October 10, 2013 – Vol.18 No.30
TESLA'S FREE EV.
by Bruce Mulliken, Green Energy News
I'm just speculating since I have no way of actually knowing, but I'm guessing most Tesla Model S owners also own stock in Tesla Motors.
Here's my thinking. The Model S, from its inception, was designed to be sold to the upper few percent: Folks that are considerably richer than I and drive much nicer cars. You know who they are: Those who have a portfolio of investments that are managed and watched closely by financial advisors and accountants, or by themselves if they are business savvy enough. The kind of people that watch every penny and make a buck wherever and whenever they can.
In general people don't just by products of the companies they hold stock in just in the hopes of helping the company the out and improving its stock performance. They buy the products for the same reason they bought the stock. They are true believers.
Still Tesla Motors is a little different than most companies.
Tesla Motors is a very small company as automakers go. Right now it's mostly a one product company with a product (that Model S) that's watched closely in the investment community. Every car sold is important to the company and helps the stock value increase a little more. The company's stock is soaring even with the fire that brought share prices down a bit.
Theoretically, depending on the size of the investment, those who bought Tesla Motors stock early on would have earned enough by now to pay for a car (or perhaps even a few cars) just with the profits earned in the sale of their Tesla Motors stock. (Should they decide to sell it of course.) If they did this they'd have a free Model S.
And there's more to the story. From the launch of the Model S, Tesla has gone out of its way to attract buyers willing and able to juggle the numbers to justify the purchase of the all electric car.
Tesla points out that savings are at every turn.
All together, turning all the savings and that buy-back program into numbers an accountant can understand, a Model S can be a very appealing package. Add to that the purchase and sale of Tesla stock and the Model S could be a very low cost car even for those who didn't buy that Tesla stock before it soared.
Tesla may not do as well when it expands its product line to more mainstream cars and its sales increase, but for now it's a hot niche-market company with one great product. Tesla was smart to go public even before (two years before) it had its first mass produced car available for sale.
There's a lesson to be learned here for other electric vehicle developers: Spin off your electric car division into an independent, publicly-owned company. Sell shares in the company. More than likely the same people who buy the stock will buy the cars or vice-versa, the people who buy the cars will buy the stock. Either way more cars will be sold. In Tesla's case, cars and shares go hand in hand, you can almost bet on it.
Green Energy News is not responsible for content on external websites.