Tesla Smashes Earnings And Revenue Expectations(businessinsider.com) |
Tesla Smashes Earnings And Revenue Expectations(businessinsider.com) |
High-Level Summary:
There was a ton of short-selling interest on TSLA (due to expectations of a big earnings miss). Almost 27% of the 115mm shares outstanding are currently being borrowed by short sellers. TSLA has more short interest by percentage than 98% of US stocks. Everyone was really expecting the price to go down.
Tesla reported earnings today at $.12/share, and upped their forward guidance. The consensus earnings estimates were $.04/share, so TSLA greatly surpassed expectations.
To short a stock, you have to borrow a share from someone else, and then return that stock to them at a later date. Returning the stock is called 'Covering a short'. All those people who were betting against TSLA are now forced to pile back into the market to cover, but since so many shares were short to begin with, the number of people who have stock to sell is much lower than typical.
This results in a 'short covering rally' where there is a lot of demand to buy shares and a small supply. Econ. 101 takes over and you see a big spike in the price.
EDIT: My mistake, this was said much longer ago (September 2012). I just read it recently. Thanks to batbomb for pointing this out. My apologies.
“It’s doing pretty well actually given that we’re such a huge short position. In fact I think the short position may be as high as one can actually go. They literally hit the ceiling on the short position. The shorts are in it to the hills. I think it is very unwise to be shorting Tesla, it’s very unwise. There is a tsunami of hurt coming for the short."
http://www.siliconbeat.com/2012/09/13/video-elon-musk-tells-...
Some quick math for fun's sake:
If the TechCrunch[1] article is still accurate, Musk owns 28.4% of TSLA. His paper-worth on this ownership this morning was $1.8B. If things stabilize at $70/share, his paper-worth tomorrow morning will be $2.3B.
A notional profit of $500 million in 24 hours isn't too shabby.
I had never heard of that happening to small individual investors like me, and at that time I looked into it and learned that this was typically done because there was a lot of interest in short sales for the stock and there wasn't enough borrowable stock to cover demands.
I renew the loan agreement on a monthly basis and in March 2013 I was offered an increase from 4% to 6% interest for the loan of my shares, indicating that short-sellers were very eager to get their hands on TSLA stock.
I'm curious to see if today's activities cause my June offer to drop my interest rate or if the offer just expires altogether. I would guess that at minimum I'll see a lower interest rate.
What you are describing is a short squeeze, and it's still unclear if that is indeed what we are seeing. Many shorts have been unwilling to cover, even when having to pay up to 85% lending rates for stock. A proper short squeeze would not only spike the price, it will make it explode; Volkswagen became the most valuable company in the world at a share price of 1k$ through a short squeeze (even if only for a short time).
Remember also that a short squeeze depends on long investors not taking profit. It only worked in VW because the majority of shares were held by institutions unwilling to reduce their stake and of course Porsche, who manufactured the squeeze.
For Tesla: http://www.reuters.com/finance/stocks/companyNews?symbol=TSL...
Investing around a short squeeze is out of your control, and I would argue, not worth worrying about. The price will bounce around like crazy and some people will make 30% in a day while others lose much more than that, but in the end, Tesla's price will reflect their ability to turn a profit in the future.
If you feel like the future market cap of Tesla is larger than it is today (with all the usual time-value-of-money caveats), keep your money invested and don't waste your time fretting over the mayhem on Wall St.
Read up on portfolio theory and you will see that it's incredibly difficult (some say impossible) to beat the risk adjusted return of the market (at least not on purpose). It turns out if you are not in many stocks - 40+ (the exact number depends on who you ask), then you are taking more risk than you are being compensated for.
Usually data from there is just parsed from the variety of forms that a public company has to file with the SEC, all/most of which are available to the public via a tool they have called EDGAR. Here's Tesla's filings: http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany...
EDIT: also, congratulations :) ask a real professional, but if you're tempted to sell be aware your holding period and of the tax difference between long and short term capital gains. Also, if you want to sell tomorrow and re-buy, be aware of wash sale rules.
