Will award return investors to Tesla?

The company's Model S sedan is the first non-gasoline powered vehicle to be named Motor Trend's car of the year.

By Kim Peterson Nov 13, 2012 3:30PM
Tesla Motors (TSLA) has had a rough year. Its stock price is as wobbly as a bad axle. Mitt Romney called it a loser. Executives were forced to cut the full-year revenue forecast on a slow rollout of its electric Model S sedan.

But Motor Trend just gave the company a much-needed shot in the arm Tuesday by naming the Model S its 2013 car of the year. It's a pretty huge award in the industry. The Model S beat out 10 other finalists, including the Porsche 911 and Boxster, the BMW 3 Series and Ford's (F) C-Max Hybrid and Fusion.
Investors began taking another look at Tesla Tuesday, sending shares up 2% to $31.71. The stock has had a bumpy year, falling to $23 in January and soaring to $38 in the spring.

The award marks the first time Motor Trend has given its top honor to a non-gasoline powered car. "It drives like a sports car, eager and agile and instantly responsive," Motor Trend said in its writeup of the award. "But it's also as smoothly effortless as a Rolls-Royce, can carry almost as much stuff as a Chevy Equinox, and is more efficient than a Toyota Prius."

Motor Trend said the sedan is "proof positive" that America can still make great things. Tesla makes the Model S at its plant in Fremont, Calif.Credit: Bill Pugliano/Getty Images
Caption: The Tesla Model S Signature is shown during a media preview day at the 2012 North American International Auto Show

In an interview with CNBC, Tesla CEO Elon Musk described the award as a turning point in history. "The 'Car of the Year' award has a great deal of credibility in the industry and with consumers, and that additional validation, I think, is probably what a lot of people were looking for to buy the car."

The Model S costs roughly between $50,000 and $98,000, and can be upgraded with luxuries such as a glass panoramic roof, heated leather seats and turn-by-turn navigation.

Tesla isn't building the Model S as quickly as it had expected, which is the main reason why the company cut its full-year revenue forecast to between $400 million and $440 million, down from the previous $560 million to $600 million.

It only expected to deliver as many as 225 Model S customers in the third quarter, but deliveries should increase to between 2,500 and 3,000 in the fourth quarter.

Tesla has received criticism this year, most notably when Romney said that President Obama gave $90 billion in tax breaks to green energy companies.

"You put $90 billion -- like 50 years' worth of breaks -- into solar and wind, to Solyndra and Fisker and Tesla and Ener1," Romney said in the Oct. 3 presidential debate. "I mean, I had a friend who said, you don't just pick the winners and losers; you pick the losers."

Musk, who describes himself as an independent voter, said on CNBC that he's tired of getting pummeled politically. But he said that Democrats have been right about environmental issues.

"At some point we'll run out of oil," he said. "So we know that's going to happen. What we don't know is what the effect of putting all of that (carbon dioxide) in the atmosphere is going to be. But since we're going to run out of it anyway, why don't we transition to a sustainable mode of transport and energy generation sooner rather than later and not run that experiment?"

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Tags: FTSLA
22Comments
Nov 14, 2012 11:26AM
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The tesla burns coal if the juice comes from a coal plant. The tesla produces nuclear waste if the juice comes from nuclear. The tesla burns natural gas if the juice comes from a natural gas plant. Why doesn't Musk tell that part? Tell the rest of the story. Solar water heaters on every home would do way more than his over priced toy for the rich. And I have a solar water heater. Got it installed 21 years ago. Cost me $1500. Has paid for itself many times over. Something every one could buy.
Nov 13, 2012 7:37PM
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Well all I can add is that of the five cares I've ever owned the only one I would not care to own was the only one that was a Motor Trend car of the year.  My five cars pan a time of about 40 years I'm not a person to get rid of a car while it still serves it purpose and remains reliable. 
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The gasless car market is President Obama's baby.   I wonder if the award was "helped" along by his administration?
Nov 13, 2012 7:10PM
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I'm investing in Tesla. Good mission, good management, innovative products. I believe it'll be up-up-up from here.
Nov 13, 2012 6:51PM
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My only beef with this stuff is how the government subsidizes the development. If it's successful, the investors walk away rich. If it bombs, the taxpayers pick up the tab. That's not capitalism.
Nov 13, 2012 6:32PM
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Hey Romney can you say loser?  Watch what you say it will bite you in the a--  right back Ha Ha
Nov 13, 2012 6:09PM
Nov 13, 2012 6:03PM
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can you say bankrupt in 6 mos , oh maybe a bailout obama givem 5 billion hell tellem they dont even have to payback like gov motors     totally out of reach for avg joe
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Welcome to the future, if you don't want the future, go ahead pay $4-5/gallon.
Nov 13, 2012 5:41PM
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It better be a good car for 50 to 100 grand.

 

Even if the precious minerals to make the batteries are mined in China and disposal of one creates its own toxic waste site.

 

I say keep building them!  Although most will not be able to afford one...

Nov 13, 2012 5:20PM
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Tesla has been around for awhile.  How many millions have already been wasted?  Battery powered vehicles create more pollution in the production process than a gas burner does over it's entire life for a fraction of the cost.  Just remember, Motor Trend also awarded the Car of the Year to the Chrysler 300 a few years back.  When I worked for Toyota, the manufacturer willing to buy the most magazines was awarded the Car of the Year.  So I guess Tesla ponied up this year and bought alot of Motor Trend Magazines.  No news here.  Good bye.
Nov 13, 2012 5:07PM
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Keep up the good work. Forget all the naysayers..... I enjoy watching people with a big mouth and no brain eat crow!
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