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IPO Or Not, Tesla Won't Survive As Independent, Analysts Say Page 2

 
4,915 views Jun 30, 2010
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Elon Musk, CEO of Tesla Motors

Elon Musk, CEO of Tesla Motors

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"How do you take that to Tokyo?"

The problem is that so far, no one outside the company understands the extent and terms of the Toyota-Tesla partnership.

The most cynical explanation is that Toyota invested $50 million in Tesla,  gets back $42 million for its Fremont, California, assembly plant, and rids itself of ugly political fallout from closing the last car plant in a state where it sells huge numbers of cars.

And how Tesla's self-assured and volatile CEO Elon Musk will interact with Toyota's grey-suited executives remains to be seen. Musk's behavior is well-known but, as Hazimeh asks, "How do you take that to Tokyo?"

The Tesla saga will undoubtedly produce many twists and turns in future. But it's hard to find a single auto analyst who believes Tesla has any hope of growing as an independent automaker; the capital needs, economies of scale, and low margins of the global industry pose hurdles the company is too small and too under-capitalized to overcome.

Meanwhile, in late-day trading, the stock stayed at roughly the previous day's price after having risen above $30 a share.

[AP via Detroit News]






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Comments (6)

  1. By Burt Posted: 7/1/2010 10:50am PDT

    Let's see....the analysts think it can't survive....I'd say buy some Tesla stock and wait 10 years....and prove them wrong.
     
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  2. By Ed Posted: 7/1/2010 7:14pm PDT

    I'm all for green technology and energy efficient cars, but Elon Musk is a pompous ass who needs to be brought down a couple of levels. Just because of him, I pray for Tesla's demise.
     
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  3. By  power tools Posted: 7/5/2010 11:59pm PDT

    I've been seeing a lot of stories lately about "why Tesla will fail". Why all the Tesla hate? We need more forward thinking companies like Tesla, and more competition in the EV market to get the technology going in the right direction. There will always be haters. Hell when planes were invented there were alot of people saying, "this will never work". Same with desktop computers.
     
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  4. By John Walker Posted: 7/12/2010 4:27pm PDT

    Elon is a gay and his product is lame. Tesla will fail like most VC investments do. Sand Hill Road is built on corruption and lies!
     
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  5. By  Day Trader Posted: 8/9/2010 4:51pm PDT

    Why do we even want TSLA to fail? Yes, they have been doing well and its probably a bit of an overnight success but let's wait and see first before we criticize the market.
     
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  6. By  GustoGuy Posted: 11/24/2010 10:38am PST

    Like it or not Tesla is the only manufacturer of a long range electric vehicle. The Nissan Leaf will have a range of about 90 miles and should satisfy all but about 10% of the populations needs for a car with significant range. What Tesla lacks is an economy of scale and expertise at taking an all new design and mass marketing it. I would not be surprised to see Elon Musk trying to develop a partnership with an existing Auto manufacture such as Toyota or Daimler so it can achieve the economy of scale production capabilities that it so dearly needs to survive. I have to admit they took the concept of an electric vehicle and made it sexy and powerful when most other manufactures made it look like an econobox or a glorified golf cart. Hopefully they will be allowed to retain some independance in such a partnership.
     
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