Electric-car manufacturer Tesla (TSLA) is no froufrou green-energy startup that bases its business on THC-clouded dreams. The company reported its first-ever quarterly profit this year, and has fully paid back Uncle Sam’s low-interest loans meant to encourage alternative fuel technology.
Why? Well, it’s partially because of the MPG factor and do-gooders looking for alternatives to fossil fuels. But it’s also because the cars from Tesla have sex appeal with sleek, luxurious designs that get and rave reviews — including the highest-ever rating for an automobile by Consumer Reports. Reservations have been red-hot, and the company issued more stock to raise capital so it could boost production capacity to keep supply meeting demand.
When you have a product that is good for the planet, connects with consumers and makes a modest profit in the process, it’s obvious you’re on to something. And investors who were on to Tesla stock early have been richly rewarded; TSLA went public at $17 a share in 2010, and now trades for $120.
There’s more: Tesla’s success has come despite intransigent auto dealers who feel threatened — dare I say “disrupted” — by TSLA and its aims to sell directly to consumers. And Tesla’s Model S continues to appeal to higher-income customers with a starting sticker price of around $60,000, leaving the potential for a mid-range model down the road.
Investors who think Tesla is just a fad better think again. This car company is going places.