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
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.
