Here are three Tesla Inc. facts. One, the company cannot increase production or the size of its facilities without outside help. Two; the energy company is still years away from profitability. And three; its share value is far to inflated and can’t be justified by the so-called “Elon Musk Premium”.
What cannot be denied is the obvious demand for fully electric cars. The days of this automotive market sticking to its niche are fading. This is a given. Nissan has sold over 283,000 of its fully electric vehicle since its launch in 2010. Tesla’s current offerings add up to just below that, while the Chevrolet Bolt and Volt are selling at increasing rates.
It is a given; the market is growing and growing fast. Consider the half a million orders for the Model 3, a car which Tesla just can’t push out fast enough. CEO Elon Musk says an average 1,800 Model 3 orders pour in daily, too. There is no disputing his company’s dominance of the expanding electric car market. But the market is only now coming moving into fruition. The answer to which carmaker will ultimately be on top is anyone’s guess.
There ought to be more concern about Tesla, Inc., though. The company’s financials do not even seem remotely appropriate for its share price. It learned earlier this year that high-value stocks come with very high expectations, too. Despite being in line with its own sales predictions, coming in at the very low end sent shares back to where they were at the start of the year. Investors seeking to gain off TSLA should understand that mediocrity does not cut it for a stock gunning for a 100 percent climb by year-end.
Tesla has a lot of fanfare backing its rise. There is more confidence in how the energy tech firm is performing now and not on how sustainable its efforts are. The company’s financials get thrown right out the window as soon as Musk steps up on stage promises something big. As such, people are investing their money without considering the finances. Instead, they only hope that Tesla will gain the most out of the booming EV segment.
Blind Trust Makes Tesla, Inc. An Overblown Risk (NASDAQ:TSLA)
The company stock is also bumped up by mislabels like “the best-selling electric carmaker”. Sure, the company’s cars are selling fast, but that title belongs truly belong Renault’s Nissan Leaf. Beyond that, investors would think is outdoing the EV market by a landslide. That is not the case, though.
At look at EV-Sales Blog’s findings reveals that the Model S has the Chevy Volt hot on its heals in terms of 2017 sales. Toyota’s Prius sells more than the Model X, too. Granted, that is not fair comparison, but the point is that Tesla does not widely outsell every other hybrid or EV automaker out there. The Bolt is speeding up sales as well and has raked in 11,670 this year-to-date.
Investors can appreciate Tesla, Inc. and what the company seeks to achieve. That does not mean they can’t be skeptical of its offerings, weak financials, reliance on external financing, and overblown share price.
In other news, the Tesla, Inc. vice president of Business Development left the company this week. Diarmuid O’Connell has been with the energy tech giant almost since inception. His position will now be handled Jon McNeill, who is Tesla’s current president of global sales and services.