I've mentioned the thinking of electricity pros a couple times: "Batteries: The Venture Capitalist's Holy Grail", "Bill Gates is Still Investing in Battery Companies, this Time It's Aquion Energy" and here's a sharp commenter at AnandTech:
...So far most of Tesla's corporate profits are from licensing their battery technology and from selling LEV credits to other companies, not from the cars. There are huge reasons to invest in Tesla that have nothing to do with the cars (even when you ignore the fact that there are huge amounts of government money in Tesla which can sweeten the pot a LOT for investors). Viewed properly, Tesla is not an auto company. Tesla is a battery company that just happens to produce a few cars as tech showpieces. The vast majority of their income comes from licensing their battery tech to other companies for use in hybrids or other projects aside from battery electric vehicles....In addition, I can't recommend the guy (David J.C. Mackay) in "Here is THE Problem Facing Alternative Energy" highly enough.
From Barron's:
Recharge Now!
Tesla's electric car offers a quiet, powerful ride. But unless it comes up with a cheaper, stronger battery, the stock could turn out to be a lemon.
Google "Iron Man, Tony Stark" and within the first few results you'll find Websites likening that superhero to Elon Musk, 41, the entrepreneur behind PayPal, the rocket maker SpaceX, and the electric-car sensation Tesla Motors. The comparison's apt. Musk is smart and stylish, and he fights planetary threats like global warming by creating spacecraft and zero-emissions cars that shame NASA and the auto giants. He's as rich as Iron Man's armored billionaire, too. Tesla shares rocketed this year from $35 to $115 -- lifting the Palo Alto auto start-up to a market value of $14 billion at May's end -- before easing back to a recent $102, where Musk's quarter-interest in the company is still worth $3.4 billion.
It's possible to admire Musk's achievements, while still wondering if Tesla's stock market fans are viewing its prospects through 3D glasses. The towering expectations now priced into the stock don't account for the Grand Canyon leap that Tesla must make to reach its goal of cutting its car's $90,000-plus sticker price in half. Electric-car batteries cost a heck of a lot, and today's Tesla Model S owes its better-than-200-mile range to batteries costing tens of thousands of dollars. Industries and governments around the world have spent billions on battery research, but few expect to trim electric-car battery costs by more than 20%-30% by the planned 2016 launch of Tesla's car for the Everyman. Perhaps Musk will confound the industry again, but if Tesla's next-generation car can't go the distance at half the price, its stock will head much lower.
One ingredient that fueled Tesla's (ticker: TSLA) tripling this year was an epic squeeze of those comic-book villains who had doubted Musk and sold more than a third of free-trading Tesla shares short. That fuel seems spent, for the moment. Traders say that the recently unborrowable shares are available again and can be had for a single-digit interest rate, instead of last month's 90% vig. With the shorts in retreat, Tesla should trade more in line with its fundamentals.
TESLA'S MODEL S SEDAN has won every car award in sight, and test drives by several Barron's staffers convinced us the Model S deserves the accolades. It has attracted 10,000 buyers in less than a year, and Musk told shareholders at last Tuesday's annual meeting that North American sales for the electric luxury car look as if they'll be 15,000 units this year.
But it will take time to discover how much sustained demand there is for a marvel priced above $90,000 (the price for a Model S Performance version, after a $7,500 federal tax credit). No one yet knows what portion of Tesla's initial buyers were "early adopters," unrepresentative of ongoing demand. Tesla irked analysts last month when it stopped disclosing its end-of-quarter order backlog -- which might have shed light on the issue -- after previously trumpeting a 15,000-unit reservation list....MUCH MORE