Shares Short (as of Apr 15, 2013): 30.70M
Shares Outstanding: 114.52M
EDIT - I guess this is more relevant:
Short % of Float (as of Apr 15, 2013)3: 49.20%
EDIT #2: Congrats on the gains today! :-)
This is true in general obviously, but investing specifically is filled with explanations like this that make sense only in hindsight.
So in other words if you read big news the minute it comes out about a company, automated systems and institutional traders have already made their moves based on the news before retail investors have a chance.
Some of them are really not gamblers but man, there are so many many of them willing to play with other people's money.
As long as they have zero-risk (zero responsibility, that is), they will gamble on.
Seeing short squeezes in TSLA and GMCR aftermarket.
In the case of TSLA the stock, as of Apr 15, almost 31 million shares were lent out to short sellers ("sold short"). That is out of 72 million shares on the market ("float"). At an average volume of 3 million shares traded per day (trailing 3 month average) it would take more that 10 trading days of nothing but short sellers buying shares on the open market to return to the people they borrowed them from ("cover").
Short trading unhedged is regarded as dangerous for this reason. If you buy a stock in the traditional way, if it goes to zero you only lose your investment. If you sell a share short, your losses (amount you have to re-buy it for minus the price you sold it for) is unbounded. Typically, this isn't collateralized by cash, but in money that brokers loan to traders ("margin"). If a broker sees that I have a really, really big loss on a short position, they might make me repay that money ("issue a margin call")... and depending on the situation, that might force a trader to cover their short position.
Anyway, point is that this can lead to a bunch of short sellers driving up the price of a heavily short stock all at once because they've either decided to cut their losses or because of margin calls, called a "short squeeze". This usually isn't sustainable because it's a temporary supply/demand imbalance. Could be an tough day for a lot of people investing against Tesla tomorrow, but I wouldn't bet on the gains in TSLA the stock tomorrow/in after-hours trading lasting for a long time.
Electric vehicles will displace combustion vehicles. Everything that makes a car, the electric car does better.
Right now the electric vehicle market is small, but soon (one decade?) it will eclipse the combustion market. Tesla is ahead of ALL other vehicle manufacturers, and that lead will translate into significant market share. As the electric vehicle market grows, so will Tesla's value.
The only rich people (who own cars) not getting Teslas seem to be either totally non-car people (or just cheap on capital costs vs. cost-efficient on total costs), or those who live in the City without a garage parking spot. Solving the Tesla street parking charging issue would be the next big win -- you could probably get away with 480v supercharging at work for 2-6h/day and street parking at home, although weekends might be tough.
Personally I'd be a little more concerned about the $20Bn per year paid in farm subsidies, to an industry with median household incomes 17% higher than the national average, if I were a US citizen. At least the money going into Tesla is buying the US a lead in the future of automotive technology, instead of going towards further impoverishing third world farmers.
Also why would this 'gift' be drastically reduced? I thought ZEV quotas were rising.
The important point is that these credits were created out of thin air, and don't cost the taxpayers anything. And their goal is to do exactly what they are doing... to get a certain amount of ZEVs vehicles out there, and to give manufacturers a financial reason to sell more, since they don't want to be buying those credits from Tesla.
I agree with the few here that have stated that tesla is in a SV bubble right now. It's the just hip thing to do, similar to the prius situation 8 or so years ago, but with much less volume due to the price point.
Also, won't the fact that ammonia is almost stupefyingly toxic be a problem?
Congrats to Tesla for turning their first profit!
Trading outside these regular hours is not a new phenomenon but previously was limited to high net-worth investors and institutional investors like mutual funds.[2] The emergence of private trading systems, known as electronic communication networks or ECNs, has allowed individual investors to participate in after-hours trading.
In other words, nothing unfair about it.
Schwab supports after hours trading from their accounts.
I suppose this isn't factoring in the countless enormous government subsidies. I don't really count this as "profitable".
