Posts tagged " Tesla "

Tesla’s Reality Check

June 5th, 2019 Posted by On Our Mind 4 comments

In an article about how far fewer people are buying Tesla cars and the subsequent decline of Tesla stock, the reporter quoted Tesla founder Elon Musk reassuring Wall Street analysts, “The inhibitor is affordability. It’s got nothing to do with desire.”   Musk was explaining that all is okay because countless customers still desire Tesla cars, they just can’t afford them. 

Well, that clear things up.

However, I’d like to add a few things to the wish list that I too desire, yet can’t afford. My husband and I would very much like to have homes in Jerusalem and a number of other Israeli cities. We’d also appreciate houses in a number of other places around the world including British Columbia. While we’re at it, if affordability is just a pesky side issue, let’s make some of these waterfront houses. 

That is just for a start. Desire can be an endless master.  The beauty of a price-based economy is that it helps people know what they can afford and helps keep them within their budgets.  One of the reasons that the private sector runs more effectively than government is that it only provides things that people can afford as well as desire. Our skyrocketing national debt, as well as cities and states whose budgets don’t balance, is a result of offering citizens and employees things they want (in exchange for votes) without worrying about whether they are affordable. Mr. Musk’s company received this kind of hand-out from the Obama administration. It’s time for him to re-enter the world the rest of us inhabit.


Tesla and the Temple

November 27th, 2017 Posted by Thought Tools 17 comments

Though I am not an expert on stock prices, least of all on the price of Tesla stock, I am going to make a prediction.  And with the passage of time, I’ll either pull out this Thought Tool and wave it proudly to remind you of what I wrote, or else I’ll eventually bury it and hope nobody remembers it.  Meanwhile, I’ll provide some information so you can make up your own mind.

What makes me write about Tesla stock is not only that at the start of 2017 it was about $200 a share and by mid-year it was nearly $400 (though it has now sunk back to about $300).  I am interested in it for a more fundamental reason. You see, even at $200 it made no sense to me.  Tesla’s market capitalization, the value the market places upon the company, $60 billion, is now about the same as General Motors or even a bit more. However, last year Tesla sold about 75,000 cars while General Motors sold about ten million!  Although Tesla took in about $7 billion in sales revenue, overall it lost over $600 million.  Meanwhile, good old GM took in over $150 billion in sales on which it made a profit of nearly $10 billion.  Yet, the price of General Motors stock has fluctuated between $35 and $45 this year.  Doesn’t something seem off?


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