I read some interesting web pages on Tesla and the electric vehicle industry: here, here, and here. Based on the critical article and related links of Tesla from Stanphyl Capital, it would seem like Tesla is a very risky investment in the short-term. However, I think that the downsides of Tesla currently such as signs of financial trouble, and poor quality control, can be overcome. Additionally, it seems like Tesla has a strong commitment to customer technical support. So any quality issues in the short-term should be ironed out. Nevertheless, it would be more economical overall to have a better design and planning, followed by strict quality control pre-sale, rather than servicing after sale. Still, it is important to have due diligence when considering an investment, and a solid understanding of as many fundamentals as possible is critical. Given Stanphyl Capital‘s indepth article, it is worth careful consideration, as well as other information.
Tesla has been through numerous and frequent dire straits, and is still operating. If it can hold out financially until the Model 3 is released and sold, then it should be a good investment, since electric vehicles have good long-term potential, and should ultimately displace internal combustion engine (ITE) vehicles. However, because of the short-term risk, it may be a good idea to diversify and invest in other companies that are developing mass-market EVs, such as GM with it’s Chevrolet Bolt. The Bolt is targeted at a different market due to a different, smaller size, being 5000 USD cheaper at 30000 USD after the 7500 USD Federal Tax Credit. The different market gives a good reason for diversification. Tesla have not hinted at releasing a smaller car, and if it ever does, it will be well after the Model 3 is released in late 2017 (as flagged as the release by Musk, who has flagged release dates for earlier models which have been delayed), probably after Tesla is free cash flow positive.
However, as Dalal outlines, there are advantages to Tesla, such as the equivalent level of safety costing less than competitors, Over-The-Air (OTA) software updates, and a sleek dashboard. Importantly, people are motivated not only by economics, but by the desire to do good, such as with helping the environment with a technology that can be part of a sustainable development transition, when coupled with renewable energy. Tesla’s existing charging infrastructure puts it ahead of competitors.
Additionally, it is more sustainable from an environmental perspective to use an electric motorbike, or even a ICE motorbike with carbon offsets, vis-à-vis ICE cars. ICE motorbikes would certainly be more economical, especially with a used bike, in the short- and long-term. Finally, with the social aspect of sustainability, yes bikes can be more dangerous, and that’s why it is important to have good safety gear, and ride very carefully. If there are less cars on the road with more motorbikes, or autonomous vehicles requiring less cars on the road, then motorbikes would also be safer. Nevertheless, my understanding is that the most common motorbike accident involves only the motorbike. As an aside, it would be harder to make an autonomous motorbike, and may not be worth it, since a rider would find it difficult to do anything other than balance, which requires hands on the handlebars.
Disclosure: I have no investment position in TSLA. I am considering going long.