COMPANY DESCRIPTION

Tesla Motors designs, develops, manufactures and sells electric vehicles and electric vehicle powertrain components. Co. is producing and selling its Model S sedan and Tesla Roadster electric sports car. In addition, Co. provides services for the development of electric powertrain systems and components, and sells electric powertrain components to other automotive manufacturers. Co.'s electric powertrain consists of the following: battery pack, power electronics, motor, gearbox and the control software which enables the components to operate as a system. Co. sells and services its electric vehicles through its sales and service network in North America, Europe and Asia.

 

ECONOMIC MOAT

We do not see a moat yet at Tesla Motors.  Tesla's battery plant will definately contributes to estabilising a future moat. Tesla has said that when its gigafactory--a lithium-ion battery plant under construction in Nevada--is fully operational by 2020.  Telsa is quickly becomming a brand of the affluent who want to differentiate there lifestyles from other affluent consumers. CEO, Elon Mush has Steve Jobs-like moxy.

 

OUTLOOK

Tesla Motors experienced a flat tire recently.  While hitting its production targets it fell short on sales.  Weakness in China is also concerning.  CEO, Elon Musk has said that China represents Telsa’s largest foreign market potential.  Competition in the electronic car market is mounting.  The company has broken ground on its Gigafactory. The company anticipates the facility will be up and running sometime in 2020. After, Tesla will also be able to market and sell its lithium to other parties, opening up a potentially lucrative new revenue stream. Telsa’s stock is aggressive and richly valued.  Portfolios built for long-term growth may want to invest ahead of the future execution and results.

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STRENGTHS

  • The cost advantage of recharging over gasoline is significant, and gas will probably never be able to catch up. Furthermore, the instant torque of Electic Vehicles makes them fun to drive, as the vehicle is always at full power.

WEAKNESSES

  • Mass Electic Vehicle adoption by consumers could be many more years away than Tesla expects. If demand does not materialize, the company is likely to struggle to recoup the costs of the gigafactory.

THREATS

  • Investing in Tesla carries tremendous uncertainty. The market has very high expectations for the stock, so a slowdown in growth could lead to a severe decline in the stock price.

  • The success of Tesla's move into energy storage is highly uncertain.

OPPORTUNITIES

  • Tesla has the potential to change the world with long-range Electic Vehicles technology and battery technology that can store solar energy.

The above report is for information purposes only, and is not a solicitation or offer to buy or sell any securities. Past performance is no guarantee of future performance. Neither diversification nor asset allocation ensures a profit or guarantees against loss. Before investing, investors should consider their risk tolerance, investment objectives, time horizon, available capital, and charges and expenses.  

 

The information presented in this report has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guranteed. All material is subject to change without notice. The views and opinions expressed are those of Focused Stock Research and/or WALT ST Investment Management, Ltd. and in no way reflect the views and opinions of Investment Consultants nor their Broker Dealers.

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