleare in the electric car crowd at these price levels. Saving $300/month on gas to people in this

category can be done by cutting out one of the many nights out on the town, it doesn't have to be

done by getting an electric car

19 Aug 2013, 07:50 AM

Rik1381

"I know MB has an electric version of the new S class coming soon"

Are you are referring to the plug-in hybrid Mercedes Benz S-500? While it's great that MB is

improving the fuel efficiency of their cars, hybrids do not have the driving characteristics of EVs.

I"m sure that MB, Audi, BMW will have desirable EVs on the market one day. First they need to

get over their mistaken notion that EVs can only be small boxy city cars.

19 Aug 2013, 11:02 AM

PeterJA


19/105

"Gas tax?? I don't know what that is but I paid $3,500 in luxury tax"

You don't live in Europe or Asia where the luxury tax often doubles the price of a Mercedes S.

"people with money don't buy cars with the gas bill in mind"

"I would have had to have the electric company come and set up my own meter"

I see a contradiction between saying you can afford to waste thousands of dollars on gasoline,

but you can't afford the one-time "hassle" of installing a charger in your garage. Tesla S owners

love avoiding the weekly hassle of stopping at smelly gas stations.

"Mercedes,BMW, and Audi will have electric cars one day too, and when they do, the prestige of

those names will win out"

By the time these companies have a Tesla-class EV (several years from now at least), the

prestige of Tesla will be well established.

"MB has an electric version of the new S class coming soon, and Im sure that will bite into Tesla

sales"

How can you be sure of that when you don't know the range, or if it can use Superchargers, or if itwill have a Tesla drivetrain like the Mercedes B-class EV?

19 Aug 2013, 11:49 AM

buyandhold???

The hassle of setting up a meter in my garage? I live in a condo, there are no electrical outlets

near my assigned spaces, now what do I do? I live in a condo with 95 units, and every unit is over

$1M, 95 millionaires can't buy your precious tesla here.

You act like the Tesla battery is world class? It can't even do 400 miles, which I can do in my

S550 on the highway.

The tesla is a nice car, but it's a gimmick for the hippie crowd of which there are tons of rich

liberals, look at all the people who voted for obama and are wealthy. It happens, the Tesla can't

even be purchased in Texas where I have my other home, state laws.

Elon Musk is great, and gimmick cars work well see Ferrari,Lamborghini,etc but they're not $20B

companies

19 Aug 2013, 03:16 PM

Rik1381

buyandhold, you misjudge the market for Tesla. It is sold in Texas. There are many Model S in

Texas, driving around today, owned by Texans. It's also not just for the "hippie crowd". The car

appeals to many different buyers. Many of them don't care at all about being "green", they buy the

Model S because it's more fun to drive on the street than the competition.
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I thought that potential investors would want to understand something about the market and

quality of a company's products. Partisan stereotypes don't constitute responsible investment

research.

The Tesla Model S is the first unanimous winner of the Motor Trend Car of the Year Award in the

64 year history of this award. It received the highest score of any car Consumer Reports has ever

tested.

Does this excerpt from the 2013 Automobile of the Year Award article sound like something a

hippie would write?

"Actually, the Model S can blow away almost anything. "It's the performance that won us over,"

admits editor-in-chief Jean Jennings. "The crazy speed builds silently and then pulls back the

edges of your face. It had all of us endangering our licenses." Our Model S was of Signature

Performance spec, which means its AC induction motor puts out 416 hp and that it blasts to 60

mph in 4.3 seconds. Even those numbers -- positively absurd for a large sedan that uses not a

lick of gasoline -- fail to communicate how crazy it actually feels. "It's alarming to jam theaccelerator of such a big car and have it surge forward so quickly and so quietly," says copy

editor Rusty Blackwell. Like most electric cars, the Model S generates its torque almost instantly.

