Despite Its Recent Growth, Tesla Motors Inc (TSLA) Is Still Investable

Page 1 of 2

Tesla Motors Inc (NASDAQ:TSLA) shareholders have experienced more than a 250% increase year to date. Some may argue that the stock is now overpriced for value investors. Tesla Motors Inc (NASDAQ:TSLA) has exceeded the expectations of a lot of people so far, but will the company be as successful in the long run as it has been recently?

Debt elimination

Tesla Motors Inc (TSLA)Despite the incredible success that Tesla Motors Inc (NASDAQ:TSLA) has seen, the electric vehicle pessimists of 2012 still exist today. Throughout the past year, Tesla Motors Inc (NASDAQ:TSLA) has overcome many obstacles, beginning with its debt.

In the presidential debates of 2012, Mitt Romney listed Tesla Motors Inc (NASDAQ:TSLA) as one of the “losers” in green energy and blamed the Obama administration for supporting the company. Romney probably didn’t anticipate that Tesla Motors Inc (NASDAQ:TSLA) would pay off its $451.8 million loan from the Department of Energy within the next year. In fact, after interest, American taxpayers ended up with a $20 million profit from the deal. This makes Tesla the first American automobile company to re-pay the government in full.

We all know about the $49.5 billion loan the U.S. Treasury gave to General Motors Company (NYSE:GM) in 2009. Despite GM technically paying this debt off, it may never actually be paid off in full.

Of the total money the government invested in General Motors Company (NYSE:GM), there is approximately $20 billion outstanding; the Treasury Department plans to sell off the rest of its stock by the beginning of 2014. It still owned 277 million shares of GM in February, but to make the math work, the average sale price of those shares would need to be $72. In other words, the stock would need to double from its current price just to break even. Fool contributor John Rosevear believes that, when all is said and done, the Treasury Department will end up $12 billion short.

I’m not excluding Ford Motor Company (NYSE:F) from this discussion, because in 2009, Ford received a $5.9 billion loan from the Department of Energy. Ford Motor Company (NYSE:F) still owes money on this loan, which is expected to be paid off ahead of schedule. Clearly, it won’t be paid off nine years ahead of schedule, like Tesla has done.

Clearly, Tesla has provided the best value for the American taxpayers, but its growth potential may be even more impressive.

Growth potential

Electric vehicles could be one of the largest growth trends over the next 10 years, and Tesla is leading the way. Through the first half of 2013, Ford’s electric-drive deliveries were 46,197. Baum & Associates estimates that, when compared to the year-ago period, electric-drive sales were up 27% in the first half of 2013.

Tesla only sold a few hundred vehicles in the first half of 2012, but according to Autodata, it appears to have sold of over 8,900 in the same period of this year. In fact, Tesla sold more vehicles in Q1 of 2013 than it did for the entire year of 2012. Sales increased by approximately 83% over the quarter before.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!