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"Cars can’t fly. But Tesla Motors, the electric sports car manufacturer, continues to defy gravity. Its stock has risen six-fold in the past year, giving it a market capitalization of $22 billion. That’s stunning, especially given that Tesla sells only about 2,000 cars per month and last quarter reported a $70 million profit."
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"Tesla’s continuing rise is angering electric car haters, auto dealers (who have sought to keep Tesla’s direct-sales model out of several states), and investors who focus on fundamentals. A hedge fund manager I know hisses the word “Tesla” with the same mixture of fear and annoyance that Jerry Seinfeld used to deploy when he said, “Newman.” Indeed, it’s hard to escape Tesla and its founder, Elon Musk. While others are contracting in Europe’s poor car market, Tesla is expanding. It opened a plant in the Netherlands last month. In the first half of September, Tesla was the leading car seller in all of Norway, with 322 units sold. It’s building out its supercharging network in California. This spring Tesla repaid its loan from the Department of Energy several years early and raised $1 billion in private capital. Earlier this month, the media dutifully covered the news that Musk would drive his family cross-country in a Tesla.
But Tesla’s stock and its vehicles aren’t just driving people to distraction. Tesla, the stock and the phenomenon, is having an impact far beyond the 2,000 cars it sells. Rather, this tiny tail of the car industry is starting to wag the dog. Innovation happens when start-ups get huge—think of Google or Facebook or LinkedIn. But it also happens when giant incumbents decide they want to be part of something new. And that is happening, thanks to the success of Tesla. Larger auto companies, which generally have remained aloof from the electric car industry, are now actively seeking the, um, juice and earnings valuation that Tesla has."
"Cars can’t fly. But Tesla Motors, the electric sports car manufacturer, continues to defy gravity. Its stock has risen six-fold in the past year, giving it a market capitalization of $22 billion. That’s stunning, especially given that Tesla sells only about 2,000 cars per month and last quarter reported a $70 million profit."
.....
"Tesla’s continuing rise is angering electric car haters, auto dealers (who have sought to keep Tesla’s direct-sales model out of several states), and investors who focus on fundamentals. A hedge fund manager I know hisses the word “Tesla” with the same mixture of fear and annoyance that Jerry Seinfeld used to deploy when he said, “Newman.” Indeed, it’s hard to escape Tesla and its founder, Elon Musk. While others are contracting in Europe’s poor car market, Tesla is expanding. It opened a plant in the Netherlands last month. In the first half of September, Tesla was the leading car seller in all of Norway, with 322 units sold. It’s building out its supercharging network in California. This spring Tesla repaid its loan from the Department of Energy several years early and raised $1 billion in private capital. Earlier this month, the media dutifully covered the news that Musk would drive his family cross-country in a Tesla.
But Tesla’s stock and its vehicles aren’t just driving people to distraction. Tesla, the stock and the phenomenon, is having an impact far beyond the 2,000 cars it sells. Rather, this tiny tail of the car industry is starting to wag the dog. Innovation happens when start-ups get huge—think of Google or Facebook or LinkedIn. But it also happens when giant incumbents decide they want to be part of something new. And that is happening, thanks to the success of Tesla. Larger auto companies, which generally have remained aloof from the electric car industry, are now actively seeking the, um, juice and earnings valuation that Tesla has."
