Alpine Capital Management Tesla's realistic potential for double-digit growth

Top Quote Alpine Capital Management addresses clients on Tesla Motors realistic ten-fold growth potential. End Quote
  • (1888PressRelease) March 16, 2015 - As long standing advocates of Tesla Motors (NYSE: TSLA), Alpine Capital Management's Charles Leung presented investors with an outlook that was referred to as 'realistic ten-fold growth potential' with a price point set at $280, essentially $100 higher than Thursday's closing price.

    "We tend to steer clear of investment within the motor industry, simply because of the resources required to maintain and constantly upgrade the property, plant and equipment section of a balance sheet. However with Tesla Motors we see a business model that is significantly differentiated from the traditional operational methods of other motor firms", commented Mr. Leung, Alpine Capital Management's Chief Investment Officer.

    "What we see here with Tesla Motors is that although primarily the firm operates as a motor firm it is a research intensive operation that focuses on improvement through technology. An example of this is clearly demonstrated as 60% of the firm's employees are involved in software engineering compared to 2% of the same typically found in a traditional motor firm. This is one key area where we believe that Tesla Motors will capitalize upon during the coming years."

    However bullish Alpine Capital Management appeared to be on the future of Tesla Motors, a flip side to positivity was presented as Mr. Leung continued with a warning of the risks involve in Tesla's aggressive expansion plan.

    "As a growth stage operation we must be aware of the continuing costs required to carry out the business plan efficiently. This year alone Tesla plans to commit $1.5 billion to capital expenditures. Compare that figure to the Ford Motor Group whose 2015 CapEx is estimated at around $6 billion, and we can see on a revenue basis, of which Ford is around 40 times greater, that Tesla is perhaps punching above its weight in this department".

    Balancing the opportunities available for Tesla with the financial commitment required to make serious inroads into an industry destined for change doesn't leave the ambitious motor firm with much margin for error. However for long-term investors the next 12 to 18 months will give more of an indication into how successfully the firm has been able to execute its plan.

  • FB Icon Twitter Icon In-Icon
Contact Information