Unlike most electric cars, Tesla's torque amounts to a prodigious 443 lb-ft, all of which goes to the

rear wheels. The only indicators of your stunning momentum are the rush of scenery around you,

a faint whine, and the digital speedometer's difficulty keeping pace. "Driving the Model S is

decidedly not like piloting a Nissan Leaf or an electric Smart," notes road test editor Christopher

Nelson. Contributor Ezra Dyer, meanwhile, was so impressed that he arranged an informal drag

race to 100 mph with a 560-hp BMW M5. The Model S won. "It bears repeating: this thing is silly

quick," he concluded."

http://bit.ly/1d0xrud

19 Aug 2013, 03:52 PM

Rik1381

"It can't even do 400 miles, which I can do in my S550 on the highway."

I can do 550-600 miles on the highway with my family's diesel car. Since we got our Tesla Model

S, the diesel has been demoted to backup car status, and gets used very little. The Model S has

been great for both short and long trips.

"see Ferrari,Lamborghini,etc but they're not $20B companies"

Neither one of them is an independent company. Ferrari is a subsidiary of Fiat and Lamborghini is

a subsidiary of VW.

19 Aug 2013, 04:02 PM
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buyandhold???

yes there are model S in texas, did i say there weren't? But those cars were not purchased in

texas, those showrooms aren't even allowed to discuss the car pricing, I was there i tried....so

don't act like you can go buy one in texas...you can't from Tesla, but of course you can get one

from other places

19 Aug 2013, 04:07 PM

Rik1381

buyandhold, the Model S in Texas were purchased on the Internet. It's the same way I ordered

my Model S in California, and the same way nearly all Model S buyers anywhere purchase this

car.

The Model S in Texas were delivered within Texas.

Yes, anti-competitive laws in Texas do restrict Tesla's abilities there, as you correctly point out.

But the hurdles are not insurmountable.

19 Aug 2013, 04:13 PM

PeterJA

"I live in a condo, there are no electrical outlets near my assigned spaces, now what do I do?"

I guess you wait for someone else in your condo to have electrical outlets installed, since you

apparently are incapable of that.

"You act like the Tesla battery is world class? It can't even do 400 miles"

The Tesla battery is the best commercial EV battery in the world. A 500-mile battery is possibletoday, but would be more expensive than Elon wants. That will change in a few years.

19 Aug 2013, 04:17 PM

AlexiaEP

"But those cars were not purchased in texas, those showrooms aren't even allowed to discuss the

car pricing, I was there i tried....so don't act like you can go buy one in texas...you can't from

Tesla, but of course you can get one from other places."

Don't be silly. Of course those cars were purchased in Texas. They were purchased over the

Internet either in the owners' homes in Texas, or at a coffee shop in Texas, or wherever the

person happened to be standing in Texas, when they connected to the Internet.

You are correct that you can't walk into a Texas Tesla gallery and write a cheque for a Model S

(but you can't do that in any Tesla gallery, anywhere in the world) and the Tesla employees will

not discuss price with you. But, so what? If you can use any sort of Internet device (and I know

you can) then you can simply go to Tesla's website, see for yourself and order for yourself. Or are

you one of those guys who needs their hand held to go to the restroom?


22/105

19 Aug 2013, 06:13 PM

buyandhold???

you can do all that in miami....i did it....and if you want they let you test drive it and will let you buy

it right there with a $5k deposit on their website all in the tesla showroom, believe me i test drove

at the lincoln road location. It's nice, but it's not even in the S class league

19 Aug 2013, 06:39 PM

AlexiaEP

Then you're going on about this, why? It's a non-issue. Glad we've got it sorted out.

19 Aug 2013, 07:32 PM

Stymie67

More lack of understanding of the growth story and industry game-changer Tesla represents, and whytherein strict fundamentals are not the question. IMO short this company at your own considerable risk.

But then again a repeat of the short squeeze after Q1 earnings last time would be OK. Seem to recall the

same types of articles pre-earnings then too.

06 Aug 2013, 06:48 AM

Vanilla Value

Confirmation Bias

06 Aug 2013, 08:46 AM

videoman

I hate everything about this company. Tesla produces a rich-mans toy that is only succeeding

with government subsidies, tax breaks for the rich, and posted a profit only by selling zero-

emission credits to other car companies (another government shell game). The spent batteries

will present another toxic mess, and there is some research that suggests that current-generation

electric cars generate more net pollution than efficient hybrids. What the Tesla car is great for is

allowing smug millionaires to over indulge while pretending to be earth-friendly. My bet is that

when the subsidies die, this company will also die.

