Some complain that Tesla Motors Inc (NASDAQ:TSLA) is trading too high, at a P/E of over 90. I beg to differ. Tesla has gotten nothing but great press lately, and why shouldn’t they? A 99 out of a 100 by Consumer Reports, AND Motor Trend’s Car of the Year, I mean wow! People are raving about the performance and beauty of this car, so what was that last point out of a hundred? Battery charging and range.
Musk The Magnificent
Well good thing Elon Musk, being the genius he is, knew that this was going to happen and decided to build in the possible battery swapping technology in every single Model S, even the ones built before anyone even knew Elon had been thinking about coming out with battery swapping. So what does Consumer Reports have to say now?
My guess is that Tesla Motors Inc (NASDAQ:TSLA) will keep most of its charging stations with just the super chargers, while upgrading the ones on interstates to have the battery swapping ability as well. This allows drivers of Tesla’s to fill up their battery (swap) faster than someone could fill up their tank of gas. This confirms Elon Musk’s tweet over a month ago saying that soon Tesla Motors Inc (NASDAQ:TSLA) drivers will be able to fill up their battery faster than ICE’s can fill up their gas tank. I was slightly misled, thinking that when Tesla announced beta testing for superchargers, decreasing full charge time from 1 hour to 20 minutes, that’s what he meant by the super-fast charge time. But of course Elon Musk comes in with a surprise.
Beware the Giants
Its true Tesla Motors needs everything to go right for it for the valuation to hold true. Ford Motor Company (NYSE:F), Nissan Motor Co., Ltd. (ADR) (OTCMKTS:NSANY), and General Motors Company (NYSE:GM) all have respective electric vehicles, but let’s take a look at those. Ford has the Ford Motor Company (NYSE:F) Focus Electric that goes about 76 miles in a charge, Nissan has the Nissan Motor Co., Ltd. (ADR) (OTCMKTS:NSANY) Leaf that goes about 75 miles, and Chevy has the Volt that goes about 30 miles before switching to an ICE. These also don’t have either supercharging capabilities, or battery swapping capabilities. Ford, General Motors Company (NYSE:GM), and Nissan all are well established automotive manufacturers who seem to be sticking to their roots. With a solid P/E of 10, Ford Motor Company (NYSE:F) seems like a good investment for the 60 year old investor looking for a nice dividend on a safe stock. Tesla Motors Inc (NASDAQ:TSLA) isn’t a safe stock, and that’s what makes it so sexy.
If we can’t even compare the vehicles produced between Tesla and Ford, Chevy, and Nissan Motor Co., Ltd. (ADR) (OTCMKTS:NSANY), why are we comparing their share prices and P/E? It’s like comparing an iPhone to a walkie-talkie. Actually wait, it’s like comparing a Tesla to Ford Motor Company (NYSE:F)– that seems about right. Tesla Motors Inc (NASDAQ:TSLA) is on a whole new plane, and everyone shorting Tesla Motors Inc (NASDAQ:TSLA) because its P/E is way off course from the average automotive company is in for a rude awakening, because guess what, Tesla isn’t the average automotive company.