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Tesla Motors Inc (TSLA): Another ‘Green Car’ Startup Hits the Wall

The upshot: Tesla notwithstanding, sarting a car business is really, really hard
Fisker’s experience points to just how hard it is to launch a new automaker from scratch. While Tesla Motors Inc (NASDAQ:TSLA) is on the verge of a profitable quarter, thanks to near-flawless execution on an audacious business plan, Tesla Motors Inc (NASDAQ:TSLA) is really the exception that proves the rule.

The last automaker to be started from scratch and become an enduring presence on the global stage before Tesla Motors Inc (NASDAQ:TSLA) was tiny supercar maker Lamborghini, way back in 1963. Lots of ventures have been tried since then. But as Fisker’s experience shows, the obstacles to success are formidable.

Designing and building cars to modern global standards of quality, reliability, and safety is hard, as several Chinese automakers have discovered the hard way.

Securing the funding to take a car from design to production — a process that can take years, and require big investments along the way — and securing the necessary government approvals to offer the car for sale are also daunting tasks for anyone who isn’t an established global automaker.

So far, Tesla Motors Inc (NASDAQ:TSLA) has succeeded where Fisker and countless others have failed. But even for Tesla Motors Inc (NASDAQ:TSLA), a still-tiny player in an industry dominated by global giants, the challenges ahead remain formidable.

The article Another Green-Car Startup Hits the Wall originally appeared on Fool.com.

Fool contributor John Rosevear has no position in any stocks mentioned. Follow him on Twitter at @jrosevear. The Motley Fool recommends BMW and Tesla Motors and owns shares of Tesla Motors.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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