06 Aug 2013, 10:47 AM

true.north

At the rate that TSLA is innovating, they won't need the subsidies much longer.

06 Aug 2013, 11:09 AM
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fellows

well said videoman.

06 Aug 2013, 12:42 PM

J. McRoberts

I believe Tesla has the potential to be majorly disruptive if they can sell a car with 250+ range thatcompetes with the BMW 3 series. Given battery tech projections this is possible.

Regardless its market cap is at ridiculous levels. Even if they succeed at capturing a large

segment of the market they are targeting its over-valued imo. I wouldn't go short no reason it can't

continue upward for awhile if enough investors believe the story.

In my opinion I only see Tesla dropping if the market goes south and I do not see this happening.

06 Aug 2013, 01:16 PM

Joe E Coyotee

Videoman if you bet Tesla will die when subsidies die why not really bet on it and short it as the

subsidies will die soon and why is it okay for everything else to be subsidized, does this mean our

entire economy that is heavily subsidized should die also?

by the way Tesla paid off there subsidy loan 10 years early

and the other auto makers got way more subsidy money and still owe on it.

nobody is pretending to be earth friendly when they buy a Tesla, its just like buying any other car,

you test drive it and you fall in love with its performance, looks, and your necessity for

transportation.

were going to destroy the earth no matter what we do, if you want to destroy the earth with gas

car go ahead its a free country but let the other half of the population destroy it with electric

batteries charged up by coal fired power plants, which by the way is not 100% true unless you are

part owner of an oil company. in which case you would want everyone to believe this.

by the way i believe lithium batteries are non toxic and are part recyclable.

06 Aug 2013, 02:07 PM

Joe E Coyotee

I 100% disagree with videoman those are words of an oil company

06 Aug 2013, 02:09 PM

madhaus

This comment is spectacularly ill-informed... where to begin? It's got so many incorrect

assumptions in it, it's difficult to figure out where to start.


24/105

The batteries will not create a toxic mess, they will be recycled and used for storage elsewhere. A

70% capacity battery may not be useful in a car but will be perfect for storage that isn't moving

around. The car doesn't need the subsidies to succeed, that's just gravy. Proof: they just raised

their prices a few days ago! Again! Does a company that can't sell their product without subsidies

only do that? And what subsidies are you referring to anyway, the loans that they paid back

early? The same loans that Ford and Nissan and GM took out that they haven't paid back yet,

and in much larger amounts?

And the "dirty EVs" meme is nothing but propaganda from the oil companies. The fact you're

repeating that lie here shows you're either here to spread disinformation or you're amazingly

credulous. Think about it, which is easier to keep clean, one power plant or 50,000 tailpipes?

Write again when you can understand the issues better.

As to your bet, are you short? Because if you aren't, you're not actually taking your bet, and if you

are, you're headed for a world of hurt.

Long TSLA.

06 Aug 2013, 02:12 PM

maybetoday1

They no longer have any subsidies...in fact, they paid back their loan in full, unlike most of the

other auto manufacturers that received them.

06 Aug 2013, 02:43 PM

Freedoms Truth

"I believe Tesla has the potential to be majorly disruptive if they can sell a car with 250+ range

that competes with the BMW 3 series. Given battery tech projections this is possible."

There is a car already that has 250+ range and is plug-in electric, the Chevy Volt. Lots of other

plug-in hybrids out there.

That same battery tech will be available to other carmakers as well. So it will expand the EV

space but not leave it all to one company.

06 Aug 2013, 03:13 PM

Freedoms Truth

They no longer have any subsidies"

False. there is a $7500 federal tax credit for buying these EVs. tesla made money on cali ZEV

credits too.

Sooner or later the govt is going to realize that subsidizing cars that DONT PAY ROAD


25/105

MAINTENANCE TAXES (via gasoline taxes) is unmaintainable (pun intended). Those credits will

have to go away.

