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Sustainable transport: Tesla investment stock surges to record value



The investment value of electric car manufacturers Tesla Motors has hit record highs this week, with sustainability investors predicting a bright future for low-carbon transport.

Tesla’s shares topped $200 (£120.11) for most of Thursday, posting an intraday record of $202.72 (£121.74) before closing at $199.63 (£119.88). It was the second day in a row that the company broken its own record.

This represents a significant turnaround for America’s youngest publicly traded automaker, after just a year ago Tesla shares closed at $38.45 (£23.09).

Telsa currently only produces one vehicle – the Model S sedan – with a starting price of about $70,000 (£42,036). It does have plans to deliver more affordable models, however. The stock rise has followed reports of strong fourth-quarter sales and well-received plans for expansion into China.

Tesla CEO and billionaire entrepreneur Elon Musk has said that the Model S will begin selling in China in March.

“With its strong visionary leadership, Tesla has demonstrated to the world that electric vehicles are a technologically and environmentally better choice for consumers”, observed Hyewon Kong, a senior analyst at leading sustainable investor WHEB.

Though WHEB does not invest in Tesla, its flagship WHEB Sustainability fund does hold stocks in a number of companies leading the way in sustainable transport.

Kong said that one company WHEB does invest in – the material technology group Umicore, which provides key components for electric vehicle (EV) batteries – is also seeing growth in this area.

She told Blue & Green Tomorrow that she believed the success of Tesla and others was further evidence of “a trend of electrification of transport”.

She added, “For the first time, every single one of the major auto manufacturers displayed at least one hybrid or electric model at the recent auto shows and there are new electric models arriving almost every month.” 

Last week, IHS Automotive said that worldwide production of EVs is set to increase by 67% in 2014. In January, electric car sales in France grew by 77%, and some EV models are now outselling conventional cars in Norway.

In the UK, sales of hybrids and EVs rose at an above average rate last year and deputy prime minister Nick Clegg recently unveiled £9.3m worth of funding for electric vehicle charging infrastructure.

Tesla is scheduled to release fourth-quarter financial results on Wednesday. Analysts have forecast that the company will post a profit, excluding some costs, of 18 cents (11p) a share, according to Bloomberg.

Kong added that while there were positive future trends for Tesla, its valuation was “very rich”. She added, “There is also still high execution risk related to the transition from a boutique automaker to a volume carmaker.”

Further reading:

Hybrids and electrics among World Green Car finalists

Ecotricity launches 1,000 miles discount tariff for electric car drivers

Norway experiences electric car boom in sustainable transport revolution

Nick Clegg: electric cars ‘most promising’ of British green industries

UK hybrid and electric car registrations up 17.5% in a year