But if you use the actual definition of profitable, meaning they had more revenue than expenses in this quarter, then they were profitable.
I live a bit outside Philadelphia (but visit the city proper often), and haven't seen a Tesla here yet.
My wife: No, I don't know about them.
Me: Let me show you one (in two seconds) here is one. Look how beautiful is that!
To find a Tesla in Silicon Valley you just need to turn your head up!
1) General New England frugality.
2a) New England winters eat cars due to the salt and potholes.
2b) ...which means that you must garage your supercar for 3-4 months of the year because it's just not practical to use.
2c) ...which means that you have:
2c1) ...two cars (no big deal)
2c2) ...and the ability to garage one of them full-time for 3-4 months, which is a problem anywhere in the 617 area code because...
2c2a) Boston Is Full.
Last week I drove from Sacramento to San Jose and it seemed as if the closer I got to SJ, the more Teslas I saw.
"Seems to be some stormy weather over in Shortville these days"
Edit: Flying past 27% in after hours trading.
Also, whoever downvoted me... can we keep this civil please?
That HACKER news is becoming a place where people downvote mentions of upstart disruptive competitors in an attempt to curry the favor of well funded established companies. Is just kind of, sad.
Depends on the future performance of the company. Netflix experienced one of these short squeezes in January. Look at their 6 month chart.
http://finance.yahoo.com/echarts?s=NFLX+Interactive#symbol=n...;
(There's probably some interesting commentary in there somewhere about the complexity of financial markets and how it is probably bad for society to have a vast portion of our economic growth riding on something most people don't get.)
You can 'short' a stock that you think is going to lose value (e.g. you expect a major earnings miss to be reported).
Shorting a stock means you borrow a share from (generally) your broker at todays price. You then sell that share to someone else for market price. At a determined date, you have to buy another share at market rate and give it back to your broker (this is called 'covering' your short).
If you bet right, you borrowed a share, and sold it for $N. Then, at a future date, when the price fell, you bought for $N-X, and gave the share back to your broker. You just made $X, the price difference from the value of the stock falling.
If you bet incorrectly, you borrowed a share, and sold it for $N. Then, at the future date, the price is actually higher, and you have to buy a share at $N+X, AND give the share back to your broker. You just lost $X, the price difference from the value of the stock rising.
If you bet REALLY wrong, the $+X factor can get really high - your broker may 'call' and force you to give them cash, pending your future purchase of the share to return (your 'cover').
Now, to MOST people, shares are effectively unlimited - with tens of millions or more shares on the market for most traded firms, liquidity isn't an issue. If you want a share or a few shares in a company, it's pretty easy to get them. What may or may not be happening here, is that a TON of folks are currently 'short' on Tesla's stock, meaning millions of folks are going to HAVE to buy shares of the stock to 'return to their broker' and cover their short. The problem is that Tesla DIDNT go down.
Normally, lots of folks are short on lots of stocks, and the market just moves. Occasionally, you get a confluence of events which leads to there being a high demand for a stock that a large number of shares are shorted on, which has a self-feeding pain cycle: the stock price is based mostly on demand and liquidity - as more and more folks HAVE to buy the shares to cover their shorts, the demand for the stock is going to go up, and thus the price is going to go up as well. This increase in price increases the pain, and triggers many brokers to 'call' those margins, requiring MORE people to buy the stock to cover, driving the demand up even higher. The end result is a big spike in the price of the stock, and a TON of people losing money on their bad bets.
Not really. Financial markets day-to-day operations don't really affect peoples real-lives. Every industry is full of terminology and jargon that describes the inner workings but that isn't necessary to understand for the outsider.
The average person with a retirement fund just wants to see it keep and increase in value over time. They don't particularly care if the traders of that fund were losers/beneficiaries of a short squeeze on a segment of their portfolio, as long as the overall value keeps going up.
Kind of like how the average web visitor doesn't care what OS and database a site runs as long as it is fast and bug-free.