06 Aug 2013, 03:16 PM

FinancialTailor

You are correct that Tesla paid back their DOE loan, or more accurately, they refinanced the loan

in the open market. Tesla's primary subsidy comes from the state of California which created a

cap and trade system to sell ZEV (zero emission vehicle) credits. I believe the model S is worth

about 4 ZEV credits at 5k per credit. However, does not derive the full value of the credits

because they sell them in the market to the highest bidder. The more electric vehicles that are

available, the less that Tesla will receive in ZEV credits as supply is higher. There is also a

federal credit for purchasers of a model s of $7500, and additional state tax credits that vary by

state ($2500 in California). There are plenty more incentives and subsidies, but these are the big

ones.

06 Aug 2013, 03:24 PM

JPBark

So it is Telsa's fault that the other car company's where not making electric vehicles and needed

to buy credits? For if there was no market to sell the ZEV credits then Tesla could not sell them...

How is this any different then GE buying pollution credits so they do not need to change how they

currently do something?

06 Aug 2013, 03:32 PM

Dave_M

The absolute value of those incentives (or subsidies, as you call them) pales in comparison to

those received by the oil industry on an annual and sustained basis. You see, the $7,500 tax

credit is capped at (no more than) 200,000 vehicles. It could be less, since the buyer has to

qualify by owing at least that much in Federal Tax. Oil incentives have no cap or end date.

06 Aug 2013, 03:36 PM

rhyse12

Madhaus,

A) Currently, most of the battery can not recycled. Second, it's not cost effective to recycle the

parts that can be reused.

B) And they are VERY, VERY, toxic to construct.

C) Please don't write they are useful in grid storage. Yes, they are batteries. But you can also cut

a stone circle, and call it a tire. The efficiencies are about the same.


26/105

To say otherwise, is speak a lie. People making money on this stock is a good thing. People

making money is always a good thing. Your misinformed, or just lying about the battery. 5

minutes on google makes my case. Try not to use a tesla site, maybe a government or university

site...

If your gonna use the " green angle", that's laughable. 1/2 the power generated in the USA is via

coal. So its robbing Peter to pay Paul. At less then $4 gallon, the upfront cost vs the long term

savings in gas isn't there. The tesla site had a cost to lwn tool, that was mocked universally. Youpay $60+k, i will pay $30k. that extra $30,000 with come in handy. unless we are financing, then

the advantage to me is FAR greater. The price of gas might go up. But as the USA now exports

gasoline, that might take some time to arrive. Anybody see any oil around here- what is this

fracking thing I keep hearing about. Long term costs on the vehicle? Well there is NO service

record on the Tesla, so that's pure speculation. That Honda I dropped $30k on, it is basically

bullet proof. I tend to lean towards hard data, vs forecast with no actual basis.

It is interesting technology, but the economics don't work yet, and the stock price is a disaster

waiting to happen. Cash out, collect your $100/share profit. On 500 shares, that is the down

payment on a really nice house. You ventured, you gained. Congrats... But until that money is in

your hand, anything can happen. Recall, this a car company that in 10 years, has NEVER made a

profit making cars.. Continued success in your investments.

06 Aug 2013, 03:52 PM

Rik1381

"1/2 the power generated in the USA is via coal."

Nope, nationwide, it was down to 37% last year.

http://1.usa.gov/TasNhy

06 Aug 2013, 04:16 PM

trader57

videoman, I believe that later in this decade Tesla owners will be able to charge up their cars

using solar panels on the roof of their garage, and will thus have a zero marginal cost of energy

used to power their vehicles. Use of solar panels will then eliminate all pollution generated by

driving the Tesla vehicles. But this company faces great challenges in the future and it will be

difficult for Tesla to grow into its current valuation: the main challenges I see are increasing

competition from established auto companies such as Toyota and BMW, and the difficulty in

duplicating their current quality level and cost controls as they expand into a number of new

assembly plants. Tesla is going to need many outstanding managers to run all those plants and

manage a larger group of suppliers. The Asian auto makers, with their very low cost of capital,

vast experience in manufacturing, and low production costs, are eventually going to grind Tesla

down on pricing. Tesla may have a tough time matching their prices and selling enough vehicles
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to justify its current lofty valuation. And finally, there's the UAW lurking out there and probably

planning a drive to unionize Tesla's workforce, which could make it even tougher in the future to

match Toyota's production costs and prices.

