Tesla Motors’ share prices have taken a bit of a thrashing over the last few weeks; indeed, the company’s stock seems curiously tied to the cost of gasoline. And while that drop in share value might have many pondering whether the electric automaker might soon be in trouble, we say that’s rubbish.
The folks at Car and Driver agree. Here’s why:
Tesla Motors is a luxury brand, whose sales have very little to do with the price of crude. With prices starting at around $70,000 and rocketing well beyond $100,000 in a right hurry for the manufacturer’s single production model, Tesla Motors doesn’t make the sort of accessible, everyday EV that might serve the masses as a feasible alternative to the gas-powered car. They make an expensive fashion accessory/costly plaything, for a moneyed audience who really couldn’t care less how much it costs for a gallon of gas.
Further, by almost all accounts, Tesla Motors’ share prices were overinflated to begin with; they hit an all-time high of $291.42 in 2014. That sort of overblown value – which Car and Driver notes is more tied to perceptions of what the automaker will do in the future than to its present performance – is bound to be volatile, and in need of adjustment.
Add to that the adoration and hype surrounding the brand, and the fortitude of its renegade leader – bad boy CEO Elon Musk – and it becomes apparent that Tesla Motors has plenty enough steam to sustain its forward momentum for the foreseeable future, despite what the market might indicate.