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Is Tesla Stock a Good Investment?

Updated on December 7, 2017
Chuck Bluestein profile image

At age 16 I was a volunteer at a hospital bacteriology lab. I became a chemist for U.S. government. Then I studied health & related fields.

Tesla Truck

Tesla truck that can haul 80,000 pounds.
Tesla truck that can haul 80,000 pounds. | Source

Tesla Stock

Buying Tesla stock is a gamble but everything in life is a gamble, even keeping money in banks. So this is to help you decide if it is a good gamble. First Tesla stock has has gone up a lot for the last several years. Will it go up tomorrow? That does not matter at all. It went up over $9 today.

Let us look at the CEO of this. By the way do you know who is the CEO of Amazon, Netflix, Apple, Google, GM, Ford, Toyota or Facebook? Elon Musk is no Bill Gates or Mark Zuckerberg, who both dropped out of college. Musk graduated UPENN with a BSc in physics and in business (went to Wharton like Donald Trump). He is a billionaire super genius with a photographic memory. He is CEO of Tesla and SpaceX. He is also Chief Technology Officer of SpaceX. That means that his main profession is rocket scientist and NASA counts on him to do what they cannot do.

Maybe the most valuable thing to know is where the information is coming from. There are more positive and negative articles on Tesla than any other company. Some articles are very negative because they will greatly hurt other companies especially ones involved with oil, gas and other fossil fuels. Here is a good example.

This one article says that Tesla has developed the truck just to sit on it and do nothing. The writer of the article is an attorney so he is very intelligent. The name of the article is Why Tesla's Semi Will Almost Certainly Be Shelved. It has a picture of Elon Musk with the Hannibal the Cannibal mask on. So this guy hates the CEO of Tesla. It says:

The Hawthorne extravaganza was great entertainment, but the centerpiece attraction, the Tesla semi, will almost certainly be shelved because heavy duty trucking is a terrible fit for battery electric drive and building a meaningful number of Tesla semis will savage Tesla’s automotive revenue.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I did a search for this guy to find the motivation behind this article. He was not famous enough to be on Wikipedia like Elon Musk but it was easy to find. The internet said that he was the director and vice president of a company trying to make an engine for trucks that uses diesel and electricity (hybrid). That is a great idea that would save trucks a lot of money. But the Tesla truck makes that idea obsolete. Remember that Musk has a lot of genius/experts working for him.

Now here is another article. It is about the CEO of Walmart. Walmart is a huge company. Wikipedia says "Walmart is the world's largest company by revenue – approximately US $480 billion according to the Fortune Global 500 list in 2016 – as well as the largest private employer in the world with 2.3 million employees."

People who order the Tesla semi truck now will get it in 2 years. Here is a little bit of information on it now. The drag coefficient on a truck is 0.65 to 0.70. The drag coefficient of a Bugatti Chiron, that is a $2 million car, is 0.38. It can go from 0 to 60 MPH in 2.4 seconds. The drag coefficient on a Tesla truck is 0.36.

Walmart ordered 15 of these trucks. The cost of the one that goes 300 miles is $150,000 and the cost one that goes 500 miles is $180,000. They will save a driver 25 cents a mile. They can go 500 miles without a charge. It takes a truck 15 minutes to fill up on gas. Tesla trucks can get enough of a electric charge in 30 minutes to go 400 miles that is a 6 hour drive. Walmart estimates these trucks can save them $250,000 a year. The article is Why Walmart's CEO Is Excited About His Order of New Tesla Semi Trucks. It says:

Walmart has a bunch of new semi trucks from Elon Musk's Tesla on order. CEO Doug McMillon tells TheStreet why the world's largest retailer placed the order. Indeed, it's related to protecting Mother Earth.

"I am excited about that [the trucks]," McMillon told TheStreet when asked about the decision to order Tesla's headline-grabbing rides. McMillon explained the trucks will help Walmart's overall sustainability efforts. "Hopefully we can make this Tesla thing work so we can achieve that goal [sustainability]."

See this webpage, Tesla Semi, to see all the numbers on the truck directly from the company. Entry level diesel trucks star at around $100,000 and Tesla promises cost saving of upwards of $200,000 over the life of the truck, based on fuel consumption and electricity vs. diesel costs.

The new Roadster was not announced at all like the trucks were. Elon Musk said that purpose of the new Roadster was to make fun of gasoline cars. It can go from 0 to 60 in 1.9 seconds making it the fastest production car. That is only the basic model. It can go from 0 to 100 in 4.2 seconds. It's top speed is over 250 miles per hour. So I feel that Tesla stock is worth buying. Note that if the model 3s had come out at the rate predicted, then the price of a share would be much more. So is it a problem for you buying the stock at a lot less?

Bloomberg has a great reputation. Their article is called Tesla Keeps Scaring the Other Automakers.

Musk, in a very Steve Jobs-like, “Oh, and one more thing” moment, introduced the Tesla Roadster. The $200,000, all-wheel drive supercar goes 0-60 mph in a mind-blowing 1.9 seconds, making it the fastest production car ever. Oh, and it tops out at more than 250 mph.

In other words, LaFerrari owners pay an extra $1.2 million dollars for the opportunity to be beaten by the new Roadster.

The speed crown matters to automakers.

The latest on the model 3s is they estimate there are 500,000 orders of people who have put down a deposit of $1,000. They are getting an average of 1,800 new orders a day. That comes to 54,000 a month.

More orders of Tesla trucks are coming in. JB Hunt ordered some trucks and some people say 40 trucks. We do know that president and CEO of JB Hunt, John Robert, said "We believe electric trucks will be most beneficial on local and dray [beer barrels or heavy loads] routes, and we look forward to utilizing this new, sustainable technology,"

Canadian grocery chain Loblaws has pre-ordered 25 of the electric trucks. US grocery chain, Meijer, also pre-ordered 4 trucks. See Tech Republic for more on this. Anheuser-Busch Orders 40 Tesla Semi Trucks according to December 7th, 2017 Wall Street Journal article.

Here is negative information on the trucks from an article. This said that the more a truck weighs, the less weight it can carry. This said that the trucks are so powerful they must have a lot of batteries that weigh a lot. They did not mention diesel fuel that weighs a lot. I guess they forgot about that. Tesla trucks run on electricity and that is weightless. People like this are just giving reasons why they should not buy Tesla stock.

You may have heard that many car companies are making electric cars. The UK is the 6th largest car market and they want all electric cars by 2040 like France, Norway and India. See CNN's article These Countries Want to Ban Gasoline Cars. Now Tesla is making electric trucks. Other companies will make electric trucks. When they do Tesla will make electric jet airplanes. See Wikipedia's Musk Electric Jet. It says:

The Musk Electric Jet is a jet-powered supersonic electric aircraft concept by technology business magnate and serial entrepreneur Elon Musk.

Specific design concepts for a vertical-takeoff-and-landing supersonic electric jet were first made public by Musk in 2014.

Elon Musk unveils new Tesla Semi electric truck. 1 minute video. Note that you can stand and walk around in truck.

Tesla Semi truck and Roadster event in 9 minutes. Elon Musk unveiled Tesla's new Semi truck and (in a surprise) a second-generation Roadster.

Trucker on the Tesla Semi Trucks in 13 minutes.

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