But right now Tesla's stock chart tells me that it's way too soon to even consider shorting this

stock. Attempting to call the top is a dangerous losing game, especially in a heavily shorted stock.

TSLA may not be a good short until 2015 or even later. Eventually, someday, it's very likely to be

a good short, but I wouldn't short it until you see both: 1) a decisive turn toward in the technical

situation and the start of an established downtrend of lower lows and lower highs (...then short it

on a bounce back up), and 2) a major shift in the fundamental situation as seen in much more

pessimistic media coverage of this company. When the chart shifts into a medium-term

downtrend and the news media starts talking about how tough the competition is for Tesla, that's

when it is likely to become a good candidate for short sale. Shorting it now is a dangerous, low-

probability trade. There are many stocks already in downtrends that are much better shorts at this

time.

06 Aug 2013, 04:26 PM

dennisg13

The "freedom truth" is that the Volt is NOT an electric car, therefore it does NOT compete with

Tesla.

06 Aug 2013, 05:44 PM

Rik1381"videoman, I believe that later in this decade Tesla owners will be able to charge up their cars

using solar panels on the roof of their garage, and will thus have a zero marginal cost of energy

used to power their vehicles."

I already do that.

06 Aug 2013, 06:33 PM

rsu82

That is a good point. I know someone who works for the state department of transportation. High

gasoline price hurts their road maintenance budget. The reason is because the amount the tax a

gallon of gas is fixed. As the price of gas goes up people use less and their income from taxes

decrease and they have to shut down future projects.

In 2008 oil shot above $140 and gas went over $4 his department had to postpone many road

projects.

06 Aug 2013, 06:51 PM


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Tadpoles_UK

Keep dreaming, trader. From a practical standpoint, your reality isn't real.

First off, the majority of people will want to charge their electric car at night. Unless someone

invents panels that will generate power off of moonlight, that ain't happening.

Secondly, a commuter that puts in 40 miles/day requires 11 KWH of electricity, per Tesla's

website. A 200 sq.ft. set of panels will produce about 1.8 KW at current efficiency which is just

under 20%. Even if technology increases the efficiency to 30%, the only owners that will be able

to enjoy your scenario are the ones that can leave their car plugged in for four hours in the middle

of a sunny day.

Doable for those who happen to work the night shift and live in So Cal or Arizona.

06 Aug 2013, 11:52 PM

trader57

The Tesla has a range of over 200 miles on one charge, so I'm thinking people will be able to

charge it up on the weekends and drive it to work all week, if they live within 20 miles of their

workplace. If they're driving more than 20 miles each way to work, then obviously they'll have to

plug it into their wall socket by mid-week and charge it that way. Eventually the range should go

up and allow most owners to drive to work all week on one weekend solar charge-up. Also

obviously, solar charging won't work well in situations that have a lot of cloud cover and short

days, such as upstate New York in the winter. But solar charging on weekends should work well,

except during exceptionally dark cloudy weather, in most regions of America.

07 Aug 2013, 12:12 AM

madhaus

Say what? 200 square feet of panels? I have a 3.6 kWh system on my room, 17 panels over my

garage. It produces over 20 kWh a day in the summer. It only produces numbers like 11 kWh on

occluded days.

I don't know how many square feet of panels I have, but 10 x 20 is probably close to it. Where do

you get 11 kWh? Is that a system rating or a daily production rating?

Current PV efficiency: where did you get the 20% number? Sounds wrong to me. More like a 10%

loss than 20% efficiency (80% loss, absolutely not). Perhaps you're thinking of the 25% efficiency

of a gas-powered car.

In Silicon Valley, if you want a solar system connected to the grid, you have to do net metering.

You sell PG&E the power for their retail prices during the day and charge your car after midnight

when rates are much lower. So I sell them power for 28 cents a kWh and buy it back for the car

for 9 cents. Am I charging my car via solar? Indirectly. But the utility wants my excess power

during the day and is willing to pay for it accordingly. This helps prevent brown-outs when power


29/105

demand is too high.

