“…a sporty four door family car…”
Farther along in the plan, Musk tells the reader about the next car in the Tesla lineup. At the time, the Roadster cost $89,000 and Musk said the sedan would cost “roughly half” of that amount. At $52,400 (after federal tax rebate) the Model S is more expensive than Musk predicted in nominal dollars but since it has been nearly seven years, we should look at this on an inflation adjusted basis. According to the Bureau of Labor Statistics, $89,000 in 2006 is the equivalent of $102,493.92 in 2013. Using this number, Musk is actually fairly close in his price estimate for the Model S.
Reviews of the Model S have also been overwhelmingly positive with nearly all critics being impressed by the car’s performance. Along the lines of sportiness in the car, Tesla checks the box. Tesla Motors Inc (NASDAQ:TSLA) also met the goal of a family car by not only providing the standard five seats of the typical sports sedan but also offering two rear facing small child seats. It’s a rather unconventional feature designed to broader the Model S’s appeal and confront the fact Tesla has not began production of its SUV, the Model X. But as far as sports sedans go, the two rear facing seats are just an added bonus and it will be interesting to see what percentage of Model S buyers opt for the feature.
To the Model S and beyond!
Musk makes it clear in the post that Tesla Motors Inc (NASDAQ:TSLA)’s goal is to one day produce electric cars for everyone who can afford a car now. The automaker had no intention then of stopping at the Model S and has no intention now. Musk has already confirmed his hopes to launch a Gen III car in the $30,000 range in the next three to four years. If this car is anything like the Model S, it should be formidable competition for the high selling BMW 3 Series in the popular $30k sport sedan segment.
Tesla keeps on rolling
Tesla has been a fine example of a great product continuing to propel a company beyond its constant stream of naysayers. While the automaker is not an investment for the faint of heart, there does appear to be light at the end of the tunnel. In the last earnings call, Musk hinted at possible non-GAAP profitability in Q1 2013 and expected profitability in future quarters. Analysts are still in disagreement over Tesla’s financial outcome for 2013 but many are forecasting profits to grow in 2014. For once Tesla Motors Inc (NASDAQ:TSLA) could stand on its own two feet and at last provide its own financing. With a high short interest, many investors are still doubting Tesla’s ability to succeed where so many other automakers have failed. But with the automaker’s goals continuing to be fulfilled, largely as planned, I believe shorting Tesla is a high risk option and if the company’s history is an indicator of the future, a very costly one as well.
The article Tesla’s Progress on Its Secret Master Plan originally appeared on Fool.com and is written by Alexander MacLennan.
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