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Tesla Motors Inc (TSLA) Saves Lives, But It Could Get Doomed

Aman Jain

Tesla Motors Inc Model S offers high-level of safety to its owners, and two recent incidents prove this. The first involved a high-profile Hollywood executive while the other involved a woman and a child.

Tesla motors inc model s

Tesla Motors is saving lives

Jeffrey Katzenberg, the CEO of DreamWorks Animation, credited Tesla for saving his life, and thanked CEO Elon Musk while speaking to Hollywood Reporter. In reply, Musk tweeted on Oct 27, “Compliment from Jeffrey is much appreciated, but the people of Tesla deserve all the credit.”

Katzenberg was involved in a car accident on Oct 19 in the Beverly Hills area after which he was admitted to the Cedars-Sinai Medical Center. Katzenberg suffered injuries on arm and wrist. The Model S he was driving was destroyed, but it saved his life.

In another life-saving incident, a Model S got caught in a landslide, and a huge tree fell on the car, crushing it completely, but no harm was done to the woman and child inside the car. Green Car Reports, who reported on the incident, said, “Despite the Model S itself getting crushed, its two occupants apparently made it out intact.”

The publication further said that a thousand lines of ad copy cannot create an impression as big as a car protecting its occupants in a crash.

Tesla Motors in deep trouble

Even though Tesla Motors Inc cars are saving lives, one auto expert feels the firm is doomed. Bob Lutz spoke about Tesla Motors in the current issue of Road & Track, saying its high-time Tesla should stop losing money on every car it builds. He said the firm is showing all the signs that are specific of a company in trouble i.e. bleeding cash, securitized assets and mounting inventory.

“It’s the trifecta of doom for any automaker, and anyone paying attention probably saw this coming a mile away,” Lutz said.

Lutz also does not approve the way Tesla Motors markets its cars. Though he appreciates Musk’ approach of selling cars through own stores rather than dealers. He believes that emulating Apple won’t help Tesla as there is a huge difference in selling cars and selling electronics as fixed costs are higher in the former.

We’ll be able to see how Tesla Motors cash burn was in the third quarter when it reveals its earnings numbers for the three months on November 3. Wall Street is, by and large, looking to see a fairly vicious cash burn, given the Model X problems in the quarter.

On Tuesday, Tesla Motors Inc shares closed down 2.28% at $210.35. Year to date, the stock is down over 5% while in the last one-month, it is down over 18%.

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Aman Jain

Aman Jain

Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.