I'm also tired of reading the silly complaints about coal-burning power plants. Where are the coal

plants? The Midwest, mostly. Where are people buying Teslas and other EVs? Pacific States, for

the most part, the ones that use very little coal. Also the mid-Atlantic coast, more coal but not

anywhere as heavy as the Midwest. Furthermore, coal use in power production keeps going down

every year, so EVs get cleaner and cleaner. That "dirty EVs" meme is a LIE put out by oil

companies, because EVs are a HUGE threat to their business model.

07 Aug 2013, 12:22 AM

trader57

Good post madhaus. The economics of solar panels improve greatly if you can sell the energy

you generate back to your utility. Also, eventually the range that people can drive on one charge

will be enough that most owners will be able to charge up their vehicles on the weekends and

then drive them all week to work on one charge.

07 Aug 2013, 12:27 AM

nwdiver

Charging @ night is great too... that's when the wind blows. They have so much extra power in

some areas they give it away.

http://bit.ly/13FaPL1

07 Aug 2013, 01:32 AM

madhaus

@rhyse,

A) The batteries can indeed be recycled. To say otherwise is just folly.

B) Define "toxic to construct." That's an assertion. Oil is toxic too, so on what grounds are you

claiming they are "toxic to construct." Are they more toxic than the harm done by oil exploration,

drilling, extraction, transportation, refining, distribution, pumping, or usage? Don't think so.

C) Of course they are useful in grid storage. What do you think Tesla is using in their Supercharger stations?

The person speaking lies may well be you. I don't know if you believe what you are saying, but

they are untruths nevertheless. You claim you can show this with "5 minutes on google" yet

furnish nothing. Because you have nothing.

The coal argument is laughable. Our utility says 1% coal in its energy mix (Silicon Valley area).

No coal in Seattle. Where do you think all those Teslas are getting sold, Kentucky?
http://seekingalpha.com/user/102302http://bit.ly/13FaPL1http://seekingalpha.com/user/10307771http://seekingalpha.com/user/3182991


30/105

Gas is more than $4 a gallon where I live.

How much do you spend a year to maintain your $30K Honda? It's got a lot more parts to have

problems with than the Tesla, or any EV, ever will. And how much energy do you waste driving it?

75% of the energy you generate is wasted as HEAT. The idea of calling an EV "dirty" is

laughable, when you measure what comes out of that Honda's tailpipe, and every other tailpipe of

every other gas vehicle.

Do you seriously propose there is no cost environmentally to oil exploration, drilling, extraction,

transportation, refinement, distribution, sale, and use? How about the TRILLIONS to maintain the

huge navy to ensure those shipping lanes stay open?

Do I see you complaining about the Hummer Tax Break that allowed a whopping $125,000

depreciation in a year on a heavy truck? It's called Section 179. That tax break still exists, and it's

$25K now, more than triple than the piddling $7500K EV tax break that has so many oil company

fanbois screaming about "unfair" subsidies. Yet none of them object to this tax break, nor the

billions of other tax breaks the oil industry gets while polluting our only planet.

What is this fracking you keep hearing about? Write back when your water supply catches fire.

This NYT report notes that energy companies tend to settle quickly to prevent details from being

publicly reported.

http://nyti.ms/15MHSMF

One thing I seriously don't get is why so many people supposed Americans so strongly object to

an American car company building cars here and using American energy to run them. It's almost

as if the complainers are rooting for the terrorists to win.

100 x 500 = 50,000, which cannot be a down payment for any house where I live. I do appreciate

the wish for success in investments and I certainly wish you the same. But if you don't understand

how startups work, you will lose your money if you bet against this company.

I'm still long. I cashed out on a September 115 option, and will go back in with more out of the

money options when there's another dip. I expect continued price increases on average for TSLA,

but the current price seemed to be time to take some easy profit.

07 Aug 2013, 01:52 AM

katgod

Many would argue that the Tesla tax rebate is a large subsidy and I would agree. Having said that

there are many tax subsidies for many industries like oil depletion allowance.