That's when you start getting into options and derivatives, which are (theoretically) priced on a 5 variable differential equation called "Black-Scholes" (intuitively, you are just buying the right to buy or sell a stock for a particular amount at or by a certain date in the future).
You could construct a trade using those where you would make a smaller amount of money if the price fell, but your losses would be capped above a certain amount. In investing terms, you could buy out of the money calls to hedge your short position, and then your loss would be capped at (price you sold - max(price you have to re-buy at, price you can call your options at plus the option premium). I'll stop there before I get too far out of my league :)
Most people don't get electricity or internal combustion engines or computers or whatever, so that is kind of a scary standard.
And price, and convenience.
> more convenient
No it's not. The lower range, low number of charging stations, and long charging times make it quite inconvenient for long trips.
I bought a used car 3 years ago for less than the cost Tesla charges for replacing the batteries on its car (which you are estimated to need to do after about 8 years). This car is a station wagon, so has much more storage space than a Tesla. I go camping every year, about 550 miles from where I live. I can make that trip in about 10 hours including food and gas stops. For the same trip, I would need to make at least two hour long charging stops at Supercharger stations along the way (if I had the highest-end battery option). But there are no Supercharger stations along my route; so I would need to find places to charge with ordinary power sources. If I used ordinary 10 kW 240 V sources, it would charge at a rate of about 30 miles of range per hour, effectively tripling the length of the trip; now what was a long 10 hour drive has turned into a 30 hour trip, which means finding places to stop and sleep overnight (which hopefully can give you a charge).
Furthermore, I live in an apartment, without a dedicated parking space. I need to park on street. So there's nowhere I could charge my car at home; I can't exactly run a power cord down and across the sidewalk to my car. Neither is there anywhere to charge my car at work. There's no way I could even use a Tesla for commuting right now, let alone longer trips.
With a gasoline powered car, I just fill up at any gas station, my car holds the gasoline overnight so it doesn't matter where I park, and for the above describe trip, I need to stop for gas once before leaving and once on the trip, each a 5 minute stop.
The Tesla Model S is an amazing car. But claiming that it's more convenient, or is a better car in every way but range, is a vast overstatement. It would be absolutely awful for me, and many other people with similar needs.
Some of these problems are solvable; there will be more Superchargers installed, the price will probably come down, there will probably be more electric vehicle infrastructure. But it's still a gamble to say that they will completely eliminate all of these advantages that a gas powered car has over an electric car, at least unless the price of gas spikes dramatically.
Obviously convenience is different for different people. The OP is probably someone who finds car maintenance very inconvenient and as the owner of a used station wagon I am guessing you are not. If you don't take frequent road trips and have the ability to charge at home, the Model S is indeed very convenient--never have to worry about fuel and hardly ever have to worry about maintenance.
Seriously, it's "safer, faster, roomier, more fun to drive, more convenient, etc," than "any other car on the market?" Really?
Some of that is true. But there's also a lot of opinion there and a few total inventions. The Model S is the safest car on the market? My Mercedes stops itself if I don't see traffic in front of me hit its brakes. It gives me night vision. It will nudge me back into my lane if I drift. There's about 100 more cool safety features I can talk about, and all this in a car that costs less than the 80kwh Model S. And there's even more safety tech on the S Class which is just another 10-15k on the top Model S price tag. And of course BMW and other manufacturers have similar.
I have a friend who turned that off after his car unexpectedly braked hard in traffic because a piece of paper blew across his lane.
Not to say it isn't a good feature. But it isn't perfect.
It is not the safest, it is not the fastest, it is not the roomiest, it is not the most fun to drive, it does not have the biggest storage, I am sure some evs match its noise levels, it isn't the most convenient, it isn't the least polluting (I am sure the manufacturing process is more polluting than many cars even when considering the entire lifetime of the vehicle).
If you mean that it is the best overall, then that is very subjective and there are plenty of other candidates.
>Tesla is ahead of ALL other vehicle manufacturers...
