Tesla Motors: America’s Fourth Automaker?

April 2, 2011

Is the new kid on the block, Tesla Motors, poised to join the Big Three automakers as a major player in the car manufacturer industry in North America? Morgan Stanley thinks so. In fact, a new report by Morgan Stanley describes the Silicon Valley start-up as potentially “America’s fourth automaker.” The result: Tesla’s stock shot up 20-percent to over $28 a share on Friday.

In their report, Morgan Stanley went on to say that rising gas prices and the promise of government support for alternative fuel vehicles could be the building blocks to push the electric vehicle manufacturer to global success.

A Revolutionary Car Design

Tesla Motors was founded in 2003 by a group of Silicon Valley engineers whose vision was to develop affordable electric vehicles. Today the company is based in Palo Alto, CA; it has 800 employees and 17 stores worldwide that market the Tesla Roadster and the luxury Model S sedan. Neither one will ever be a hybrid vehicle. Tesla’s mission is to design and manufacture only electric drivetrain vehicles.

The Roadster is a high-end, 2-door sports car. It can accelerate from 0 to 60 in less than four seconds and has a range of 245 miles on a single charge. The base price is $109,000. There are 1500 Roadsters in 30 countries around the world. Tesla recently announced that these Roadsters have now covered 10 million real-world miles and have collectively saved half a million gallons of fuel and over 5.3 million pounds of carbon dioxide emissions.

The Model S will not be mass produced and available to the public for another year. Tesla says this full-size sedan will seat 7, accelerate from 0 to 60 in less than six seconds, and have a base price of $57,400. The Model S will have a range of 160 miles with optional battery packs that can extend that range to 300 miles. Four thousand Tesla enthusiasts have plunked down $5,000 each to reserve a Model S for delivery once Tesla begins full production next year.

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