) is on a roll. After shaking off the controversy of the
New York Times
review of its Model S sedan earlier in the year, the electric
vehicle maker reported its first ever profitable quarter on May 8,
sending shares soaring ever since.
The stock is up 72% in May and 174% year-to-date, with Tesla's
market cap now larger than the market caps of
(OTCMKTS:PEUGY). Earlier today, Morgan Stanley analyst Adam Jonas
even raised his price target on Tesla to $103 from $47.
The Tesla Model S
"What Tesla has accomplished isn't luck, it's real. Many funds
approach an investment opportunity by first asking: Does the
company do something better or cheaper than anybody else? Tesla is
beginning to convince the market it may do both. Competency in
technology is migrating to engineering, manufacturing and
marketing. Detroit, Munich, Wolfsburg, and Toyota City must feel a
sense of astonishment… with a hint of anxiety," wrote Jonas in his
Such is the surging momentum of the Elon Musk-led company that auto
dealers in North Carolina are trying to ban the sales of Tesla in
the Tar Heel State.
The North Carolina Automobile Dealers Association is backing a bill
that has been unanimously approved by the state Senate's Commerce
Committee that would make it illegal for carmakers to skip
dealerships and sell vehicles directly to customers.
Given that Tesla is the sole US auto company that has a direct
sales business model, it's obvious that this legislative proposal
is targeted at the Silicon Valley-based company.
"They're trying to insulate the dealer franchise model from any
competition," said Diarmuid O'Connell, Tesla's vice president for
corporate and business development, according to the
News & Observer
"It's a protectionist move to lock down the market so we have to go
through the middleman - the dealer - to sell our cars."
How popular is the Tesla? In North Carolina alone, 80 Tesla
vehicles have been sold, with the bulk of sales coming from online
purchases, and 60 more orders are pending. Countrywide, the Model S
comparable luxury cars like the
(ETR:BMW) 7 Series, the Mercedes S-Class, and the
) A8 in the last quarter.
Robert Glaser, president of the North Carolina Automobile Dealers
Association, told the
News & Observer
that his association would have no qualms with Tesla so long as the
company would start selling cars through licensed dealerships. His
argument is that the local community, of which North Carolina's
licensed dealers form an important part, could be hurt if Tesla's
precedent of direct sales caused dealership job losses.
"You tell me they're gonna support the Little Leagues and the
YMCA?" Glaser asked, referring to Tesla.
The bill, sponsored by Republican Senator Tom Apodaca, now awaits
passage in both the Senate and the House.