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USA: What Tesla Motors Needs in 2012

Shares of Tesla Motors (Nasdaq: TSLA ) didn’t do too badly in 2011. The upstart electric-automaker’s stock was up about 5.3% for the year through Tuesday. That’s a solid result in a year when giant rivals from Ford (NYSE: F ) to Toyota (NYSE: TM ) were down sharply, though it trails the Dow Jones Industrial Average’s 6.2% gain over the period.

Still, for a company that has yet to show a profit and is months away from bringing its bread-and-butter product to market, that’s a fine result, a testament to rising revenues as the company continues to execute well on its plan.

But if 2011 was Tesla’s year of anticipation, 2012 is shaping up to be the company’s make-or-break moment. How will it go?

Coming soon: the moment of truth
Early signs suggest that it could go quite well indeed, though some potential wrinkles have recently appeared. Tesla confirmed last week that it is on track to deliver the first of its Model S sedans on schedule in “mid-2012” (a phrase that allows for a bit of fudging, but at least Tesla has been using it consistently all along), another sign that the company is on plan. The widely anticipated Model S has long been seen as Tesla’s first mass-market car, though the first units will be anything but: Although a $49,900 price tag ($57,400 minus a $7,500 federal tax credit) has long been promoted for the Model S, that price applies to a base-level model that won’t be built in the initial production run.

Instead, the first 1,000 cars produced will all be “Signature” models, with prices ranging from $87,900-$97,900 after that tax credit, a good bit higher than many (including many potential customers, I suspect) had anticipated. Tesla now says that the lower-priced models will arrive in “Fall 2012,” when that $49,900 will buy you a Model S with a 40 kWh battery pack, giving an estimated range of 160 miles at 55 mph.


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