Tesla Motors Inc (TSLA): Will Accelerated Growth Push This Expensive Stock Higher?

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While Tesla Motors Inc (NASDAQ:TSLA) essentially has to start from scratch, both General Motors Company (NYSE:GM) and Ford are massive companies with extraordinary technology and an expansive ecosystem. GM and Ford Motor Company (NYSE:F) both have large networks of dealers and auto shops, meaning it would be much easier for either company to quickly incorporate charging stations for electric vehicles into these established locations, thus making an electric vehicle from either Ford or GM more convenient for consumers.

Final Thoughts

What most people don’t realize is that GM is not far behind Tesla in the electric vehicle market. Tesla’s Model S sold 8,850 units in the first five months of 2013, and Chevy’s Volt sold 7,157 in the same period. Yet, GM has not seen the same level of excitement for its success. In fact, many have viewed the Volt as a disappointment.

The fact of the matter is that this market is growing rapid, and Tesla Motors Inc (NASDAQ:TSLA) is going to face real competition. NY Daily News estimates that by 2020, the U.S. could see electric vehicle sales of 1.8 million annually. Currently, U.S. auto sales are expected to be more than 15 million in 2013, and are expected to grow to 17 million by the end of the decade.

Last year, electric and plug-in hybrid auto sales totaled just 0.02% of all passenger car sales, but if expectations are correct, in 2020 roughly 10% of sales will be hybrid or electric. As a result, Ford Motor Company (NYSE:F) and GM might be the most attractive investment opportunities to capitalize on this space due to their resources, ecosystem, and their ability for mass production. Not to mention that Japan and China control almost half of the electric vehicle market, and both Ford and GM have strong footprints in both regions. Tesla does not!

In the end, Tesla Motors Inc (NASDAQ:TSLA) has done what neither GM nor Ford were able to accomplish: it has created excitement around the electric vehicle concept. The problem is that all the upside appears priced into its stock — or at least the majority – and now that GM and Ford Motor Company (NYSE:F) know what the consumer wants, I expect both to become more competitive.

The article Will Accelerated Growth Push This Expensive Stock Higher? originally appeared on Fool.com and is written by Brian Nichols.

Brian Nichols owns shares of Ford. The Motley Fool recommends Ford Motor Company (NYSE:F), General Motors Company (NYSE:GM), and Tesla Motors . The Motley Fool owns shares of Ford and Tesla Motors Inc (NASDAQ:TSLA). Brian is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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