Monday, May 20, 2013

The Stock Market Falls In Love With Tesla & Solar City: What Does It Mean?

When it comes to solar and electric vehicle stocks, bears and shorts have been right. Until the last 6 months. And until especially Tesla and Solar City.  Both stocks have skyrocketed by 100% to 300% and brought recently a lot of pain to short sellers.

Though the recent explosion in the stock prices of Tesla and Solar City have not ended bearish views about their future (see below), the run up in their stock prices reflects the correct view that the first companies that master solar installation or building an electric car with range will make fortunes.

The US solar industry will install 4,000 megawatts or more this year.  That market already alone is worth more than $12 billion per year that is wide open for a company or several that could be the equivalent of Home Depot for solar installation--national in scope, large in volume, and low in price.

As for electric cars, the sky is the limit for the first company able to produce a successful mass market electric vehicle.  Tesla is selling now into a luxury niche, and that alone may be enough to insure a long corporate life.  See Rolls Royce, Ferrari, and other great, luxury brand names of the automotive world.

But the real prize in electric vehicles is to be first to market with a mass market electric vehicle.  Will Tesla be able to drive down its cost and drive up even further its already attractive range?  Some stock buyers believe Elon Musk is the man to get that job done.

Indeed, Musk is powering Tesla and SolarCity stock prices, as many investors are betting on him!

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