Tesla still isn’t selling nearly as many cars as Ford or GM, and competition for green car credits is heating up.
The recovery of the US auto industry is increasingly undeniable. Sales growth for the major American firms, Ford Motor Company (NYSE:F), General Motors Company (NYSE:GM), and Chrysler was announced this morning and all three are posting double-digit growth. Many car manufacturers are calling this their best summer since 2006. Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) both posted sales gains of over 20% across all of their brands, from hybrid to luxury, as overall auto sales for the country peaked out over 16 million. Which begs an important question: with established competitors back on the rise, will upstart Tesla Motors Inc (NASDAQ:TSLA) have to sell more cars to justify its stock price?
Click on the interactive charts below to see data over time.
Tesla Motors Inc (NASDAQ:TSLA) is the best performing large-cap so far this year, by a lot. Its price has gained 410% this year, edging out the second fastest growing large-cap, Netflix, Inc. (NASDAQ:NFLX) by over 100%. It garnered consistently good press all summer – including an impressive safety rating for the Model S, which completely totaled the crash-simulator. And let’s not forget Elon Musk’s entertaining side projects, like the Hyperloop. Tesla Motors Inc (NASDAQ:TSLA)’s much lauded marketing strategy, which involves placing show-rooms in malls and shopping areas where they are much closer to consumers, has vaulted the Model S to be the third biggest selling luxury car in the country.
However, Tesla Motors Inc (NASDAQ:TSLA) still has a lot of problems, prompting many bears to take short positions in the company. Tesla’s upward momentum has led a lot of the short-sellers to cover, but about 10% of the company’s float remains on borrowed shares. That’s down significantly from where it was in January, indicating more people are willing to wager that Elon Musk will follow in the footsteps of Steve Jobs – creating a new market and then dominating it – as Apple was able to do with smartphones. Tesla Motors Inc (NASDAQ:TSLA)’s bulls point to the car’s battery, by far the best in the industry in charge-time and range. And the company’s capital is higher than expected thanks to the incredible valuation. But as always, there are detractors on the other side.
That’s because Tesla Motors Inc (NASDAQ:TSLA) is still not making any money off selling products to consumers, if you apply Generally Accepted Accounting Principles (GAAP). According to the company it made about $26 million in the second quarter of this year.