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Elon Musk Shoots for the Moon... Hits Mars?

Tesla Investors Won't Let Go

Written by Keith Kohl
Posted August 17, 2016

If you've ever had to commute through a city, you know how ridiculous it can get.

In Baltimore, it's the same few problems everywhere: winding streets full of people who don't know how to change lanes, and road work every other block.

But some days, it's not entirely miserable... some days it's worth the hassle, because I end up driving home next to one of the biggest, brightest signs of the future.

As I navigate downtown traffic every afternoon, there’s always the same shiny, black Tesla Model S that takes the same route out of the city as me. You see, I know it’s not just a novelty; it’s a sign of what’s ahead.

How can I not? Tesla is slated to start rolling out its more affordable Model 3 next year. Soon, I’m going to see a lot more Teslas on my drive home.

And no matter what the naysayers throw at Tesla, what it has accomplished is amazing.

Musk Shoots for the Moon...

Is there any doubt about Elon Musk's lofty ambitions? It feels like he shoots for the moon with every interview, shareholder letter, and tweet we see.

And in case you might’ve missed some of his biggest aspirations, here are a few items on his bucket list that he’s rattled off lately:

Fully integrated solar and energy storage systems

Annual EV production and delivery of one million units by 2020

Fleets of all-electric trucks, buses, and self-driving cars

Hyperloop transportation pods

And of course... the colonization of Mars

Believe me, they get crazier as the list goes on.

But here’s the best part...

It doesn't matter if he fails.

At this point, even if Musk achieves a fraction of what he's promising, it will still have a huge influence on our world.

Think about it...

The Model S came out roughly on time, but the Model X was notoriously late. It was supposed to be out in 2013 but didn't hit the streets until two years after that.

The Model 3 is headed down the same road. Originally, it was supposed to be ready to drive in 2014.

Instead, the earliest buyers won't see their cars until 2017.

The handful of eager people here in my office have to wait even longer, too. Since the Model 3 rollout will run from the West Coast to the East Coast, it’s not likely they’ll see their cars until some time in 2018.

And yet I haven’t heard a single complaint. All of them still tout the fact that putting down their $1,000 deposit has made them a part of history.

If Tesla's stock is any way to judge, most of its investors are thinking the same thing.

Shares have all but recovered from the sell-off that took place in mid-February. Keep in mind that this is in spite of the fact that the company has delivered more than half of the units it expected to this year.

Hitting its delivery target of 80,000 cars this year will boost the market’s confidence that Tesla will be able to make good on its promise to ship 500,000 cars per year by 2018.

It's shooting for the moon and still hitting stars... or as Musk himself says, “In order to have a good outcome, we must strive for a great outcome.”

Remember, the 80,000 delivery goal this year was a significant increase compared to the original estimate of 50,000 cars.

Think about it: what other company has been able to ramp up production that fast, get so many EVs out on the market at once, and produce this kind of hype in the media?

I wonder if Tesla would generate the same buzz if Musk kept his projections realistic, reined in some of his loftier ambitions, and then decimated those estimates? As it is now, even the letdowns are impressive!

Look, it would be one thing if he was making these claims and had nothing to show for it.

Well, I’ve already witnessed the cars on the road, and the grand opening of Gigafactory 1 will ensure those cars keep rolling of the line.

Buyer Beware

Here’s the dirty little secret that I’m keeping from Elon: I’m not buying Tesla.

It’s not because I don’t think he’ll be able to meet his goals.

It’s because there are much better gains coming out of the sector that is the single-greatest catalyst for Musk’s success. Yes, I’m referring to Tesla’s critical need for just one commodity: lithium.

By 2018, Tesla by itself will be using more than the entire world's lithium production.

Tesla won’t be alone in the market, either. Competition will become fierce as companies rush over each other to build new fleets of EVs and provide large-scale energy storage for the masses.

Goldman Sachs expects lithium demand to reach 570,000 tons by 2025, compared to just about 36,000 produced in 2014.

We’re not even out of the early stages yet, but I’d suggest you check this out before that window of opportunity vanishes.

Until next time,

Keith Kohl Signature

Keith Kohl

follow basic@KeithKohl1 on Twitter

A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page.

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