I don't know if these are good or not but only when we get rid of all subsidies including home

interest deduction should we complain about the Tesla tax rebate.

07 Aug 2013, 02:17 AM
http://seekingalpha.com/user/876542http://nyti.ms/15MHSMF


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kidrazor

If we're going to dream, imagine if someone invented something like a battery pack or household

generator that could store energy charged by solar panels, that way the car could transfer the

energy later? Seems like solar storage could be a game changer too http://www.goalzero.com

07 Aug 2013, 02:19 AM

katgod

If you really want to make it difficult to use solar then don't use more then a 1 sq. ft. solar panel.

07 Aug 2013, 02:23 AM

themodfather360

Almost everything you posted is incorrect.

07 Aug 2013, 02:42 AM

Nat Stewart, Contributor

Yea, but it is really fast, and in person a beautiful car to see and sit in. That makes up for allot of

sins. I have an appointment to test one - can't wait!

07 Aug 2013, 08:53 PM

Windsun33

"..I believe that later in this decade Tesla owners will be able to charge up their cars using solar panels on the roof of their garage.."

It won't happen, for several reasons.

1. Sun shines in the day, the car is being used in the day.

2. You would need around $25,000 in solar panels to charge it from 20% to 100% in 5 hours.

3. That would be a horribly inefficient way to use solar panels.

08 Aug 2013, 09:12 AM

Windsun33

That 200 miles is based on pretty good driving conditions. Change that to stop and go city traffic

in Phoenix in the summer when temps are in the 110-115 range, with the AC going and see what

you get for a range.

08 Aug 2013, 09:16 AM

Windsun33
http://seekingalpha.com/user/876542http://seekingalpha.com/user/387543http://seekingalpha.com/user/13949032http://www.goalzero.com/http://seekingalpha.com/user/387543http://seekingalpha.com/author/nat-stewarthttp://seekingalpha.com/user/192325http://seekingalpha.com/user/387543


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Current PV efficiency for off the shelf panels is around 13 to 15%.

08 Aug 2013, 09:18 AM

John Bingham, Contributor

Windsun33,

Wrong, wrong, and partly right.

Check with your utility and you'll probably find you can have a home solar system tied to the grid.

It works very much to your advantage.

In the daytime, when you're often out, you feed the excess power from your panels to the grid and

you get paid for it. The utility loves this because you are helping them, so you get a very good

rate per kWh.

Come the night when you are sleeping you use the cheap overnight tariff to charge the car.

What you get from the utility (thanks to your panels) will often more than offset the cost of

charging the car. Many Tesla owners are paid by the utility each month instead of paying them:

indirect solar charging plus pocket money for doing it! Tesla themselves do this with their

supercharger stations.

Using the AC in a Tesla is much more efficient than in a gas car. When you're stuck in traffic that

big ICE has to keep turning to generate enough power for the AC to run. So a big source of heat

is being used very inefficiently to run a cooling system! The source of power for your AC is your

gas tank, which equals loss of range.

Do the same in a Tesla and the motor only runs to move you, and very efficiently as well. If you're

not moving then the motor uses zero power.

Even if the AC is pulling 2 kW from the battery you would need over four hours of being stuck in

traffic to drop your range by 25 miles.

The one you got mostly right is PV efficiency.

Off the shelf panels are not very efficient, but there are better ones available, albeit at a higher

cost.

The best domestic panels are now at around 20% efficiency and work is being done to improve

on this. New techniques could yield up to 40% efficiency in the not too distant future. Very

expensive at the moment but if it can be brought to mass market then the price will drop.

08 Aug 2013, 10:56 AM

Dave_M

@Windsun33 - Comment from a Florida resident who actually has 8 months of real experience
http://seekingalpha.com/user/985856http://seekingalpha.com/author/john-bingham


33/105

owning a Model S. I can easily go more than 3 hours of highway driving at 70 mph (with the AC)

before refueling at a free supercharger.

Running the AC (in the Model S) has virtually no impact on fuel economy. It's pretty hot and

humid here, I've got the AC going all the time. Running the heater has a little more of an impact,

although the seat warmers reduce the necessity.

