Tesla Motors Inc (NASDAQ:TSLA) has been enjoying a huge bull run this week thanks to some hugely positive news, including the company’s first quarterly profit in the company’s history and a near-perfect score by Consumer Reports. The stock has shot up 40 percent in the last three days thanks to this news, and the momentum just continue to roll like a festival day in Pamplona.
But of course there are some bears out there who are ardently warning investors in the streets, don’t get gored by the Tesla Motors Inc (NASDAQ:TSLA) bulls. Get out of the way when they’re running this hard.
The bears are saying that while this nice run by Tesla is great not only for the luxury car market, but also for electric cars in terms of pushing the competitive envelope, the fact that the electric-car market is so pricey that the shelf life of a company that only caters to the higher-net-worth, higher-income set will mean that Tesla Motors Inc (NASDAQ:TSLA) may very well hit its ceiling sooner rather than later. Electric is expensive and is foreseen to be so for the foreseeable future.
Bears would say that Tesla would need to diversify its lineup beyond the Model S and the upcoming Model X crossover vehicle in order to be sustainable as a company – and it will have to produce cars in lower price ranges in order to be a viable car company for the future.
However, Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk was on the record a few weeks ago saying that very thing. Having a more affordable electric car for the masses is what will likely make the concept of electric cars more possible in the future. But bears say the only way to make a more affordable electric car is by making a hybrid but disguising it. Really? Musk said a few weeks ago that after the Model X comes out, Tesla will put out a mid-range electric that will retail for about $30,000 in 2013 dollars – and that it will hit showrooms within four years.
What do you think? Is a $30K electric car possible, with the now-high expectations of Tesla Motors Inc (NASDAQ:TSLA) quality? and if such a car did exist, do you think it would transform the car industry, or do you think consumers won’t really buy the vehicle?
Musk seems to be gambling that consumers will and do want electric – that there is pent-up demand because of the current price points. Do you think he’s right? Let us know in the comments section below.