Tesla Motors Inc (TSLA): The Long-Term Thesis

Tesla’s growing network of Supercharger charging stations will provide another long-term competitive advantage. Toyota Motor Corporation (ADR) (NYSE:TM), General Motors Company (NYSE:GM), and others have largely shied away from fully electric vehicles, prioritizing plug-in hybrids instead, since they don’t cause “range anxiety”. However, this means that after a short drive in fully electric mode, you just have an overly expensive hybrid.

Tesla has taken a completely different approach. It has built several “Supercharger” stations in strategic locations on the east and west coasts where Tesla owners can “refuel” their cars relatively quickly — and for free. As Tesla gains more scale and continues to roll out Supercharger stations, it could ensure that Tesla cars are the only fully electric vehicles that are viable for long-distance travel. That could give Tesla pricing power that one rarely sees in the auto industry.

Foolish conclusion
Tesla is leading the electric car revolution, while building a potentially durable moat through its proprietary powertrain technology and Supercharger network. If Tesla Motors Inc (NASDAQ:TSLA) can follow through on its goal of making electric cars affordable for mainstream consumers, the company could gain a dominant share of a large addressable market. This suggests that Tesla will continue to be a long-term winner.

The article Tesla Continues to Shine: Is the Sky the Limit? originally appeared on Fool.com and is written by Adam Levine-Weinberg.

Motley Fool contributor Adam Levine-Weinberg has no position in any stocks mentioned. The Motley Fool recommends General Motors and Tesla Motors. The Motley Fool owns shares of Tesla Motors.

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