In the heat of the presidential campaign, Mitt Romney lumped
Tesla Motors (
in with failed Solyndra, calling them both "loser
Tesla's famous CEO - Elon Musk - never fired back at the
remark. He fervently reminded investors that Tesla was on track
to be cash flow positive. And the company never so much as
requested an extension for, much less missed, a Department of
Energy (DOE) payment.
It turns out that Musk won't need to do much additional
defending. The public will do it for him after Tesla achieved a
milestone that should silence even the toughest critics.
At a New York City event, Tesla Motors' Model S was named Car of
the Year by
The selection of the Model S marked the first time a vehicle with
a non-combustion engine won this prestigious award in its 63-year
Even more amazing than the win by Tesla's
is that it won by unanimous decision.
Musk characterized the award as a "pivotal turn in history" after
Tesla's "long and difficult journey." Though Tesla has struggled
to grow their financials, Musk regularly explained to investors
that it was a supply issue and demand for their electric powered
vehicles was healthy.
award followed Car of the Year titles from
and Yahoo! Autos earlier this month.
Though the first two nominations were positive news, the
title is more significant because of the award's esteem. Here's
what the judges had to say ...
They noted the Model S' superb acceleration and efficiency
saying, "it drives like a sports car, eager and agile … it's also
as smoothly effortless as a Rolls-Royce, and carries almost as
much stuff as a Chevy Equinox and is more efficient than a
Prius." The judges deemed, "by any measure, the Tesla Model S is
a truly remarkable automobile, perhaps the most accomplished
all-new luxury car since the original Lexus LS 400."
That's incredible praise for a car produced by a supposedly
"loser" company. With a price tag starting at $57,000 and the
ability to drive more than 265 miles on a single charge, this
electric car will be a big win for consumers. Tesla believes the
exposure gained from the award will convince buyers of the car's
In a CNBC television interview, Musk said, "the car of the year
award has a great deal of credibility in the industry and with
consumers. And that additional validation, I think, is probably
what a lot of people were looking for to buy the car." He also
thinks that the award will have a huge sales, awareness, adoption
and psychological impact because of the unanimous decision in a
Consumers aren't the only ones who should listen to Musk.
Investors may want to heed his words as well. Musk has proven to
be a successful entrepreneur and inventor. The Wharton alumnus is
widely revered in the business world for founding SpaceX and
co-founding PayPal, which eBay (
) purchased for $1.5 billion.
If he's right about the award's influence, winning it could light
a fire under already enthusiastic buyers. More importantly, Tesla
will be able to oblige this demand after recent operational
In a November letter to shareholders, Tesla mentioned that it
successfully transitioned to a mass production car company,
growing from the ability to manufacture five cars per week to 200
(10,000 per year). By next month, the company believes it will
expand production capacity to 400 cars per week.
Management believes that its production rate puts them at a level
where business will be cash flow positive. Moreover, they expect
to deliver 3,000 Model S cars in the fourth quarter and more than
20,000 next year.
It's been a difficult fourth quarter for the indices and TSLA
could be the super-charge many portfolios need.
Equities mentioned in this article: TSLA, EBAY,
Positions held in companies mentioned above: