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Tesla (NASDAQ:TSLA) Beats Chevy Volt

Brian Hicks

Written By Brian Hicks

Posted April 29, 2013

Tesla (NASDAQ:TSLA) investors have reason to get excited.

Tesla’s Model S Sedan surpassed the Chevy Volt in the sales arena in the first quarter, and it is also expected to be the first quarter in which the company reports a profit.

tesla-motor-model-sTesla reported 4,750 Model S deliveries in North America, compared to 4,421 for GM’s (NYSE:GM) Chevy Volt in the same region. Tesla’s quarterly report coincides with GM’s first quarter sales, and even though GM sales went up 8 percent from 2012, it was still not enough to beat Tesla.

Owner of Tesla, Elon Musk, played down the good news, instead praising the electric car industry in general.

He told the Los Angeles Times he would like to see more sales of electric cars, even if it meant other companies outsold his models.

However one feels about Elon Musk, it is highly apparent that he believes in his products.

On Friday, he reassured customer concerns about battery life by announcing a replacement program—even if the owner did not follow the manufacturing instructions, and as long as there was no intentional damage at play.

Furthermore, the company will also provide a loaner Model S to the consumer if the car happens to need extended repairs.

And here’s the real kicker: if the owner likes the loaner car better, then they can keep it, provided they pay the difference between the two vehicles.

The Model S has a starting price tag of around $70,000.

Bloomberg reports a Tesla sales goal of 20,000 models for 2013.

Model S

The Model S made Motor Trend’s 2013 car of the year, and it can reach up to 60 mph in just four seconds. The electric vehicle has the highest mileage elasticity on the market, going for 300 miles on a charge.

Nissan’s (OTC:NSANY) Leaf, meanwhile, can go far 75 miles per charge, and the Chevy Volt will run for 38 miles before the gasoline engine kicks in to keep powering the battery.

For a while, Tesla’s American competitor was California-based Fisker Automotive Inc., with the hybrid 2013 Fisker Karma. But Fisker is in financial peril, and the Karma is expected to be the last model.

The vehicle, which comes in two models, has a higher price tag than the Model S, at $110,000 for EcoSport and $115,000 for EcoChic, according to New Car Test Drive.

Despite criticism and naysayers, Tesla has managed to come out on top. The company received bad publicity when New York Times writer John Broder put out a hit piece regarding the Model S, stating that the car was insufficient in charge time and could not make it on longer trips, as revealed in his test drive.

But it was uncovered that Broder charged the car below recommended guidelines and intentionally pushed the Model S beyond capacity, and Musk managed salvage his reputation.

In fact, reviews for the Model S have been mostly positive.

But this did not stop other critics from trying to knock Tesla down a notch.

Earlier in April, former governor Sarah Palin called Fisker and Tesla financial losers. While Fisker is going through financial problems, Musk correctly countered Palin on Twitter that Tesla sales are going up.

John Wolkonowicz, an independent analyst of the auto industry from Boston, believes Tesla’s recent success will be short-lived, as reported by Bloomberg.

According to Wolkonowicz, companies like GM and Nissan are in better positions to spend more capital on improving technology, while Tesla’s smaller stature as a company will hinder its growth.

And Wolkonowicz chose the Chevy Volt as the favorite since it can still operate on conventional fuel.

While his views may hold some truth, this also does not count Tesla’s potential for growth.

And credit must be given to the fact that a smaller company like Tesla has already been able to beat giants like Nissan and GM.

It is also noteworthy that a fully electric car was able to surpass a hybrid vehicle. After all, many would say that hybrid vehicles are a compromise until more improvements are made in EVs.

Tesla’s sales figures could be a sign that more consumers are ready to make a full conversion to EVs.

EV Investing

Energy storage and lithium-ion battery improvements are key areas of investment within the EV sector.

Musk’s battery guarantee program may have shareholders wincing a bit, but it is more of an assurance that electric batteries are safe and long-lasting. While the Chevy Volt has gasoline to fall back on, Tesla would have had more to lose if its electric batteries were deemed substandard.

More investors and companies are exploring the energy storage industry and how it will benefit electric motors.

Advanced research into lithium-ion batteries is also becoming more competitive within the EV industry.

R&D within these departments will foster more excitement and competition in the EV field.

Keep a lookout for the Chreos electric-powered vehicle—set to make a limited debut of 300 production models close to 2015—by Maltese company Silex Power.

According to the company, the car will run on 621 miles—double that of the Model S. Silex is betting on future technology to make this happen.

The company has hinted at making non-luxury models in the future if Chreos has a successful run.

Should Musk be concerned?

We shall see what happens. 


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