Tesla Motors has long enjoyed a lofty position in the stock market, but tumbling gas prices – and a resulting tumble in Tesla Motors stock value – have some experts wondering whether the company’s all-electric car portfolio will stay relevant for much longer.
Rubbish; absolutely it will.
Our friends at Auto News have adopted the very same belief, stating that while the 13 percent decline in Tesla Motors stock after Thanksgiving this year could be cause for panic, speculation regarding any broad, lasting effect on Tesla’s outlook is overblown. And that remains true regardless of whether fuel prices continue their diminishing trend.
Auto News spoke to Morningstar Inc. Auto Analyst David Whiston, who cited the high cost of Tesla Motors’ wares as the chief piece of evidence against any lasting stock depreciation: “People who are buying Tesla today don’t really care if gas is cheap or expensive. They want it because it’s a status symbol or for the performance or they are very eco-conscious and just don’t want to consume fossil fuels, regardless of what they pay for the fossil fuels.” And, we would add, for the novelty, and low long-term running costs.
But Auto News does concede that the release of the less-expensive Tesla Model 3 could pose problems, as a majority of consumers may deem the (still sizable) cost too high to justify the switch from cheap gas, to cheaper electricity. But the future price of gasoline – and thus, that car’s marketability – remains to be seen.
For now, the market seems to have verified the opinions of Auto News and ourselves; stock in Tesla Motors is on the rise again, although it has a ways to go before reaching its overvalued 2014 peak of $291.42. Not bad for a manufacturer with only two cars under its belt.