If you mean with regards to electric cars specifically then perhaps, but with cars like the SLS Electric Drive[1] in production, I am not sure this is accurate either. If you mean in general, then that is ridiculous.
I love electric vehicles and I am looking forward to when they, hopefully, replace ICE vehicles but your comment is ridiculous. It is better to be realistic about the state of the technology.
I also suspect the majority of them will be sold to teenagers with fairly under-powered vehicles ;)
(Well, Tesla towing capacity is kind of crap I think, and it would be a poor choice if you street parked, drove to a far away location without superchargers enroute, etc.)
Another thing about high cost of living in places like that is maybe you're willing to spend 10% as much on a car as on a house. In Palo Alto that means you can buy two new loaded Teslas to go with your 2BR/1BA cottage; in the midwest, one used Toyota to go with a 4BR/3BA house on 5 acres.
(and Elon Musk's counterargument to all of this is that he's working on a 30-50k car next. I'm sure he'll deliver. The segment they're neglecting is the truck/commercial market -- there probably is an opportunity for someone (Textron? they make the new EV UPS/Fedex trucks) to make an awesome commercial EV platform, maybe with a CNG or LNG generator onboard. Whoever replaces with pickup truck and light commercial truck will have a next-Ford sized business, too)
http://www.npr.org/2012/04/02/149703488/oil-scare-turns-fede... is interesting
So, I would expect that, on average, on the order of 1:10,000 cars on the road would be a Tesla.
If people say way more of them in California, there must be spots where people see fewer.
[1]http://www.motortrend.com/cars/2013/audi/s5/pricing/ (~$60k) [2]http://www.teslamotors.com/models/options (~$80k) [3]http://buyersguide.caranddriver.com/mercedes-benz/e-class/20... (~$100k)
Me, I'd clean out my garage if I had a Bentley.
If you wanted de-risk your position, you could set up an option straddle or just sell your shares before the announcement and then buy them again next week.
I'm not denying the Model S is a great package. It clearly is. It scores high on a number of features. But like in any complex market with lots of variables -- there are other choices. Even to go through GP's list: safer (Not sure what it has that is safer particularly?), faster (Not compared to M5, etc), roomier (My Navara carries more equipment, there are bigger sedans, tarrago, etc), more fun to drive (compared to a 911? Ferrari? ft86? LF-A? Lotus Elise?), has more storage (My Navara + Canopy wins here. Also Station Wagons etc), quieter (Nissan Leaf probably wins), more convenient (TO do what? Camping? Road Trip? Park overnight?), and less polluting (Nissan Leaf probably takes the cake here. Also - my Electricity comes from Brown Coal. It's about as polluting as Petrol/Diesel).
It's a bit like claiming the iPhone is better than every other phone in every way (except battery life). It's clearly not true. The Model S and the iPhone are great products - but "better in every single regard" is just pure nerd-bait.
He's not saying that these cars are better than the tesla at all things, but only in the things they make it a point to be beter at. Which should be immediately obvious if the OP wasn't resulting to hyperbole and a rather thin attempt at covering his bias towards this company.
Tesla S is a great car, worthy of car of the year, great for many kinds of uses, and I really want one. But let's keep it real.
Being an underinformed naysayer isn't any worse than being an underinformed cheerleader. The only difference is that the naysayers appear to have been wrong in this case for this earnings period. I wouldn't be surprised if many were over influenced by skepticism about a company run by a large personality. It is easy to err in the other direction, too.
Solyndra sold a highly fungible commodity in a saturated market. Tesla is selling a machine that, when any skeptic sees it in a showroom, starts to impress in a way that is visceral. My conservative, rural father got in one at a showroom I took him to. He was blown away by the build quality. He knows cars, he knows metal, and he knows engineering. He told me that, mechanically, it is the best built car he has ever seen. He is a car guy, and used to drag me to car shows constantly as a kid.
His only objection was that he couldn't use one where he lives because of the two miles of dirt road he has to traverse to get to his home. I told him they were coming out with an SUV. He now owns stock.
