August 5, 2016

Tesla Motors: A dose of realism needed for stockholders, Elon Musk, and company expectations

I’ve posted before about the importance of prudent and realistic financial planning expectations, including those related to investments.

My question today is:  When will Tesla Motors (TSLA, Nasdaq) and its stockholders do just that?

Tesla Motors recently announced its latest quarterly earnings.  No surprise to me, another loss ($2.06 per shared, WAY larger than analyst’s forecasted loss of $.95 per share);  and, once again, fewer than  Tesla electric cars produced than planned (14,402 vehicles, less than the company’s 17,000 vehicle target).

CEO Elon Musk has become the Donald Trump of the electric vehicle world, constantly “promising” unrealistic financial assumptions and vehicle production numbers that are never met.  Heck, Musk’s Tesla forecast involves producing 500,000 vehicles annually by 2018.  That’s just less than a year and a half away. 

Elon Musk:  Let's get real, shall we?

Fact check:  Tesla produced 50,000 vehicles in 2015.  Does any prudent person actually think Tesla can produce 500,000 vehicles annually in 2018, only three years later?  That’s an annual production increase of 450,000 vehicles, or 1000%!  I know of no company in the United States that has ever  … ever … ramped up production in that magnitude.

Why anyone would pay $229.19 for one share of Tesla Motors stock today is beyond me.  For goodness gracious sake, the company has never been profitable.

And heck, Musk isn’t even staying focused on the ongoing problems at Tesla Motors.  Rather, he’s off buying a solar power company, Solar City.  Why in the heck would an electric car company want to buy a solar power company?  As the New York Times surmised today, seems the only people who find value and a good company fit in this purchase are Tesla shareholders. 

Hopefully Tesla Motors, CEO Elon Musk, and Tesla shareholders will wake up and smell the coffee, before its too late.  Otherwise, history just may repeat itself.  Remember how Webvan’s unrealistic expectations and unsustainable business model led to its demise?

For information about my nationwide Consulting, Expert Witness, and Tax Services visit Fouts Financial Group.


  1. What are analyst buy recommendations for Tesla stock?

    1. Analyst ratings as reported today by had a mean recommendation of Hold. Breakdown by analyst reports: 2 strong buy, 2 moderate buy, 7 hold, 2 moderate sell, and 4 strong sell ratings.

  2. If a person owns Tesla stock, do you recommend selling it now?

    1. Good question, but that may create a situation in that I am providing direct investment advice to you, which goes beyond the scope of this blog. Please contact me at 925-979-9972 or if you would like to discuss in more detail. Thank you.

  3. What about the deposits people put down for the upcoming mid-priced Tesla cars?

    1. The $1000 deposit for the Tesla Model 3 car is called a "reservation" by Tesla. And refundable based on these conditions as summarized at

      "The Model 3 Reservation Agreement makes it clear that it is not a sales contract. It is nothing more than an opportunity to enter into a sales contract at some point in the future. It says the reservation fee, which is $1,000 in the United States, is fully refundable if the prospective purchaser decides to cancel or abandon the reservation. It also says Tesla may “decline to maintain you as a reservation holder.” You may want to refrain from saying negative things about Tesla publicly to keep that from happening. If and when Tesla decides it is time for you to enter into a validly binding sales contract, it will notify you."

      Supposedly nearly 375,000 deposits had been received by Tesla as of early May.


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