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Tesla Motors Inc (TSLA): The Only Automobile Manufacturer I Would Invest In

There is one company that has got me excited recently. Its enormous growth potential, performance, and unique valuation lead me to believe there is money to be made for years to come. Other companies sell more vehicles, have bigger names, and are currently more profitable, but over the next few years, there is more than enough opportunity for Tesla Motors Inc (NASDAQ:TSLA).


Ha! Not for Tesla Motors Inc (NASDAQ:TSLA). Just a few weeks ago, it completely paid off its 2010 loan from the Department of Energy with a wire of $451.8 million. Reports claim that Tesla was the first American automobile company to fully re-pay the government.

General Motors Company (NYSE:GM) has “officially” paid off its $49.5 billion loan that it received in 2009 from the U.S. Treasury Department. The key word there is officially. Some of it was paid off in cash, and some of was paid off through shares of its stock. The problem is GM’s stock will have to increase dramatically (likely by the beginning of next year when the Treasury Department plans to sell off the last of the stock) to actually cover the full amount owed.

Tesla Motors Inc (NASDAQ:TSLA)There is approximately $20 billion outstanding. In February, the Treasury Department still owned 277 million shares of General Motors Company (NYSE:GM). To make the math work, the average sale price of those shares would have to be $72/share. Currently, the stock is trading in the mid $30 range. The reality of the situation leads us to believe that approximately $12 billion of that loan will never be received.

Ford Motor Company (NYSE:F) received a $5.9 billion loan in 2009 from the Department of Energy to work on more efficient models of cars. Its first payments on these loans are due in September of this year, with interest. Ford plans to pay off these loans well ahead of schedule, but has not paid it off yet.

Growth potential

Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) have likely seen their best growth years already, while Tesla Motors Inc (NASDAQ:TSLA) is just starting to gain traction. I dug around for a while and found some of these companies’ best growth numbers in recent times.

For the year 2012, Ford Motor Company (NYSE:F) experienced an increase with cars up 5%, utilities up 7%, and trucks up 2%. The company experienced the strongest December since 2006 with total company sales up 2%. June proved to be a big month for General Motors Company (NYSE:GM) in 2013. Combined sales of GM’s mini, small, and compact cars were up 59% when compared to June of 2012.

That’s a little more impressive. On General Motors Company (NYSE:GM)’s website, it states that Cadillac was the industry’s fastest-growing luxury brand with a first-half sales increase of 33% in “Calender Year-to-Date Sales Highlights (vs 2012).”

While those are some impressive figures, none of them compare to the growth of Tesla Motors Inc (NASDAQ:TSLA). In the company’s first quarter this year, sales increased 83% over the quarter before. In fact, the company sold approximately 4,900 vehicles. That may not sound like a lot, but the company sold more cars in 2013’s first quarter than it did for the entire year of 2012. The company expects 21,000 deliveries this year, but may even crush that figure at this rate.


I debated even including this section for the simple fact that it won’t seem fair. Don’t get me wrong, in the past year, both Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) have seen their stocks increase nearly 77% and 74%, respectively. How can you be disappointed with that? Well, compare it to Tesla Motors Inc (NASDAQ:TSLA)’s 288% in the same period of time, and it seems minimal.

If we cut the time frame down a little bit, the growth is even more impressive. In the past three months, General Motors Company (NYSE:GM), Ford Motor Company (NYSE:F), and Tesla Motors Inc (NASDAQ:TSLA) have seen their stocks increase 28%, 30%, and 201%, respectively. The chart below shows how these companies have done Year-to-Date.

F data by YCharts

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