According to the results of a recent poll conducted by TheStreet, in which 1,600 people participated, 1,095 of them prefer the Tesla Motors Inc (NASDAQ:TSLA) Model S over the vehicle that Apple Inc. (NASDAQ:AAPL) is currently working on (which of course, very little is known about at this point).
Just last year, Tesla Motors Inc (NASDAQ:TSLA) built 35,000 Model S cars, but according to CEO Elon Musk, the company is ready to spend an astounding amount to make the electric cars available to the mass market this year. In order to do that, the company has announced that this year it will be spending $1.5 billion. And in order to justify the enormous expenditures of capital, Musk said that the company could become like Apple Inc. (NASDAQ:AAPL) when it comes to valuation.
“If you take this year’s revenue, around $6 billion or thereabouts, and if we are able to maintain a 30% growth rate for 10 years, add to your 10% profitability number, and have a 20 P/E, our market cap would basically be the same as Apple’s is today. That’s going to require a bit of, on the order of $700 billion. Obviously, getting there will require some significant CapEx, but I am hopeful that we can do this without any significant dilution to the company, maybe minor dilution but nothing serious,” Musk commented.
This could make some analysts and investors go crazy but this was not the case. The analyst for Morgan Stanley, Adam Jonas, agreed.
“Given the opportunity Tesla has to burrow into an auto industry ripe for change, we are comfortable with the firm’s spending ambitions… The proof will come in Tesla’s ability to continue to bring to market innovative vehicles that bring a customer and technological experience unlike any other vehicles on sale by rival auto firms,” Jonas wrote in a research note.
The Model S car from Tesla Motors Inc (NASDAQ:TSLA) has won many awards as “car of the year” since it first came out in 2012, setting a difficult precedent for the Apple Inc. (NASDAQ:AAPL) car to match when it comes to market.
Only 359, or 22% of the people that answered the poll said that they would like to own a car made by Apple Inc. (NASDAQ:AAPL) over the Tesla Motors Inc (NASDAQ:TSLA) Model S, or any other electric vehicle. But Apple’s car has no launch date just yet, so it looks like there’s a great opportunity for the company. Only about 7% of the people who answered the poll said that they’re not interested in owning any electric vehicle.
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