This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Tesla Motors Pollutes Today for a Greener Tomorrow

Stocks in this article: TSLA

Even if you choose to ignore the intermittency issue, the virtue of green electrons resides in their creation rather than their use. Once green electrons exist it doesn't matter whether they power a Tesla or a toaster. One will be cleaner and the other dirtier.

I've read the reviews of the Tesla Model S and have no doubt that it's a fine automobile. It is not, however, a clean automobile and pretending otherwise is deceptive. Adding renewables to the analysis merely adds another level of pollution to the power grid, a shared resource that is every bit as critical to life in an industrialized society as clean air and water.

I've read several reports over the past two days about the 2,900 new Model S reservations Tesla booked in Q3. The thing they all overlooked, however, is the number of cancellations. Tesla had 11,500 reservations at the end of Q2. It booked 2,900 new reservations in Q3 and delivered 250 cars. It ended the quarter with 13,200 reservations. That number is only possible if 950 existing reservations were canceled during the quarter. A one-in-three cancellation rate in the middle of a high-profile product launch is not an encouraging sign.

I'm willing to give Tesla the benefit of the doubt when it comes to reaching its production goal of 5,000 cars per quarter. But if you start with a reservation base of 13,000, deplete it by 5,000 deliveries per quarter and then replenish it by 1,750 reservations per quarter, the mathematical progression for 2013 will be as follows:

Q1 -- 9,750 reservations

Q2 -- 6,500 reservations

Q3 -- 3,250 reservations

Q4 -- zero reservations

The art of investing is all about balancing upside potential against downside risk; weighing the possible against the likely. Tesla may be a fun stock for traders as the hype cycle runs its course, but with gaping holes in the environmental claims, yawning chasms in the economic claims and serious questions about the commitment of reservation holders, I don't see a reasonable balance between risk and reward.

John Petersen, a lawyer and CPA, has specialized in advising companies on corporate finance and business development for more than 30 years. He writes the deathless prose and dire warnings investors read in offering documents and SEC reports. While Petersen has served as a board member or executive officer for a handful of public companies, the bulk of his work is behind the scenes where precision and a passion for detail are essential.

Petersen's investing style is that of "elephant hunter," and nothing grabs his attention like a "multi-bagger" in the rough. His investing time horizon is two to four years. On the long side, Petersen looks for blood in the streets and stock prices that have been beaten down to unconscionably low levels. On the short side, he seeks out high-profile companies that trade at unsustainable levels while hype-intoxicated executives make the same tactical mistakes he's suffered through with clients. Petersen's sector focus is batteries and efficient transportation because he has almost a decade of experience in the industry, including a three-year stint as board chairman of an R&D-stage battery-technology developer. He's convinced these sectors are emerging investment mega-trends.

2 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,959.44 +154.64 0.87%
S&P 500 2,078.54 +7.89 0.38%
NASDAQ 4,781.4240 +16.0440 0.34%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs