Tesla Motors shares face drain from pricey batteries -Barron's

June 9 Sun Jun 9, 2013 3:58pm EDT

June 9 (Reuters) - Shares of Tesla Motors Inc, which makes electric cars that are widely praised for performance, could fall more than 50 percent unless the company can get stronger, cheaper batteries that will allow it to cut the $90,000-plus vehicle sticker price in half, Barron's said.

The company's current Model S is too expensive to attract the hundreds of thousands of buyers each year needed to support the stock price, Barron's said in its June 10 edition. The battery for the model, which will run about 230 miles on a charge, costs tens of thousands of dollars.

Barron's said a more affordable model Gen III that is expected in three years will have a less expensive battery, but a driving range that is too short to generate the sales that are priced into the stock.

Its shares traded at $102.04 on Friday and have ranged from $25.52 in August to $114.90 last month. They could be worth as little as $50, according to Barron's.

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Comments (16)
Check today’s news, Google: “German scientists create lithium-ion EV batteries that last over 25 years”. Their claim also includes a vastly improved capacity around 3 times higher.

This would mean, if it becomes feasible in real manufacturing, the Tesla Model S (or similar) could get a significantly higher return of investment in terms of the total economics. Solar panels last an equivalent time, so you could theoretically go solar for some US$10,000 more and for the next 25 years forget about cost of charging or fuel cost. Just a perhaps little thing is that with an EV car over 25 years, assuming you go to a gas station perhaps 70 times per year (like I do), you save 18 days of your life at the pump, 4 days waiting for oil change and some days dealing with transmission problems and other mechanical issues. EV cars should indeed be much more reliable without the complex mechanics.

This is perhaps some years out. Battery innovation isn’t at the end of the road.

Jun 09, 2013 4:52pm EDT  --  Report as abuse
Dudster wrote:
I will agree, finding a less expensice battery for the vehicles from Tesla will be a problem. May be time to share with another company for a less expensive battery.

Jun 09, 2013 4:53pm EDT  --  Report as abuse
So, Barron’s is now an expert in the automotive field? Yeah, I think I’ll continue giving more credibility to Elon Musk’s opinion instead. The man has a contract with NASA to deliver cargo to the International Space Station.

Jun 09, 2013 5:16pm EDT  --  Report as abuse
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