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It was big news for some this morning that the Tesla share price (NASDAQ:TSLA) opened lower for the second day in a row. Personally, I find it bigger news that it is now almost 2:30 p.m. on the U.S. eastern seaboard and TSLA has already climbed back to 229.63, nearly to yesterday’s close of 229.70, although, at the moment it is experiencing a modest tapering. Tesla is the kind of stock that can drive day-traders nuts. But, as I have said so many times before, it is, and it should continue to be, the delight of long-term investors.
Telsa is at once both a pioneering technology company and a disruptive car manufacturer, which makes it somewhat of an oddity, if not almost completely unpredictable from an investment standpoint, at least on a day-to-day basis. It wasn’t all that long ago that the success of the company was as speculative in the long run as it was from day to day. But Elon Musk has taken his company through every obstacle so far on the never-ending quest for superior success.
If you are looking for short term EPS or gain in share price, there are probably stocks that are better suited for you than Tesla. But, based on the progress the company has been making on a consistent basis, and in spite of those who have said it couldn’t be done, I am increasingly more confident that the fortunes of TSLA are going to continue to grow.
It’s not easy to make an electric car
If it were easy, others would have already done it. Aside from the obvious opposition from automakers and suppliers of gasoline, there are a ton of logistical problems, like the old question, “How long of an extension cord do you need?”
Tesla has answered that by building an infrastructure of charging stations in countries where its cars are bring sold. They will continue to add these stations until they are not only strategically located, but convenient.
Being conveniently located is not the only issue. Getting a full charge may take 30 minutes or longer, not time that the average driver really wants to waste. We are also accustomed to the convenience of a quick stop for petrol. But all is not lost. Tesla is now in the process of adding a battery swapping service, whereby a robotic device will exchange your present battery for a fully-charged one in a matter of minutes. And there you have it – another obstacle overcome.
There’s a bigger market than you think
In August, Tesla struck a deal with China Unicom (NYSE:CHU) to install charging stations at 400 of Unicom’s stores in 120 cities in China and superchargers in 20 of those cities. In case you haven’t noticed, Tesla is not just any electric car. It is a luxury car. You might even call it an elite luxury car. Where better to sell such a vehicle than where the greatest number of millionaires live?
There is the key to Tesla: a lot of obstacles, but a vision, a plan and the determination that make those obstacles meaningless.
Either you believe or you don’t. If you don’t, you won’t make the commitment you need as an investor. Better to look somewhere else. If, on the other hand, you want to watch dreams come true and make money while you do, Tesla is the investment for you.
By the way, TSLA is now at 225.12, still down from yesterday;s close, but up 5.5 points from the start of the day. Tesla has traded over 200.00 since 21 May, and the vast majority of the time since 18 February. Its 52-week low was 116.10, reached in November 2013. The stock is trading seven times higher than at this date in 2012.
