Tesla Motors Inc (TSLA) Shorts: Who Should Watch Out?

The bigwigs should watch out

The populist argument has been that Tesla is far behind bigger competitors General Motors Company (NYSE:GM) and Toyota Motor Corporation (ADR) (NYSE:TM). Indeed, these two have the edge on most accounts. General Motors Company (NYSE:GM) for instance, increased its April China sales 15% to 261,870 units. Back in March, the Cadillac maker managed to increase its China sales by 13%. In fact, the head of General Motors Company (NYSE:GM)’ operations in China, Bob Socia, is ‘cautiously optimistic’ that sales in China will hit 3 million units by the end of 2013.

Toyota Motor Corporation (ADR) (NYSE:TM), however, saw a continued dip in China sales. Its sales fell 6.5% to 76,400 units in April, marking the ninth drop in 10 months. Toyota’s lackluster performance in China is largely due to geopolitical headwinds in the region. Nonetheless, the Japanese automaker still remains the world’s top automaker by virtue of sales.

Performance in China is a key indicator as it is the biggest automobile market in the world.

I don’t see Tesla catching up anytime soon. What I however see is prolonged persistence and a chance to create its own market; a chance to revolutionize the automobile industry as we know it. Already, Tesla CEO Elon Musk has amended the financing deal for Model S. The amended financing deal will allow Tesla to gain more traction among middle income consumers. Under the amendments, the repayment period will be 72 months rather than the previous 63 months. The resale value of Model S will also top other luxury cars in its segment.

Tesla Motors Inc (NASDAQ:TSLA)’s bid to enhance innovation in the automobile industry is its ticket to unprecedented highs. This, coupled with the fact that it has plans of roping in middle income and budget tended consumers, should bring huge sales in the future. Go long on Tesla.

The article Tesla Shorts Will Be Disappointed originally appeared on Fool.com and is written by Lennox Yieke.

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