Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Tesla Motors Inc (TSLA)’s Not Going To Sell 500,000 $100,000 Cars: Matt DeLorenzo

Tesla Motors Inc (NASDAQ:TSLA)’s CEO has been said to be a unique combination Walt Disney, Steve Jobs and Thomas Edison, as Cory Johnson cited a “brilliant guy”, but the firm’s share price is similar to a grasshopper movement pattern. Ahead of the financials the company lost almost $8 a share or 3.33% of its price, so it’s pretty obvious that few believed in Elon Musk’s creation. It was promised that their Model 3 will sell at about $35,000 then it was restated as being closer to 50,000. However, the only car that is being sold by Tesla Motors Inc (NASDAQ:TSLA) is the Model S that ranges from $74,570 to $105,670, according to their official website.

Tesla, is TSLA a good stock to buy, Phil LeBeau

Obviously, the company will have to lower their targets, but that will pose other constraints on the Palo Alto, California-based manufacturer, so it will take some time till we see a Tesla Motors Inc (NASDAQ:TSLA) in the best selling cars’ list.

“There certainly will be more competition. They’re going to have to come down market, if they want to increase volume. Elon Musk has said that they want to sell 500,000 cars. They’re not going to sell 500,000 $100,000 cars, so they need to get down below $50,000 with volume model, but then they’re going to hit all sorts of competition,” said Kelley Blue Book’s Matt DeLorenzo.

Tesla Motors Inc (NASDAQ:TSLA) is not actually losing money as it has a gross margin of 22.6%, which is somewhat larger than what other automotive giants have. Nevertheless, this percentage level is not sustainable because Tesla Motors Inc (NASDAQ:TSLA) is practically obligated to start selling in large numbers, before thinking about profitability in terms of margins. The company’s stock is up about 53.5% year to date, although it showed a $75 million loss for the quarter, which makes one think that its stock price is pretty much a speculative lottery.

“The stock is a tool of speculation and a tool of speculators. When you’ve got nearly 30% of the shares outstanding sold short, you’ve got people who believe that Elon Musk can spin hair into gold and so there’s such great speculation,” expressed Cory Johnson.

Disclosure: none

Warren Buffett and BillionairesFree Report: Warren Buffett and 12 Billionaires Are Crazy About These 7 Stocks

Let Warren Buffett, David Einhorn, George Soros, and David Tepper WORK FOR YOU. If you want to beat the low cost index funds by an average of 6 percentage points per year look no further than Warren Buffett’s stock picks. That’s the margin Buffett’s stock picks outperformed the market since 2008. In this free report, Insider Monkey’s market beating research team identified 7 stocks Warren Buffett and 12 other billionaires are crazy about. CLICK HERE NOW for all the details.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.