And stop and go traffic actually yields better fuel economy than driving down the highway at 70

mph. An even better fuel economy scenario would be highway driving at 55mph.

No need for guesswork, when you have folks with real world experience.

08 Aug 2013, 11:29 AM

fellows

Madhous...sorry man, but I have to bash your assumptions again. Yes Lithium can indeed be

recycled, but at this point its incredibly expensive to do so. Its much easier to recycle lead acid

batteries and its far more profitable. Therefore lithium will not be recycled even if it theoretically

can be. Its much cheaper and easier to mow down more rainforest in South America to get more

lithium.

Your utility may tell you its provided by less than 1% coal, but this is misleading. Your local power

plant isn't plugged directly into your neighborhood, its not quite that simple. Energy brokers can

buy energy from anywhere in the grid. While it may look appealing to see a bunch of windmills

dotting the landscape out of your window, chances are the additional energy we need is being

provided by 1920's era, oil fired, Mexican power plants.

While I don't own a $30K Honda, I do have a $25K Honda and I can look at my spreadsheet and

tell you exactly what I've spent in 4 years and 90K miles....$2600. About $1300 was spent on ICE

related cost (which include tire rotation which would be needed on EVs as well) and brakes (EV

owners assume regeneration gives them free brakes for life, so I've deducted this as well). I've

been out of warranty for quite a while, but if my window motor finally burns out, I know I can get

another one from Honda installed pretty cheap and quick. How quick do you think Tesla can get

something like that fixed? Of the past 4 ICE cars I've owned its always the little stuff like this that

breaks down, rarely does the ICE or related components have an issue. This ain't the 70's man.

While we're on the subject, I'm curious to know how much Tesla owners pay for insurance. Is

getting a Model S's headlight replaced after a fender bender cheaper than a BMW's?

Quick math says with my gas mileage and the cost of fuel where I live I've spent close to $9500 in

fuel over 4 years. I know electricity would cost something, but assuming its free (which EV

proponents like to assume) I'm still barely breaching $40K total ownership cost. If anything, the

Volt is looking like a better deal then a pure EV. Not to mention after 4 years, had my Honda been

an EV, I'd be looking for a new $12000 battery by now as my battery capacity will have dropped
http://seekingalpha.com/user/3676711


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far below that 300 mile range I would have originally been quoted. We've all been told the top

model Model S has a range of 300 miles, but Consumer Reports claims this is really 200 miles if

you drive it to conserve battery life with no AC or heat in moderate temperatures. I can't imagine

what a 4 year old Model S in the mountains in winter would get at interstate speeds, but I know I'd

need more than 40 supercharging stations and in winter I sure don't want to hang around 30

minutes to charge it up at one.

Again you bring up the so called TRILLIONS to maintain a huge navy to keep our shipping lanes

open for oil. I have some news for you. This has been the whole purpose of any navy since the

beginning of time, long before oil was a necessity. We trade in far more commodities than oil and

we're the world's largest economy so needless to say a large military is in our economic interest.

200 years ago the British navy was the largest in the world as they were the world's largest

economy...get how that works? Being familiar with world's seas myself let me enlighten you on a

little fact that there are no police out at sea. None. If someone is jacking your yacht, fishing boat,

or container ship you call the US Navy. From the Revolutionary War to the War on Terror, please

let us know how many of those wars, and necessary military involvement, were about oil? By your rationale, we should all drive EVs and let US shipping fend for themselves. Look around you, I

doubt you'll find more than 10% of your lifestyle being provided by 100% American labor or

resources. Wanna know where the plastics come from that make up the majority of your Model

S? What about the batteries themselves? We've already tried the isolationist route, and we've

seen where that's taken us.

Another thing that most EV proponents are hung up on is the efficiency argument. Yes its a well

known scientific fact that ICE's are less efficient than EV's. However, what's forgotten is the fact

that the EV's energy storage system is so inefficient compared to the ICE's. A gas tank is far lighter, simpler, smaller, cheaper, easily refillable, and has a lifespan of forever compared to a

battery. Tesla makes this situation worse with the "vampire load

tesla motors presents a terrific shorting opportunity - tesla motors (nasdaq_tsla) _ seeking...

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