Regardless of solicited or not, I do agree with your advice and if nothing else, hopefully readers who fear to ask such questions gain from friendly advice such as yours
EDIT: grammar
Also, with actively managed strategies, it only takes one or two bad bets to wipe out years of gains, and due to natural biases, individual investors tend to under-report/weight losses and over-report/weight the gains. As such, we always tend to hear how other investors are making a killing on a certain stock or trade, but we rarely hear from the losers, which distorts our perceptions of risk and returns (so far, I have seen a handful of people talk about their Tesla stock holdings on this thread, but I have yet to see a single person talk about haw bad they are getting cleaned out because they shorted the stock).
Back when I lived in NY and worked in bond markets, an interesting study came out evaluating active mutual fund managers. A chance distribution was able to account for all but 2 at a 95% confidence level. Those two exceptions were named Peter Lynch and Warren Buffett.
Peter Lynch unfortunately retired from active investing, and his advice is that people should invest in indexed mutual funds. He also is not unexplainable by chance - the chance of someone having done that well by chance was under 5%, but it was still possible.
At a 99% confidence level, only Warren Buffett was left.
Warren Buffett is unquestionably knowledgeable. But his returns have been boosted over the long term by a couple of major investing advantages. The first is that he likes to buy whole companies, and is reportedly a stellar manager. His management expertise then turns into improved returns for that company, which becomes a good investment. Thus the cause/effect relationship is not clear. The second advantage is that when a company has problems (eg Goldman Sachs in 2008) they tend to call Warren, because they know that if they get him on board then they will restore confidence. But the deal that he gets is significantly better than what anyone else can get from that company.
The study did not include hedge funds like the one George Soros ran because their complex trading strategies can't readily be compared.
Anyways, the professionals can't run funds which beat chance returns. Why do you think will be able to?
(Technical detail. It is possible to beat the averages, and my understanding is that the professionals do on average tend to do so. The problem is that their cost of beating the average is sufficiently high that their funds don't come out ahead. And the results of their research get reflected in the stock price, which is available for everyone to look at.)
Edit: here's an article referring to the change http://www.lexology.com/library/detail.aspx?g=f8c96f0e-832c-...
I believe OP was wrong with regards to a restriction on when information can be released relative to earnings. Elon could have tweeted it a few days ago and it wouldn't have made a difference to the SEC in regards to the timing of the release.
Another issue is making sure that material information is disclosed properly. Elon was essentially hinting that they were going to have a really good quarter. That kind of information is material and would likely need to be disclosed properly to all investors at once. However, I believe disclosing that information has nothing to do with the timing of earnings release. A company can disclose any information it would like at anytime, so long as it does so properly.
If I'm wrong, please let me know in reply. I'm very curious about whether I am making a mistake.
I suspect that if more people in NYC had garages in their owns we'd be seeing more Teslas.
I'd include Long Island (which do have traditional homes and garages) in this as well where I've never seen one on the road.
I think there are issues that exist beyond what you mentioned.
Moreover, many cars are mostly used for weekend road trips, when range is a paramount concern.
Check out Smith Electric:
0.284 * $7.5 billion = $2.13 billion
His gain, assuming a 20% jump, is about $300 million.
At market close TSLA's market cap was $6.39 billion.
It's not a 24 hours profit. He didn't buy that stock yesterday, nor could he have without making the price go a lot higher than 70$. You can't judge his profit on the short term.
It's clear he doesn't have an extra $500mm in a checking account.
http://finance.yahoo.com/q/op?s=TSLA+Options
...the implication is that unhedged longs are carrying the real risk.
I can somewhat relate to why one would take this strategy, as Tesla is getting a lot of hype, implying that the stock might break out (or already did, currently at $71), but they are also in a fairly precarious financial situation, with a ton of debt. Elon himself warned that if the company didn't get to positive cash flow it was likely they would go under. Still it seems like a high price to pay for a hedge, wouldn't it be simpler (and possibly cheaper) just to reduce your long position?
