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TheStreet Open House

Tesla Triumphs but Questions Remain

Stocks in this article: TSLAGM

Some would argue that those who are placing orders today are "cutting in line" against the will of those with earlier deposits. I find this unlikely. Word of this would spread like a prairie fire. People would feel cheated and become upset. I can't imagine Tesla doing this other than in carefully selected special cases for good reason.

The optimist has a different interpretation: Tesla has increased production from the recent consensus of 400 cars per week. Most people reported that the 400 per week goal was reached some time in December or January. Well, what if it simply continued to rise?

For a production increase to explain the whole multi-thousand gap in such a short time-frame though, production must have gone up almost 10-fold, not just a somewhat half-realistic doubling from 400 cars per week to 800 or whatever in the last month or so.

Bottom line on this point: There is at least some chance that this development is not a good sign for Tesla's order book. I really don't know, and the numbers appear somewhat contradictory and inconclusive. There are multiple possibilities.

2. Profitability: This is a much more straightforward point. If I recall Elon Musk's statement from last June's shareholder meeting accurately, he said Tesla's breakeven point is 8,000 cars per year. That's 2,000 cars per quarter.

Well, if this is true, Tesla would have been profitable already in the December 2012 quarter, and would be profitable every single quarter in 2013. With a total backlog -- Model S domestic, Model S international and Model X -- of approximately 25,000 cars already, Tesla should have no problem delivering 20,000 in 2013. Model X starts in 2014.

If Tesla breaks even at 8,000 cars, selling 20,000 would then make Tesla extremely profitable, no? If not, one would think someone's got some 'splaining to do.

The New York Times Dispute

My take on the well-publicized failure by the New York Times to drive the car from supercharger to supercharger in the DC-Boston corridor is this: Seeing as everyone else -- from CNN to regular consumers -- has managed to accomplish this task, the NYT journalist looks terrible with his failure.

What makes this drive so relatively difficult right now is that there are too few superchargers deployed, and they are too far from each other. If you are doing this drive now, you are facing odds that are only moderately better than Jimmy Doolittle on April 18, 1942. To accomplish the task, you have to use common sense in terms of charging the car, so that you don't fail to fill up the car to the max.

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