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Can Tesla's $5 Billion Bet Pay Off?

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Charles Murray
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Re: Not viable
Charles Murray   5/7/2014 6:35:03 PM
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One more thing, naperlou. You raise a good point about our current auto industry. Vertical integration, as it's called, has gone completely out of vogue. Notice all the suppliers -- two that come to mind are Delphi and Visteon -- who are no longer part of the big automotive companies. There's a reason the automakers have abandoned that corporate strategy.

Charles Murray
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Re: Not viable
Charles Murray   5/7/2014 6:31:49 PM
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I know what you mean, naperlou. To paraphrase bonjengr's statement above, Musk must have nerves of steel. There's a pile of factors that are right on the edge of reality here -- the massive investment and the complete reliance on unproven sales numbers being prime among them. Whether it works out or not, though, I think this will make an incredible ongoing business story over the next few years.

bobjengr
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$5 BILLION BET
bobjengr   5/7/2014 6:19:56 PM
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Mr. Must is truly a man of steel.  I would nervous as a cat over this one.  I can certainly see the need but I doubt the sales number will be there to make the project viable and provide the necessary ROI.  I would expect federal rebates will continue to be necessary to attract "rank and file" consumers no matter how many cars are sold when addressing alternative energy and improving MPG usage.   With that being said, I would love to see his company locate in east Tennessee.   Excellent post Charles.  

naperlou
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Not viable
naperlou   5/7/2014 3:08:54 PM
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Cap'n, I don't think this whole effort is viable.  The key is that the current battery makers are running at such low capacity.  Is the cost really driven by logistics?  If this were the way to go, then why don't auto manufacturers still operate the way Ford did originally.  In that case the raw materials were brought in and the steel, glass and rubber were made on-site.  Does anyone really believe that will happen again? 

Rob Spiegel
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Re: Any bets on location
Rob Spiegel   5/7/2014 11:37:45 AM
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I'm glad New Mexico is on the list. Our state needs the jobs. I'd place my bet on Texas, though. They're very agressive in attracting business. Lately, they've been stealing existing business from California.

Charles Murray
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Re: Any bets on location
Charles Murray   5/7/2014 10:52:22 AM
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Last I heard, Rob, Tesla had narrowed it down to four states -- Arizona, Nevada, New Mexico and Texas -- according to multiple news reports. The news reports are saying that Musk plans to move forward in two states, all the way to the point of breaking ground, "just in case there's last-minute issues."

Rob Spiegel
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Any bets on location
Rob Spiegel   5/7/2014 7:56:26 AM
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Nice story, Chuck. I know it's early in the process, but has there been any talk about location for this factory? 

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