Instead, you started it by taking a crap on Tesla which is 1) Not in the spirit of "HACKER news" that you just evoked in your defense and 2) a dumb thing to do if you care about down-votes when we all know there's a lot of Tesla fans here.
I suppose maybe you don't truly care about down-votes, which would make me wonder then why you're complaining about them.
I downvoted you exactly for this reason: you seem to be under the delusion that Arcimoto is (or will be) a Tesla competitor.
And in so far as they are aiming at different market segments, the two companies aren't direct competitors.
If you're looking for an in town runabout that's all electric and that you can eel in and out of the parking lot at Whole Foods on your way home from work... you probably don't want a Tesla.
Tesla's are for people who want to signal their wealth and power, for whom the transportation is a secondary consideration. They're cool, better than a Boxster; but they aren't exactly practical. They're for movie stars and banksters not people who build things.
Here's the thing though, I could see fabbing up a custom skin for an Arcimoto as weekend(s) project. Whereas with a Tesla, you'd feel like a jerk for touching Elon Musk's Work Of ART™ and that means the Arcimoto wins on hackability.
Consumer Reports is not known for their affinity for status and bling so much as their affinity for boring practicality, and they rated the Model S a 99/100. I believe that ties it for their highest rated car ever.
Of course, it's probably because I mentioned status... which is the third rail of Bay Area niceness; I mean it's an absolute meritocracy; right?
A straddle involves buying both a call and a put. If a stock is trading at 10, and you buy a PUT at 8 and a call at 12, you make money if the stock goes above 12 or below 8, between that, you eat the option price. Basically a straddle is betting on volatility.
You can also sell a straddle, sell a put and sell a call, and bet that stock will remain at the same price.
What likely happens is the company releases the material information through proper channels and then company representatives use that information as talking points during an interview. Some new information could be given during the interview but it's likely to be minor stuff like specifics on features for a product.
I have spoken with a few of my non-tech friends about Tesla and they're all pretty bearish on it so maybe you're right. What do non-tech people on the West Coast thing about it?
Brokers do charge interest rates and the rates for TESLA really were 45% (current) and 85% (once upon a time) annualized, mostly because of a deficiency in available shares. At that point it was costing 60c per share a week just to keep your short position.
Theres plenty of discussion here: http://www.teslamotorsclub.com/showthread.php/15183-Cost-to-...
I was thinking of this: http://www.investopedia.com/terms/s/shortinterest.asp
You can see the short interest in TSLA here published twice a month: http://www.nasdaq.com/symbol/tsla/short-interest which is very high compared to AAPL's short interest: http://www.nasdaq.com/symbol/aapl/short-interest which hovers around one day to cover.
But anyhow, I'm not claiming that there are no convenience advantages of a Tesla; just that there are also a lot of things that are quite inconvenient, especially if you don't have a driveway or need to take long trips. Claiming that the Tesla is better in every regard but range is vast hyperbole. For some use cases, it may be more convenient; for mine, far less.
Beyond that, the price is a major disadvantage; at 4 times the price of a new economy car for the entry level model, and twice the price of lower-end luxury brands, it's well outside many people's price range; and you don't even save that much because you're not buying gasoline, as the combined cost of electricity plus replacement batteries winds up being pretty close to the cost of gas you would pay for the same number of miles (depending on exactly how long the batteries last, and assuming that the relative costs of gasoline vs. electricity don't diverge too much; of course you could say that gas prices are likely to go up faster than electricity, but they may go down too).
Doesn't the maintenance bit kind of remain to be seen? It seems to me there are two factors working against each other there: the high failure rates in new product categories, and the low failure rates associated with a simpler engine. I don't know that you can say which will win out yet.
- No engine.
- No fuel system.
- No alternator, starter, or belts.
- No oil.
- Single speed transmission! No shifting,
no transmission fluid.
- No fuel system.
- Lower brake wear, thanks to regen braking.